Liqueurs and shooters have it licked

According to a report by market researcher Mintel, sales of liqueurs are growing despite the fact fewer people are drinking them. Overall, volume sales increased for traditional liqueurs by 40 per cent between 2002 and 2006, which shows they are not being left at the "back of the cupboard" behind the bar.

The Mintel report shows a measured, positive outlook for liqueurs - but much of this is thanks to off-trade sales. In pubs they are a hard sell. Being tagged with the label "liqueur" is not something brands in the pub drinks market aspire to.

Nicki Daw, marketing manger for Midori melon liqueur at Fior Brands, says: "Being called a liqueur does hamstring us a bit. People have a problem with liqueurs in general. They see them as something to be drunk neat or over ice and as a result they will reject them. We do target long drinks more, and style bars are very good at explaining to consumers that liqueurs are not just digestifs and aperitifs. But pubs are not so good at this."

There are problems with route to market, acceptability among customers, old-fashioned views of the category and the fact that the biggest growth category for liqueurs to hang onto is cocktails and they are not exactly setting the pub world alight - no matter what anyone tells you.

Here are some of the challenges and issues facing liqueurs - and, over the page, a similar analysis of the shooters market.

LIQUEURSChallenges

The challenge for liqueur brand owners, according to Rupert Wilkins, chairman of Malcolm Cowen, which owns and distributes a wide range of liqueurs, is quite simply getting their product in pubs in the first place.

And he's not wrong. In the traditional liqueurs market, according to Mintel, the top three - Tia Maria, Cointreau and Drambuie - make up 59 per cent of the market by volume (in 2005). It is extremely hard for new brands to get a foothold in the market.

"Route to market is the most vital issue," argues Rupert. "We make sure we have very flexible distribution, so we go to a range of local wholesalers and work closely with them. We do work with local brewers as well, such as Arkell's, Charles Wells and St Austell. They know their estates well and know how to properly target their consumers."

But once the liqueur is in the pub surely the real challenge for licensees is to make it relevant to a pub audience. Cocktails are a good way of doing this.

Nicki Daw says much of the battle is about the right marketing. "The challenge for Midori in the UK is that we are a young brand," she says. "We are pitched at 18 to 30-year-old females and we have to make sure we stay pitched at that consumer group."

Midori recently performed a marketing trial in Scotland - somewhere the brand has an extremely strong sales performance. Fior Brands did some research before it launched an advertising campaign and when asked about Midori, people said it was an old-fashioned liqueur. The TV advertising with flair bartender Nicolas Saint-Jean showed different ways to mix and enjoy Midori. "In essence it showed consumers how to actually drink Midori," says Nicki.

"The research done after the advertising campaign showed that consumer views had completely changed - they saw it as a versatile spirit," she continues.

So happy was Fior with the campaign that it will be repeating it in Scotland from July 12. So, Fior would argue, there are ways of breaking through to the pub audience. But at the moment these breakthroughs appear to be very rare.

Be versatile

Versatility was a challenge that was widely spoken about by the owners of Baileys and Malibu in last week's analysis of speciality spirits. As Nicki Daw pointed out earlier, drinkers are rejecting the short, over ice, serve. It is a similar story in niche liqueurs. Brand owners and licensees need to find new and exciting ways of serving liqueurs.

This is a view Rupert Wilkins heavily subscribes to. "I think the liqueurs market is growing but a liqueur has to be versatile or else there is just no point," he says.

"The two things that sell liqueurs are versatility and quality. Promotional activity and good point-of-sale are also vital."

Drinks companies across the board are trying to steer their brands away from the traditional liqueur sales high point of Christmas and New Year. They are investing more in promotions all year round, meaning liqueurs are going to have to be more versatile.Role of cocktailsAccording to Mintel, the increasing popularity of cocktails is leading to growing sales of fruit liqueurs. But this may be a little conservative.

Liqueurs across the spectrum, from chocolate cream liqueurs to nut liqueurs, are being used more and more by the shaker brigade. To a man, drinks companies are seeing this area of the market as the salvation for their liqueur brands. Look at the activity Fior Brands has got involved in, using flair bartender Nicolas Saint-Jean. Other brands, like Maxxium's Bols range are just made for this market.

However, the growth people are seeing with liqueurs in cocktails has to be understood in its full context. It is happening in both on and off-trades. And where this is happening in the on-trade, it tends to be in top-end style bars. So while Cointreau may sell well in Hoxton, its volumes in Leytonstone may be more difficult to hype up. The cocktail and liqueur pub marriage is something I will look at in more detail next week.

Liqueurs: need to know

• By definition a liqueur must contain at least 2.5 per cent sugar by weight. It can be beet, maple, cane or honey sugar or a combination of these.
• Loosely the different types of liqueur can be separated into four categories: fruit liqueurs (Cointreau), herb liqueurs (Benedictine), nut liqueurs (amaretto), and cream liqueurs (Baileys).
• The liqueurs market was worth £680m (including cream liqueurs) in 2005 and it is expected to hit £733m this year.

SHOOTERS

While drinkers have been slamming sambuca and tanking tequila for many years, the shooters category is actually quite new.

After Shock is the daddy of the category - launched in the late 1990s and designed purely as a product to drink in shot form. And since the turn of the century more brands have joined the category, leading to 2001 and 2002, the glory years for shooters when volume sales doubled.

However, growth has slowed since then and in a recent report market researcher Mintel said 2006 will see a small sales decline for the shooters category.

One of the brands that has suffered recently is Maxxium-owned After Shock. It is still the biggest single shooter brand, with 39 per cent market share last year, but that has fallen from a 52 per cent market share four years ago. A significant reason for this is it has come under increasing pressure from rivals such as Sourz and Sidekick, as well as newer players such as Corky's.

Aftershock brand manager Janette Read says the way shooters are retailed in pubs and bars is crucial to the category's and the brand's success: "Aftershock has had its challenges over the years, mainly because of very strong competition. But the big challenge for us now is in the big high street multiple pub groups.

This is possibly because they are not promoting shots as much as they used to - probably because they do not want to be seen as irresponsible.

"Shots are an impulse purchase so understanding how you go about properly promoting these products on the high street is absolutely crucial. We still sell the most in high street multiples - but sales are falling there, while they are growing in tenanted and leased and in independents."

January's AC Nielsen statistics showed After Shock is not the only brand to feel the heat in this category.

Dooley's, Goldschlager, Sidekick, Screamers, WKD 40 and Breezer Twist are just some of the brands that have all suffer