Mixing it up

No longer content with the traditional domain of after-dinner drinks, the modern day liqueur brand owners see the cocktail market as the key to future growth. Gayle Sullivan reports

AN EXPLOSION in the capital’s cocktail scene is helping liqueur brand owners turn over more stock than ever before.  If their product is not a traditional cocktail ingredient, they invent a new cocktail.

It may sound simple, but it’s a labour-intensive area with the ‘mixologist’ in control of creating a new market for drinks once mainly consumed neat or over ice, and an emphasis on training, especially in the booming ontrade sector.

Statistics

Far from being in the doldrums, and thanks to drinks companies’ dedication in finding new customers, liqueur sales are quite respectable with the latest statistics showing a 6% increase by volume (AC Nielsen MAT to WE 1/11/03 to MAT to WE 30/10/04) and a 3% rise in sales for the same period.

Sales of cream liqueurs have stayed roughly the same (AC Nielsen MAT to WE 1/11/03 to MAT to WE 30/10/04) but this sector is still helping to drive the whole category with a reported average volume growth per year of 12.5% for the past several years.

Brand owners speak of ‘deseasonalising’ their brands and creating more opportunities through out the year to drink liqueurs, hence the emphasis on cocktails as Lionel Ehrmann, marketing promotions manager for Cognac-based Grand Marnier, explains:  "We are not heavily promoting Grand Marnier for Christmas and prefer to carry out promotions throughout the year, presenting Grand Marnier as the ideal ingredient for cocktails and as a long drink delicious with tonic, with ginger beer and with crushed ice.

We are very focused on cocktails, we are the only orange liqueur based on cognac and that is one of our USPs.  We are promoting Grand Marnier by what we call revisiting the classics – ie Grand Marnier can make a better (Grand) Cosmopolitan and (Grand) Margarita.

Having said this, we aren’t ignoring the after-dinner drinks market and have launched new premium products with age to cater for this sector."  Like it or not, Christmas continues to dominate sales of liqueurs, with the two last months of the year representing something like 30-40% of total sales.

Ehrmann prefers to concentrate on the basics during this crucial sales period: namely logistics and merchandising.  "It sounds obvious but availability of product is a key factor to maximising sales.  Avoiding stock-outs and product placement is a priority and it is a big challenge to keep retailer’s shelves full right up until December 31st".

Brian Walsh, managing director of C&C International agrees with the focus on attention-to-detail at Christmas.  "The eight weeks before Christmas account for around 50% of our volume sales.

We will place neck collars on bottles in-store and we hope our new mini bottles will sell well over Christmas."  Brand owners for the cream liqueur sector are branching out to attract new customers with initiatives such as mini bottles and lighter, less fat cream liqueurs.

Recent launches and relaunches of cream liqueurs are further proof of confidence in the sector. A relaunch of Irish cream liqueur Carolans earlier this year was followed by the introduction of the Carolans Four-pack, a pack of four 100ml bottles.

C&C International’s latest initiative, which is being rolled out in the US this winter and in other markets from the new year, targets consumers looking for convenientlypackaged single serves and gift ideas.

The launch is part of a €12 million brand support package which, say C&C, should develop Carolans into a million case brand, from current sales of 650,000 cases globally per annum. The ‘drinks-to-go’ concept is designed to attract new consumers unfamiliar with Carolans.

The pack design is flexible in use and ideal for multiple locations in-store and on-shelf. Ann O’Leary, marketing manager for the brand claims that this provides retailers with new opportunities for the product.

"Sampling and trials have always been key in our marketing strategy and the Carolans Four-pack encourages sampling and provides the consumer with a convenient, easy to use format."

Carolans and Grand Marnier are not the only brands to capitalise on the rise of the cocktail culture especially in the capital.  The growth of style bars and the cocktail movement has presented significant new opportunities for Frangelico, the Italian hazlenut liqueur which currently has sales of 300,000 cases worldwide, primarily in the US, accounting for almost half of all sales.

"The global cocktails scene holds few boundaries for Frangelico", said C&C International’s Kevin Abrook.  "The irresistible taste, quality and versatility of Frangelico means that it is increasingly sought out by top chic bars all over the world. Signature drinks like Frangelico Nuts and Berries (with raspberry liqueur), as well as bespoke cocktails, are rapidly finding favour in many ostensibly different markets."

The rise of the cocktail sector is assisting a 7% year on year growth for Drambuie.  Caroline Sutcliffe, marketing director of Drambuie International, explains their marketing focus. "Drambuie has an important role to play in cocktails – it makes a fantastic replacement for whisky in a Sour or Manhattan – for example.

Drambuie’s marketing emphasis has been on educating the trade as to what Drambuie actually is.  "Whisky with a Secret" stresses our whisky credentials and we are working to communicate this positioning to the trade and consumers, says Sutcliffe."

"Seasonal purchase pattern is reflected in our marketing plan, in particular through off trade channel activity such as price promotions and display.  The offer of £3 off 70cl is running in most major multiple grocers across the country throughout November and December. ASDA also have an exclusive offer of £5 off 1L nationwide." 

On-trade boom

Jason Danciger, purchasing director for the SFI Group, which has the Slug & Lettuce, Bar Med and Fiesta Havana chains under its umbrella, has a simple explanation for a 40% growth in cocktail sales.

"Staff training and a focus on ‘suggestive selling’ is our approach.  We listen to our people and our customers and the result is a tailored training program and an innovative range of quality products.  Good category partners are also crucial and help us continue to be the best offer on the high street.

It’s definitely a boom time for us as far as cocktails are concerned and we are selling more liqueurs as a result."  The traditional hotels are also cashing in on the trend and no hotel worth its salt is without a trendy bar area and knowledgeable staff.

"Our business increased last year by about 20%, with the liqueurs and mixers category increasing in line with that," says assistant bar manager at Claridge’s Hotel, Bronko Milovanovic.

"Definitely the way to sell more liqueurs is to use them as a cocktail ingredient.  Last year we came up with a cocktail based on sloe gin, not usually a big seller, and now it’s selling very well.  We also create cocktails which are a twist on the classic drink. People are much more knowledgeable about their cocktails and drinks in general and our list is just a guide.  We make plenty of bespoke cocktails."

The achingly trendy and award-winning Dusk bar is one of the latest New-York style London lounge bars.  Launched in September 2003, cocktails and lots of them is its raison d’etre – Dusk sports a mind-boggling 23 different martinis. Co-owner of Dusk, Nidal Ramini explains the rationale behind the bar.

"The inspiration here was to fill what we saw to be a gap in the market, i.e. local bars that can offer the same experiences as the more established venues in areas such as Soho and Chelsea as well as Clerkenwell.

It is a very exciting time for the liqueur category.  The growth in cocktails has led to bars stocking more premium quality liqueurs, especially in the cream market. Bartenders do chat and compare various liqueurs and it is an area that we focus on when constructing our drinks lists (we use Joseph Cartron).

Also, a lot of bartenders are getting into some of the ‘forgotten’ liqueurs such as Chartreuse, Dubonnet etc.  I think that customers appreciate different things these days and like to have a bartender’s feedback on the difference a certain liqueur will make to a drink.

For example, I’m a big fan of Illy Espresso liqueur, I think it makes fantastic drinks and is an alternative to Kahlua, Toussaint etc."  Training is key to increasing knowledge and therefore growth in the cocktail sector, according to both brand owners and bar staff.

Mirko Cattini manager of the Blue Bar at The Berkeley stresses the importance of training staff to mix cocktails and maintain a list which changes twice yearly.  Daniel Haigh, bar and cocktail trainer at the SFI Group, has seen the trend for premium products increase cocktail sales from 10% to 15% of total sales across the Group per week.

"The emphasis has moved away from pre-packaged spirits to fine and rare ingredients whether it be liqueurs, vodka, rum or gin."  The cocktail market is undoubtedly fuelling growth in the liqueur sector and brand owners are looking to sell more volume via mixed drinks, with Christmas still vital but increased activity year round.

The canniest companies are finding new spins on old classics as well as marketing liqueurs as an accompaniment to everything from ice cream to coffee.  With the levels of investment in the on-trade, the current boom is perhaps more noticeable here but the  offtrade can also capitalise on the new sophistication of the market which has moved on significantly from after-dinner drinks with ice and a slice.