Spirited fightback

Innovation has brought spirits back from a dark period in the 1990s. Nigel Huddleston reports on a renaissance that is putting spirits well ahead of rival categories

When the triple whammy of ready-to-drinks (RTDs), premium-packaged lager and the growth of wine struck in the 1990s, the future looked bleak for spirits.

A general trend from dark to light spirits put vodka in significant growth, malt whisky shone on the back of a collectors' and connoisseurs' market, and Jack Daniel's and a host of wannabes drove imported whiskeys forward, but the overall picture was a bit grim.

Now, on the back of a booming style-bar market, the decline of RTDs and a surge in innovation that puts beer, for example, to shame, spirits have made a comeback.

Roger Harrison, head of marketing for white spirits at Pernod Ricard UK, says: 'The general trend is still away from dark spirits like blended whisky and dark rum, but even within dark spirits there are some positive trends. Golden rum is having a renaissance.'

Golden rum was ahead 3% in the UK on-trade in the year to March, with white rum down 2% and dark rum by 7%.

Vodka's rise continues unabated

Malts continue to perform well, with another 10% rise in the year to July, and vodka's rise continues unabated.

On-trade sales were up 7% in the last year, with some premium and super-premium brands beginning to make a mark. Sales of such products were ahead by 35%.

'Gin is starting to grow again as well,' says Harrison. 'Both vodka and gin tend to be female-biased and - as people are going back to spirits from RTDs - that happens to be where a lot of the growth is coming from.'

Although premium brands are talked up, the big mainstream brands continue to dominate. Smirnoff's growth outpaced that of all vodka in the on-trade, up 11% in the year to July.

In gin, Gordon's outsells the number two brand by eight to one and has 75% on-trade market share, while Bell's dominates the on-trade whisky market, though less so, with 34% market share.

Chipping away at the pub market

Martin Horner, senior trade marketing manager at Bacardi-Martini for Bombay Sapphire and Grey Goose, insists that premium brands such as those are starting to chip away at the corners of the mainstream pub market, with Sapphire sales up 25% in a year.

He says: 'We're still focused on the top end, but consumer demand has taken us out into suburbia and rural areas. People managing their estates are always looking out for the next big new brands and with Sapphire it's reaching the point where people expect to see it there.'

Horner says the opportunity for mainstream pubs partly lies in providing a range of products throughout the week that appeal to people who drink in top-end bars on Fridays and Saturdays.

'The old socio-economic rules have been broken,' he says. 'People are getting married later, having children later and you have younger people who go out at the weekend to bars and clubs and live like celebrities.

'Brands like Bombay and Grey Goose have become more accessible as a result.'

Richard Clark, head of marketing at Halewood International, the Red Square vodka firm, said the major brands could be challenged but said licensees should be prepared to see brands come and go on a more regular basis.

'People are coming into spirits much earlier. We've now got people who have been through RTDs who come in to spirits when they're 25 or 26 and, as a result, product lifecycles are be-coming shorter.

'Because the people drinking spirits are younger than they were 20 years ago, the demands of consumers have changed too. They want versatility, flexibility and they also want a lot of new product development.'

You have younger people who go out at the weekend to bars and clubs and live like celebrities