Emerging Flavors in Alcoholic Drinks Key flavor trends in beer, vodka, gin, liqueurs, rum and flavored alcoholic beverages
Reference Code: BI00049-004 Publication Date: March 2011
About the author
Victoria Sidebottom has nearly a decade’s experience of researching consumer markets, specializing in developing consumer insight analysis and brand insight case studies. She has worked on projects for institutions such as the National Coffee Association of the USA and EBSCO Information Services, and has also contributed to a variety of consumer goods focused publications, including Marketing Week, Contagious magazine, Stagnito New Products magazine and Foodbev.com.
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Table of Contents
About the author 2
Disclaimer 2
Executive summary 11
Beer 11 Flavored Alcoholic Beverages (pre-mixed drinks) 11 Vodka 12 Liqueurs 13 Gin 13 Rum 14
Chapter 1 Introduction 15
Market overview 15 Definitions 16
Chapter 2 Beer 17
Summary 17 Introduction 17 Flavor trends 18 Regional analysis 19
Segment analysis 19 Breakdown of key flavor types 20
The top 20 flavors in beer 22
Growth flavor types 23 Growing: Citrus 23 Growing: Ginger 25 Growing: Berry 26 Falling: Malt 28
Innovation trends 29 Craft beer makers innovate with flavors 29
Traditional flavor revivals 29
Experimenting with hop varieties 30
Session friendly beers with subtle flavors 30
Women friendly beer flavors 31 Beer giants’ female focused efforts 32 Females targeted with fruit beers 32 Female brewers 33
Conclusions 34
Chapter 3 Flavored Alcoholic Beverages 35
Summary 35 Introduction 35 Flavor trends 36 Regional analysis 36
Segment analysis 37 Breakdown of key flavor types 38
The top 20 flavors in flavored alcoholic beverages 39
Growth flavor types 40 Growing: Soft fruit 40 Growing: Citrus 41 Growing: Sweet 42 Falling: Berry 43
Innovation trends 45 Energizing alcoholic drinks that do not court controversy 45
Positioning flavored alcoholic beverages for at-home drinking 46
Natural ingredients and plant extracts 47
Targeting the flavor experimenter 47
Attracting the male drinker 47
Conclusions 49
Chapter 4 Vodka 50
Summary 50 Introduction 51 Flavor trends 51 Regional analysis 52
Segment analysis 53 Breakdown of key flavor types 54
The top 20 flavors in vodka 55 Growing: Apple/Pear 56 Growing: Citrus 57 Growing: Sweet 58 Falling: Berry 59
Innovation trends 61 “Better for you” vodkas 61
Vodka infusions offer more natural flavorings 62
Creative savory flavors 64
Vodka designed for food pairings 65
A flavor backlash 66
Conclusions 68
Chapter 5 Liqueurs 69
Summary 69 Introduction 69 Flavor trends 70 Regional analysis 70
Segment analysis 71 Breakdown of key flavor types 72
The top 20 flavors in liqueurs 73 Growing: Berry 74 Growing: Citrus 75 Growing: Spicy 76 Falling: Sweet 77
Innovation trends 79 Stressing the heritage of flavors 79
Reformatting flavors in line with artisanal roots 80
Keeping ingredient mix a secret 80
Herbal liqueurs boost drinking experience 81
Liqueur flavors for celebrations 82
Using ethical ingredients 83
Conclusions 84
Chapter 6 Gin 86
Summary 86 Introduction 86 Flavor trends 87 Regional analysis 87
Segment analysis 87 Breakdown of key flavor types 88
The top 20 flavors in gin 90 Growing: Botanicals 91 Growing: Floral 92 Growing: Nut 93 Falling: Generic fruit; exotic fruit 94
Innovation trends 95 Bridging traditional with contemporary style 95
Lighter gins encourage new drinkers to the sector 96
Using fresh fruit from cold distillation 97
The healthy Mediterranean diet 98
Conclusions 99
Chapter 7 Rum 100
Summary 100 Introduction 100 Flavor trends 101 Regional analysis 101
Segment analysis 102 Breakdown of key flavor types 102
The top 20 flavors in rum 104 Growing: Citrus 105 Growing: Spicy 106 Growing: Anise; botanicals 107 Falling: Sweet 107
Innovation trends 109 Combining rums from multiple islands 109
Going back to American roots 110
Big brand offers own take on craft rum 110
Conclusions 111
Chapter 8 Conclusions 113
Key motivations for accepting flavor innovation 114 The Long-term Loyalist, Category Novice and Experimenter 115
Appendix 117
Methodology 117 Secondary research 117
Glossary/Abbreviations 117 Bibliography/References 118
Table of figures
Figure 1: The beer flavor wheel was developed to help describe beer flavors 18 Figure 2: Leading flavor types (%) for new product launches in beer, 2007–10 21 Figure 3: Citrus beers have grown in popularity due to their exotic but safe image 24 Figure 4: A desire for nostalgic products is fueling ginger beer’s growth 26 Figure 5: Berry flavored beers offer a seasonal addition to the beer category 27 Figure 6: Declining flavor categories for new product launches in beer (percentage point change), 2007-10 28 Figure 7: Fruit flavored beers aimed at female drinkers 33 Figure 8: Leading flavor types (%) for new product launches in flavored alcoholic beverages, 2007-10 37 Figure 9: Soft fruit is a popular flavor type for Flavored Alcoholic Beverage launches 40 Figure 10: Manufacturers have capitalized on the popularity of citrus flavors with novel flavored alcoholic beverage launches 42 Figure 11: Cocktails often inspire flavored alcoholic beverage sweet flavors 43 Figure 12: Declining flavor categories for new product launches in FABs (percentage point change), 2007–10 44 Figure 13: Ypioca Guarana contains guarana for its energizing properties 46 Figure 14: Mike’s Hard Lemonade is focused on the male Flavored Alcoholic Beverage drinker48 Figure 15: Leading flavor types (%) for new product launches in vodka, 2007-10 53 Figure 16: Apple and pear vodkas have been launched in specific fruit varieties 57 Figure 17: Citrus flavored vodkas have appeared in premium variations 58 Figure 18: Intense and subtle flavors can be tasted in sweet vodka varieties 59 Figure 19: Declining flavor categories for new product launches in vodka (percentage point change), 2007–10 60 Figure 20: Healthy vodkas are emerging, including herbal and açai infused varieties 62 Figure 21: Skyy Spirits has produced a successful vodka infusions line 63 Figure 22: Savory flavored vodkas are emerging in vodka 64 Figure 23: Leading flavor types (%) for new product launches in liqueurs, 2007–10 72 Figure 24: Berry flavored liqueurs are growing in popularity 74 Figure 25: Citrus flavored liqueurs have a strong global following 75 Figure 26: Spicy flavors add an interesting taste sensation to liqueurs 77 Figure 27: Declining flavor categories for new product launches in liqueurs (percentage point change) 2007–10 78 Figure 28: Emphasizing heritage for new flavors 80
Figure 29: Keeping brand ingredients and processes a secret appeals to consumers 81 Figure 30: New herbal flavors include hibiscus, jasmine and wild fennel 82 Figure 31: Aphrodope claims to contain aphrodisiac ingredients 83 Figure 32: Ethically produced ingredients are a growing trend in liqueurs 84 Figure 33: Leading flavor types (%) for new product launches in gin, 2007-10 88 Figure 34: The arms race in gin for the most number of botanical flavors 91 Figure 35: Floral notes add differentiation to gin brands 92 Figure 36: Nutmeg can add a winter seasonal flavoring to gin 93 Figure 37: Declining flavor categories for new product launches in gin (percentage point change) 2007–10 94 Figure 38: Oxley Classic English Dry Gin uses a unique cold distillation method 97 Figure 39: Gin Mare capitalizes on the image of the healthy Mediterranean diet 98 Figure 40: Leading flavor types (%) for new product launches in rum, 2007–10 103 Figure 41: Citrus adds a tangy note to rum 105 Figure 42: Spicy flavors offer an exotic, intense flavor element to rum 106 Figure 43: Anise and botanical flavor types have grown in popularity in rum 107 Figure 44: Declining flavor categories for new product launches in rum (percentage point change), 2007–10 108 Figure 45: Banks Five Island Rum incorporates rum from different countries 109 Figure 46: Bacardi Reserva Limitada presents a premium offering from a major brand 111 Figure 47: Consumers can be categorized into three types with differing flavor demands 116
Table of tables
Table 1: Global alcoholic drinks market size by category ($bn), 2009–14 15 Table 2: Regional share of beer launches (%), 2007-10 19 Table 3: Leading flavor types in global beer launches (%), 2007-10 20 Table 4: Top 20 flavors in global beer launches, 2007-2010 22 Table 5: Regional share of flavored alcoholic beverage launches (%), 2007-10 36 Table 6: Leading flavor types in global flavored alcoholic beverage launches (%), 2007–10 38 Table 7: Top 20 flavors in global flavored alcoholic beverages launches, 2007-2010 39 Table 8: Regional share of flavored vodka launches (%), 2007–10 52 Table 9: Leading flavor types in global vodka launches (%), 2007–10 54 Table 10: Top 20 flavors in global vodka launches, 2007-2010 55 Table 11: A guide to vodka taste based on gradings 67 Table 12: Regional share of liqueur launches (%), 2007–10 70 Table 13: Leading flavor types in global liqueur launches (%), 2007-10 71 Table 14: Top 20 flavors in global liqueur launches, 2007-2010 73 Table 15: Regional share of gin launches (%), 2007–10 87 Table 16: Leading flavor types in global gin launches (%), 2007–10 89 Table 17: Top 20 flavors in global gin launches, 2007-2010 90 Table 18: Regional share of rum new product launches (%), 2007-10 101 Table 19: Leading flavor types in global rum launches (%), 2007–10 102 Table 20: Top 20 flavors in global rum launches, 2007-2010 104
Executive summary
Beer
The largest growing flavor types in global beer launches in the 2007-10 period were citrus, ginger and
berry, while the biggest falling was malt. The growth of soft drinks-like flavors at the expense of more
traditional beer flavors is indicative of manufacturer attempts to attract new consumers (particularly
women) and compete against ciders and flavored alcoholic beverages.
New trends in flavors in the beer category combine both traditional and modern elements of. Craft beer
makers particularly are introducing many novel flavors, such as savory flavors. Another key trend is
very traditional brewing styles and flavors, and the use of old style ingredients and other flavorings. In
addition, efforts are being made to experiment with different hop varieties to create different flavored
beers.
At the same time, the Asian influence on the beer market is also changing perceptions of what “beer” is
– a move away from the idea of a highly traditional, pure product unchanged in centuries. In short,
Japanese and Chinese consumers are less resistant to changes in flavors and the format of what beer
should be, and their influence will spread westwards.
Flavored Alcoholic Beverages (pre-mixed drinks)
The most popular flavor categories in new flavored alcoholic beverage launches in 2010 were citrus,
cocktail and exotic fruit, while the fastest growing flavors for the 2007–2010 period were soft fruit, citrus
and sweet flavors.
The category is relatively new, meaning that consumers have fewer preconceived ideas of what flavors
should be available, in contrast to other alcoholic drinks categories. In addition, there are no well known
base flavors to the drinks, so manufacturers are free to produce a wide range of flavor mixes in their
products.
New trends to emerge in flavored alcoholic beverages include energizing drinks targeted at older, stay
at home consumers, and the user of much less sweet flavors. In addition, more natural and plant
extract flavors such as chili are appearing in flavored alcoholic beverages to give brands an air of
healthiness.
The drive towards more botanical and less sweet flavors is part of an clear move to attract more male
drinkers. We are seeing more masculine packaging and marketing and flavored alcoholic beverages
positioned as a refreshing, often summer focused, alternative to beer.
Vodka
The leading flavor types in new vodka launches in 2010 were citrus, sweet and berry, and the fastest
growing flavor types of the 2007–2010 period were apple/pear, citrus and sweet flavors. Because citrus
and berry flavors are reasonably mature now, manufacturers are now marketing specific fruit varieties
and linking flavors with regions to give more of a sense of authenticity. A key trend is that subtle flavors
are gaining traction with the emergence of infused flavor vodkas instead of syrup flavored vodka
brands.
Good-for-you vodkas are also becoming popular, leading manufacturers to infuse their products with a
variety of healthy ingredients, such as açai berries. Vodka already carries a perception of being a
slimmer’s drink and manufacturers are pushing it as a healthier alternative to more sugary or calorific
drinks.
Savory vodkas have become a hot trend although these are more novelty for the most part and unlikely
to have anything like the impact of sweeter, fruit-based flavors.
Flavored vodkas are also being marketed specifically as an accompaniment to specific foods and as a
key ingredient in various homemade recipes..
There has been a flavor backlash in some vodka circles: as with other products, a counterreaction to
innovation and experimentation is a move by traditionalists to purer and higher end products. Plain
vodka is promoted as being flavorsome enough on its own without adding additional ingredients and
there are significant numbers of new, super premium vodkas competing on the basis of who is the most
pure/filtered etc.
Liqueurs
Berry, citrus and spicy were the strongest growing flavor categories in new liqueur launches in the
period 2007–2010. Berry flavors have a strong female focus, with growing flavors like cranberry
attractive due to their positive health profile. Citrus flavor types have a more gender neutral target, but
have a strong leaning to the summer months as refreshing beverages. Meanwhile, spicy flavors are up
and coming and include chili and pepper, which offer interesting tasting notes that contrast well to
sweet flavorings. The sweet flavor type itself is falling out of favor, as consumers increasingly demand
more sophisticated flavors.
Liqueur manufacturers are looking to the past for flavor inspiration. Heritage flavors are being revived
for modern tastes, while well-known liqueurs are being reformatted to be more true to their original
concoctions. Manufacturers are sensing that liqueurs may come back into fashion as a retro or cult
choice.
Ethical products have filtered into the liqueur sector: organic, fairtrade and locally grown ingredients
featuring increasingly in new products, thereby aiming to attract the green consumer to their brands.
Gin
Botanicals and floral were the strongest growing flavor categories from 2007 to 2010, while generic fruit
and exotic fruit were the flavor types seeing the highest falls.
Traditional flavors still have a strong in gin, and non-standard flavors have failed to take off as
consumers do not perceive them to complement the product’s traditional flavorings of juniper and
herbal/botanical infusions.
Lighter gins seen by manufacturers as key to attracting new consumers – especially lightening the
flavor profile with floral or less strong botanical flavors.
New production methods are being introduced to bring new flavors to gin, including the use of cold
distillation which enables fresh fruit to be used instead of dried fruit.
“Healthier” gin ingredients also bring an opportunity option of attracting health conscious consumers to
the sector. For example, one brand aims to exploit the appeal of the Mediterranean diet by using
ingredients grown in this region in its gin.
Rum
In 2010, exotic fruit, citrus, spicy and sweet were the leading flavor types in new rum launches, while
the largest growing flavor types of the 2007-2010 period were citrus, spicy, anise and botanical.
The rum sector is becoming increasingly consolidated, with a few brands accounting for a high
proportion of the market. One of the ways in which smaller producers are hitting back is to band
together and produce blended offerings that offer something different to the competition.
There are small rum producers in the US that are attracting the attention of rum commentators by
offering unique tasting rums to rival their larger competitors. These players are attempting to bring rum
production back to its roots in the US through micro-distilling.
Larger rum producers are aiming to capitalize on the resurgent interest in craft rums by releasing rums
that have ultra-premium characteristics and an appealing production story.
Chapter 1 Introduction
Market overview
Given the intense competition for market share in the alcoholic drinks sector, manufacturers are under constant pressure to establish product differentiation. Having seen little or no experimentation in the not so distant past, flavor innovation has become a key means both to differentiate and drive penetration among new audiences. This is particularly relevant to the large but more mature categories such as beer, and the small but faster growing sectors such as vodka and rum (see Table 1). New flavors can provide the impetus to boost a stagnating category, or create interest in an up and coming sector that consumers have not delved into as much.
Table 1: Global alcoholic drinks market size by category ($bn), 2009–14
Category 2009 20102011 2012 2013 2014 CAGR 2009–14
Beer 526.3 531.1537.1 543.9 551.8 560.2 1.3% Vodka 48.1 49.751.4 53.1 54.9 56.7 3.4% Liqueurs 30.1 30.831.4 32 32.7 33.3 2.1% Rum 25.6 26.727.8 29 30.2 31.4 4.2% FABs 22.4 22.422.4 22.5 22.6 22.8 0.3% Gin & Genever 14.4 14.7 15.1 15.4 15.8 16.2 2.4% Others 473.5 480.6488.5 497.1 506.4 516.1 1.7%
Total 1,140.4 1,155.81,173.6 1,193.0 1,214.3 1,236.7 1.6%
Source: Business Insights BUSINESS INSIGHTS
Manufacturers are looking outside their own sectors to see what flavors are emerging and gaining popularity.
Cross pollination among drink category flavors is prevalent as marketers seek out what is on-trend in other sectors which could also work for them.
A key source of innovation for the alcoholic drinks industry is soft drinks. In the past five years, soft drinks manufacturers have innovated heavily in natural products, functional products and, a combination of those two trends, integrating superfruits and more exotic botanicals into their products. In alcoholic drinks, we are seeing similar trends emerge into the mainstream – flavors such as cranberry are popular as they have both a “better for you” appeal and the right balance of sweetness and depth. For similar reasons, citrus flavors remain popular, although we are seeing more differentiation – where previously lemon or orange predominated now manufacturers are distinguishing what type of lemon, or using less common citrus flavors such as lime.
Definitions
This report will look at the impact of flavor innovation in the alcoholic drinks market and will analyze flavor trends in the following alcoholic drinks categories:
Beer;
Flavored alcoholic beverages;
Vodka;
Liqueurs;
Gin;
Rum.
Chapter 2 Beer
Summary
The largest growing flavor types in global beer launches in the 2007-10 period were citrus, ginger and
berry, while the biggest falling was malt. The growth of soft drinks-like flavors at the expense of more
traditional beer flavors is indicative of brewer attempts to attract new consumers (particularly women)
and compete against ciders and flavored alcoholic beverages.
New trends in flavors in the beer category combine both traditional and modern elements of. Craft beer
makers particularly are introducing many novel flavors, such as savory flavors. Another key trend is
very traditional brewing styles and flavors, and the use of old style ingredients and other flavorings. In
addition, efforts are being made to experiment with different hop varieties to create different flavored
beers.
At the same time, the Asian influence on the beer market is also changing perceptions of what “beer” is
– a move away from the idea of a highly traditional, pure product unchanged in centuries. In short,
Japanese and Chinese consumers are less resistant to changes in flavors and the format of what beer
should be, and their influence will spread westwards.
Introduction
Beer is the largest alcoholic drinks category in the world, accounting for global sales of $531.1 billion in 2010.
However, growth is relatively weak, with an estimated compound annual growth rate (CAGR) of 1.3% between 2009 and 2014.
Introducing flavored beers, both familiar flavors and more exotic variants, has been an attractive means of boosting sales. Brewers have sought to attract new drinkers to the category as well as inspiring the interest of existing frequent beer drinkers.
Flavor trends
In the 1970s, Morten Meilgaard developed the Beer Flavor Wheel, showing the various flavor traits different types of beer could have. The wheel, shown in Figure 1, was subsequently jointly adopted as the flavor analysis standard by the European Brewery Convention, the American Society of Brewing Chemists, and the
Master Brewers Association of the Americas. Flavored beers are designed to both adhere to the chart’s tasting notes, and add other taste elements to the beer tasting experience that are not included in this chart.
In this way, both traditionalist beer drinkers and newcomers to beer are encouraged to experiment with the new flavors that are constantly being added to the beer category.
Figure 1: The beer flavor wheel was developed to help describe beer flavors
Source: beerflavorwheel.com BUSINESS INSIGHTS
Regional analysis
Europeans are the most prolific drinkers of beer in the world. In 2010, Europe saw the highest proportion of beer products being launched, with 44% of new launches occurring here (see Table 2). This was considerably more than the next leading region for beer launches, North America, which accounted for just over a fifth of new launches (22.6%). However, beer launches have been less plentiful elsewhere and have fallen in Asia Pacific and the Middle East & Africa. The challenge for brewers is to try and boost beer sales in regions where the product is less successful, and introducing novel flavors is a key way they can do this.
Table 2: Regional share of beer launches (%), 2007-10
2007 2008 2009 2010 Percentage point change 2007–10
Europe 40.3% 41.9%47.9% 44.0% 3.7% North America 21.7% 20.4% 17.7% 22.6% 0.9% Asia Pacific 28.2% 27.6% 17.9% 21.1% -7.1% Latin America 7.8% 9.6% 15.1% 11.4% 3.7% Middle East & Africa 2.1% 0.4% 1.4% 0.8% -1.3%
Source: Product Launch Analytics BUSINESS INSIGHTS
Segment analysis
Traditional beer flavorings such as malt and bitter are the “backbone” of the beer category. However, brewers are adding novel ingredients to beer that offer different flavor sensations in order to attract new consumers to the market. While flavored beers are still in the minority in the category, they are growing in popularity.
Flavor trends in beer launches in the 2007 to 2010 period were dominated by flavors that consumers were already familiar with. Brewers used flavors synonymous with other categories, such as soft drinks, from citrus and berry, to other fruit and sweet flavor types. This is shown by examining both the leading flavor types of the period, and in the fastest growing flavor types in new beer launches (as shown below). Brewers are
attempting to attract consumers with flavorings familiar to them, but sufficiently new to the beer category to garner their interest.
Table 3: Leading flavor types in global beer launches (%), 2007-10
Flavor type 2007 2008 2009 2010 Percentage point change 2007–10
Citrus 14.5% 15.7% 20.4% 23.3% 8.8% Sweet 13.0% 15.0% 15.2% 16.1% 3.1% Berry 4.7% 4.3% 3.0% 9.8% 5.1% Malt 22.1% 19.5%21.5% 9.8% -12.2% Ginger 0.4% 2.8% 1.4% 6.2% 5.9% Exotic fruit 4.9% 3.8% 3.0% 5.2% 0.3% Apple/pear 2.5% 1.8% 2.2% 4.7% 2.2% Soft fruit 4.7% 2.8% 1.7% 4.1% -0.6% Spicy 3.7% 4.8% 5.0% 3.1% -0.6% Chocolate 3.5% 4.6% 2.5% 2.6% -0.9%
Source: Product Launch Analytics and Business Insights analysis BUSINESS INSIGHTS
Breakdown of key flavor types Berry: blackberry, blackcurrant, blueberry, boysenberry, cranberry, elderberry, forestberry, huckleberry,
loganberry, marionberry, raspberry, sourberry, strawberry, and wheatberry
Citrus: Bitter Orange, Blood Orange, Citrus, Grapefruit, Lemon, Lemonade, Lime, Orange, Tangerine,
Yuzu
Ginger: ginger, gingerbread
Malt: barley malt, chocolate malt, barley, malt
Figure 2: Leading flavor types (%) for new product launches in beer, 2007–10
Source: Product Launch Analytics and Business Insights analysis
The top 20 flavors in beer
The table below presents a detailed picture of the top 20 flavors in beer. What is particularly noticeable is the range of sweet flavors at the bottom of the table – brewers introducing flavors such as chocolate, cola and licorice into beer. At the top of the table, we would expect to see more diversity coming through in the future as brewers look to identify more specific lemon flavors, or lemon fusion flavors (i.e. lemon and another flavor, such spice or ginger).
Table 4: Top 20 flavors in global beer launches, 2007-2010
Flavor type Flavor 2007 2008 2009 2010 Percentage point change 07-10 Citrus Lemon 4.0% 6.9% 5.0% 10.4% 6.3% Malt Malt 14.2% 12.2% 11.3% 9.3% -4.9% Ginger Ginger 0.4% 2.5% 1.4% 6.2% 5.9% Sweet Honey 1.2% 1.8% 3.0% 5.2% 4.0% Apple/pear Apple 2.1% 1.5% 2.2% 4.1% 2.0% Sweet Caramel 4.4% 3.0% 3.0% 4.1% -0.2% Citrus Citrus 2.5% 2.3% 6.6% 3.6% 1.2% Citrus Lime 2.6% 2.0% 3.0% 2.6% 0.0% Spicy Spicy 2.8% 4.6% 4.7% 2.6% -0.2% Soft fruit Cherry 1.4% 1.5% 0.6% 2.1% 0.7% Other fruit Fruit 7.0% 5.6% 5.2% 2.1% -4.9% Citrus Grapefruit 0.7% 1.0% 0.8% 2.1% 1.4% Citrus Lemonade 1.6% 0.0% 1.1% 2.1% 0.5% Citrus Orange 2.6% 2.0% 3.9% 2.1% -0.6% Exotic fruit Pineapple 0.7% 0.5% 0.0% 2.1% 1.4% Berry Raspberry 1.8% 0.8% 0.3% 2.1% 0.3% Berry Strawberry 0.2% 0.5% 1.1% 2.1% 1.9% Chocolate Chocolate 2.8% 2.3% 1.9% 1.6% -1.2% Sweet Cola 0.5% 0.8% 0.3% 1.6% 1.0% Anise Licorice 0.7% 1.5% 0.3% 1.6% 0.9%
Source: Product Launch Analytics BUSINESS INSIGHTS
Growth flavor types
Growing: Citrus
Citrus was the largest beer flavor type in 2010, featuring in 23.3% of new global beer launches in 2010. It was also the fastest growing flavor type in new beer launches, rising 8.8 percentage points in the period
2007 to 2010. This highlights its continued popularity over the latter half of the decade.
Citrus includes the familiar flavors of lemon, lime, grapefruit and orange, as well as more exotic and specific variants such as yuzu, bitter orange and blood orange. Of these, lemon was the most popular citrus flavor within this category in 2010, and also the most popular flavor of all in the beer category – accounting for
10.4% of all new launches in beer. It has also grown in prominence since 2007, rising by 6.3 percentage points in 2010.
Citrus flavored beers first came to mainstream prominence in western markets with the trend for placing lime slices in Mexican bottled beers such as Corona and the lemon aftertaste of Belgian beer brands such as
Hoegaarden and the tradition of adding flavors to wheat beers. Big brands have sought to capitalize on the popularity of this by introducing lime flavored beers. These include Anheuser-Busch which introduced a lime flavored variant of its popular Bud Light brand in 2008. At the time, the brand’s vice president of marketing
Dave Peacock commented that, "The palate for consumers has broadened, and they are looking for more variety. We need to keep up with that." Peacock noted that while lime beer would not appeal to “loyalists”, it would appeal to the circa “29% of beer consumers (that) have some form of sweeter palate." Lime, and citrus flavors overall, therefore, have been used to attract consumers who actually may dislike the traditional taste of beer.
Citrus as a flavor type also has an appealing dualism in that it is both exotic and safe at the same time; exotic in that lemon and lime flavoring remind consumers of far away places, yet familiar and safe because citrus is a well established flavoring in food and drink, if not within the beer market itself. Brewers perceive citrus as offering good marketing potential to experimenters and existing drinkers.
Figure 3: Citrus beers have grown in popularity due to their exotic but safe image
Source: Company information BUSINESS INSIGHTS
Recent launches have seen the emergence of citrus flavored beers which also include another, often more exotic flavoring. For example, Samuel Adams introduced the 2010 Longshot Ales in Lemon Pepper Saison to the US in 2010, which Samuel Adams employee homebrew winner Jeremy White said "is brewed with
Grains of Paradise, an exotic tropical spice." It is claimed to have a peppery flavor complemented by a slightly sweet aroma with hints of vanilla and citrus. In addition, Anadolu Efes Biracilik ve Malt Sanayii introduced an agave and lemon flavoring of its Mariachi Dry brand of beer in Turkey in 2009. Both offer citrus notes with added flavor elements derived from additional ingredients, helping them standout in the market.
Another company that has seen the potential of citrus as a beer flavoring is German flavor and fragrance company Symrise. In 2010, the company launched a new range of beverage flavors to capitalize upon citrus status as a “multi-faceted classic” with world appeal. Symrise's new beer offerings included '7 Citrus', a blended beer that incorporates seven different citrus fruits, and ISO! which is a low-alcohol beer with grapefruit lemon flavoring.
The company noted that its decision to concentrate on citrus beverages was prompted by the familiarity of the flavor, with over half of the entire global drinks market consisting of citrus beverages, encompassing
everything from waters and juices to sodas, beers and liqueurs. Consequently, the firm feels that it is on safe ground with the new launches it describes as, "new interpretations of familiar [citrus] flavors". Stephan Räker,
Symrise category development director of non-alcoholic beverages said: “Citrus gives people freshness and tanginess – orange and lemon flavors in particular have always had a certain exotic touch. At the same time, though, they are well-established, and they delight a wide audience.”
Growing: Ginger
Ginger was the second highest growing flavor type of the 2007 to 2010 period and also in the top three of the strongest flavor types in the beer category in 2010 (see Figure 2). The flavoring has strong associations with traditional beverages, such as non-alcoholic ginger beer and ginger wine. Nostalgia is therefore an important part of its revival, particularly in countries where non-alcoholic ginger beer is traditional. With the growing interest in nostalgia among consumers, prompted by the recession (and the desire to seek comfort in the past), brewers have launched alcoholic ginger beers to tap into this trend.
In 2010, for example, Halewood International launched a ginger beer to complement its ginger wine brand
Crabbie’s. Other recent European launches include Frank’s alcoholic ginger beer from Kopparberg Cider of
Sweden, Chalky’s Bark, Blandford Fly and Ginger Tom (from Sharp’s, Hall & Woodhouse and Robinson’s, respectively).
Commenting on the trend for ginger beer, Al Cross, brand manager for Crabbie’s at Halewood, said: “The palate of consumers is changing and they’re becoming more adventurous. There are people who may have tried ginger biscuits when they were a child, but have grown up and find that their tastes have matured and ginger is something they’re rediscovering,” (As quoted by morningadvertiser.co.uk, 2010).
Another aspect that is influencing the growth in ginger beer launches is the growing popularity of Asian cuisine in western markets. Ginger beer is a traditional beverage in Asia and remains popular there. And the flavor is now becoming more popular in Europe where Asian culture is having a growing influence on society’s eating and drinking habits.
In addition, the healthy nature of the ingredient has proved a key selling point for some brewers. Fentimans, for example, produces Hollows Superior Alcoholic Ginger Beer in the UK, and emphasizes that it is made from 100% natural ingredients and is free from artificial colors, flavors and preservatives. Another recent launch, in the US, is Ineeka's Organic Himalayan Green Tea Bier. It is claimed to contain 100% organic hops, 100% organic ginger, yeast and water, and green tea. Both brands attempt to tap into consumers’ growing health concerns which have led them to choose beverages, including alcoholic drinks, that are perceived as being better for them.
Figure 4: A desire for nostalgic products is fueling ginger beer’s growth
Source: Company information BUSINESS INSIGHTS
Growing: Berry
The berry flavor type encompasses a wide range of berry flavors, from the familiar, such as strawberry and raspberry, to more exotic variants like wheatberry and marionberry. This broad coverage contributed to it becoming the third fastest growing category of beer launches over the past four years and the joint third most popular in 2010 (see Table 3 and Figure 2).
The strongest performing berry flavors in 2010 were raspberry and strawberry which both featured in 2.1% of new beer launches. Strawberry, in particular, has become more popular over the past few years having been barely used as a beer flavoring in 2007. In contrast, raspberry has been more static, growing by only 0.3
percentage points over the same period. Berry flavors have connotations of both the exotic and the familiar, with many berry types being well used in drinks categories. They are perceived as being safe to experiment with in beer products, while also offering some degree of experimentation.
While many fruit beers have an image of being sweet, berry flavored beers often also have sour properties to appeal to consumers who may have a less sweet tooth but are also enthusiastic drink experimenters. Sour beer, for example, is often fermented with berries to help provide its distinct sour taste. Originating in
Belgium, sour beer is now becoming increasingly popular in other parts of the world such as the US. Aged in barrels and fermented with special yeasts and lactic acid bacteria, sour beers have fruits such as raspberries and cherries added to them before blending the end results. Russian River Consecration is a sour beer sold in the US which is fermented with Brettanomyces yeast and 30 pounds of dried currants to create a sour taste.
In addition, berry flavored beers are often perceived as a seasonal addition to beers lines, being offered in summer months as a refreshing alternative to conventional beers. This limited edition status can add to their desirability as they are not sold always available
Figure 5: Berry flavored beers offer a seasonal addition to the beer category
Source: Company information BUSINESS INSIGHTS
Falling: Malt
The flavor type that has fallen the most over the past four years is malt. Although this was the joint third most popular flavor in new beer launches in 2010, malt as a specific, identifiable and marketed flavor in beer, fell
12.2 percentage points in popularity from 2007 to 2010 (see Figure 6). At a global level, this is a fundamental shift in flavor preferences which signals the extent to which lighter and more flavored beers are driving uptake.
Figure 6: Declining flavor categories for new product launches in beer (percentage point change), 2007-10
-12.2% Malt
-4.9% Generic fruit
-3.0% Botanical
-2.8% Bitter
-1.1% Other
-14% -12% -10% -8% -6% -4% -2% 0%
Source: Product Launch Analytics and Business Insights analysis BUSINESS INSIGHTS
Innovation trends
The following section offers an analysis of the current innovation trends that are impacting the flavored beer sub-category.
Craft beer makers innovate with flavors
Because microbreweries often have a size advantage, they are typically far more innovative in terms of launching new flavors than the larger breweries. One craft brewer that has recently launched an innovative flavored beer is Harpoon Brewery, based in Boston, US. Its Harpoon 100 Barrel Series Island Creek Oyster
Stout contains 180 oysters in the hundred-barrel batch. Produced as a limited edition in a small batch, the beer is said to blend the roasted notes of the stout with the mineral flavors of the oysters. While perhaps too extreme for large-scale production it is indicative of two important trends:
Brewers seeking to position beer as flavor matched with food, in the way that sommeliers do for wine;
Brewers upscaling beers with the addition of high end, rare or exotic ingredients
Harry Schuhmacher, editor of Beer Business Daily, commented that it is younger drinkers that are driving the rise of craft beers due to their desire for beverages with bolder flavors. "Younger people like things that have bolder taste in coffee, chocolate, anything. Younger people were raised with bolder flavors. A Bud Light just tastes awfully light to someone who's been drinking Starbucks since the seventh grade," (quoted in the
Chicago Tribune, 2010). Craft beer brewers therefore have an opportunity to target their flavored offerings at younger aged drinkers in their 20s and 30s who show enthusiasm for beers that use adventurous flavors.
Traditional flavor revivals
A running theme through this report will be that where flavor innovation takes place, its natural counterpart is a resurgence in traditional flavors, traditional ingredients, and a focus on purity/authenticity of the product. As well as using new flavor notes to add interest in the beer category, brewers have looked to the past to revive traditional ingredients that add flavor elements to their brews. This is the case with US-based Oskar Blues
Grill & Brew, which has experimented with mixing traditional malts in its Oskar Blues Mama's Little Yella Pils
brand. The beer contains a variety of different malts, namely pale malt, German specialty malts and traditional (Saaz) and 21st century Bavarian hops, along with German yeast. Such variety in malt content differentiations the drink from its rivals.
Another company that has looked to the past for inspiration in beer product innovation is Lion Brewery in the
US, which partnered with Drinks Americas to reintroduce Rheingold in 2010, a brand of beer which was last available in the 1970s. Originally developed over a hundred years ago, the brand reportedly had a strong following in New York in the 1950s. The revival aims to capitalize on this heritage through its can design and marketing. However, Lion Brewery is said to have altered the original recipe to cater for modern consumer tastes, highlighting how the modern can interject with heritage brands to make a more appealing product.
Experimenting with hop varieties
Industry players have also been seeking to create different taste sensations in the beverage by researching different varieties of a core ingredient of beer: hops. Oregon State University (OSU), for example, received a
$1m grant in 2010 from the hops seller IndieHops to study the aroma of hops and the potential to create new flavors from the ingredient's different varieties.
Shaun Townsend, an OSU hop breeding specialist, commented: "We've had varieties in the field that smell like buttered popcorn, chocolate and spearmint; whole different varieties and aromas," (as quoted by KVAL, the Oregon CBS Affiliate). This highlights how brewers can both offer new flavors while retaining the core purity of the product ingredients.
Session friendly beers with subtle flavors
Flavored beers are often perceived as being good for drinking in moderate amounts, perhaps as an alternative to a glass of wine. But a key weakness is that they can be too much for the palate if consumed in large quantities. However, brewers have also developed beers that are designed to be ideal for session drinking; that is, being enjoyable over several glasses.
A session beer can be defined as anything that is light in alcohol which can be consumed without overtaxing a drinker with its flavor or intensity. These beverages demand more subtle flavorings that enable the
consumer to drink more without feeling overwhelmed by the taste. Such flavorings are often developed from the base ingredients of beer rather than adding ingredients to its traditional format. Again, this type of production process makes the end product appealing to core beer drinkers (who on the whole prefer traditional beer formats over those with added flavors) rather than new drinkers to the category.
Various brewers are attempting to develop session beers that are flavorful yet subtly so, thereby encouraging the drinker to have more than one glass in one session. The potential of session drinks with subtle but interesting flavor notes is highlighted by the growth of numerous brands, including:
Revolution Brewing Co’s Workingman Mild. An English luncheon beer with toffee and caramel notes.
Two Brothers Brewing Co.'s Long Haul Session Ale. An amber-hued mild ale aged in oak. Jason Ebel,
Two Brothers owner, noted that: "We wanted to produce a beer that has a tremendous flavor with a lot
going on but not a lot of alcohol. We wanted it to be a beer that you can sit down and enjoy more than
one of."
Metropolitan Brewing's Krankshaft Kolsch. A beer brewed like a lager, yet one that uses ale yeast.
Doug Hurst, Metropolitan brewer is quoted as saying: "I'm a fan of less is more and balance. It's about
subtlety rather than being hammered over the head."
Women friendly beer flavors
Despite sizeable changes in the way women drink, beer drinking is still very male dominant. In the UK, for example, only 10-15% of beer is consumed by women. Women often perceive beer to have an unpleasant flavor, be high in calories and cause bloating. As a result, beers designed specifically for women has been of key development area for many brewers. At the moment, flavor is most commonly used to target this market.
Beer giants’ female focused efforts
Molson Coors is one beer giant that is attempting to woo the female drinker. It has set up the Bittersweet
Partnership business unit with the aim of finding out more about women’s attitudes to beer. With the insight it is collecting through this unit, the company aims to launch a specific range of beer for women in 2011, featuring flavors and packaging designs to appeal to the feminine palate.
In addition, an organization called Dea Latis has been launched in the UK, which aims to ‘bring beer to women'. The group, named after the Celtic goddess of beer and water, is backed by industry heavyweights including Heineken, Wells & Young, Greene King and the Campaign for Real Ale (Camra). It aims to promote beer to women through a series of marketing efforts. These organizations show the concerted efforts the industry is undertaking to encourage the unenthusiastic female drinker to take a more positive view of beer.
Females targeted with fruit beers
A long held strategy has held that women like flavored beers. In recent years, however, it is less the sweet aspect of this flavor choice that has been promoted and more its healthy and refreshing benefits, along with being ideal to enjoy in the summer months. In this way, such products are designed to appeal to women’s demands in their drinks choices.
An emphasis on natural ingredients has been part of this trend, with women demanding drinks that have fewer artificial ingredients that are perceived as being bad for health. In 2009, Rushing Dolls launched the
Harry's Beer Original Beautiful Beer for Women in the UK, described as a "delicious pale ale designed with the female palate in mind with a refreshing citrus zing" and featuring "beautiful, natural ingredients."
Other recent female-targeted fruit flavored beers to be launched around the world include the Essa
Pineapple-Grapefruit beer released in Russia by SABMiller, and the lemon flavored Redd’s which is distributed in Ecuador by Bavaria SA.
Figure 7: Fruit flavored beers aimed at female drinkers
Essa Pineapple- Redd's - Flavored Harry's Beer - Original Grapefruit Beer - Limon Beautiful Beer for Women
Source: Business Insights BUSINESS INSIGHTS
Female brewers
Although the majority of beer is brewed by men, there have emerged craft breweries which are run by women. For example, Carol Stoudt is founder of Pennsylvania’s Stoudt Brewing Company, producing female friendly beers such as American Pale Ale which is said to have a citrus aroma. In addition, New York-based
Harlem Brewing Company was founded by Celeste Beatty, and produces beer such as the Golden Ale, a light-bodied ale with a nut-flavored influence. Such breweries offer a woman’s take on the brewing process and could appeal to the female drinker because of this.
Conclusions
There is significant innovation in flavors in beer. At the same time, the use of malt as a specific,
marketable flavor has fallen significantly. Despite this, there is a natural counter-reaction to flavor
innovation as brewers seek to differentiate with lighter flavors on the basis of purity, traditional brewing
methods – all trends that have occurred in areas such as vodka.
Citrus flavors remain predominant. However, they look to be quite saturated. Brewers will need to
differentiate more on the basis either of the quality of citrus flavor or introduce more exotic citrus
flavors.
Savory flavors will remain niche. However, flavor matching – the idea that certain beers better suit
certain foods is an important trend that will impact on the flavor notes that brewers use to describe their
beers.
There is still significant scope to introduce more natural flavors and superfruit flavors into beer.
Although these are likely to remain quite niche, the most likely candidates for flavors are sweet/tart
superfruits including cranberry, pomegranate, ginger.
A key development is the growing importance of the Asian beer market, where traditional sacred cows
about what does/does not constitute a beer are less observed. This will drive flavor innovation that will,
in turn, influence western drinking patterns.
Chapter 3 Flavored Alcoholic Beverages
Summary
The most popular flavor categories in new flavored alcoholic beverage launches in 2010 were citrus,
cocktail and exotic fruit, while the fastest growing flavors for the 2007–2010 period were soft fruit, citrus
and sweet flavors.
The category is relatively new, meaning that consumers have fewer preconceived ideas of what flavors
should be available, in contrast to other alcoholic drinks categories. In addition, there are no well known
base flavors to the drinks, so manufacturers are free to produce a wide range of flavor mixes in their
products.
New trends to emerge in flavored alcoholic beverages include energizing drinks targeted at older, stay
at home consumers, and the user of much less sweet flavors. In addition, more natural and plant
extract flavors such as chili are appearing in flavored alcoholic beverages to give brands an air of
healthiness.
The drive towards more botanical and less sweet flavors is part of an clear move to attract more male
drinkers. We are seeing more masculine packaging and marketing and flavored alcoholic beverages
positioned as a refreshing, often summer focused, alternative to beer.
Introduction
Flavored alcoholic beverages (FABs) is one of the smallest categories in the alcoholic drinks market, recording global sales of $22.4bn in 2010. It consists of alcoholic soft drinks (such as malt beverages), pre- mixed spirits (such as vodka and coke mix in a can) and wine coolers (made from wine and fruit). Sold mainly in cans and bottles, the drinks are sweet in nature and often high in alcohol content. The fact that the sweetness masks the alcohol content is a point of controversy, fuelling criticisms that FABs attract under age drinkers. Indeed, an alternative name for this category is 'alcopops'.
The category is relatively new compared to other alcoholic sectors having gaining popularity in the US in the
1980s and 1990s with the introduction of brands such as Bacardi Breezer and Diageo's Smirnoff Ice as well as successful smaller producers such as Mike's Hard Lemonade. The modern day challenge for manufacturers is to develop new flavors that appeal to adult drinkers and, increasingly, an older profile of consumers.
Flavor trends
Regional analysis
New flavored alcoholic beverages launches were most common in Asia Pacific in 2010, where over 40% of new products were introduced (see Table 5). However, Europe is catching up, accounting for only a slightly smaller proportion of new flavored alcoholic beverage launches in 2010. While launches in Europe have fallen since 2007, they are growing in the smaller Latin American market, highlighting the confidence manufacturers have that this is a growing category, where consumers are receptive to new product introductions and flavors.
Table 5: Regional share of flavored alcoholic beverage launches (%), 2007-10
2007 2008 2009 2010 Percentage point change 2007–10
Asia Pacific 29.8% 53.4% 40.8% 40.9% 11.1% Europe 45.5% 30.0% 34.1% 39.2% -6.2% North America 20.7% 8.8% 11.3% 10.1% -10.6% Latin America 2.9% 6.2% 11.9% 8.0% 5.1% Middle East & Africa 1.1% 1.5% 1.8% 1.7% 0.6%
Source: Product Launch Analytics BUSINESS INSIGHTS
Segment analysis
The largest flavor types in newly launched flavored alcoholic beverages for 2010 were citrus, cocktail and exotic fruit, which have traditionally been popular flavor types in other alcoholic drink categories. In addition, the largest growing flavor types for the 2007-10 period were soft fruit, citrus and sweet (see Figure 8 and
Figure 12 and Table 6).
As flavored alcoholic beverages have little specific underlying flavor or engrained consumer expectations, manufacturers have had much greater latitude to experiment with flavors. However, manufacturers are still relying on flavor types that are familiar to consumers.
Figure 8: Leading flavor types (%) for new product launches in flavored alcoholic beverages, 2007-10
Source: Product Launch Analytics and Business Insights analysis BUSINESS INSIGHTS
Table 6: Leading flavor types in global flavored alcoholic beverage launches (%), 2007–10
Category 2007 2008 2009 2010 Percentage point change 2007–10 Citrus 23.2% 29.8%22.5% 26.4% 3.2% Cocktail 12.5% 11.9% 13.5% 14.3% 1.8% Exotic fruit 14.9% 14.8% 18.6% 13.8% -1.1% Berry 13.4% 8.3% 8.7% 11.0% -2.4% Soft fruit 6.4% 7.5% 9.2% 9.7% 3.3% Sweet 4.6% 5.6% 5.1% 7.6% 2.9% Grape 7.8% 5.2% 9.0% 5.5% -2.3% Apple/pear 3.9% 7.1% 5.1% 4.4% 0.5% Ginger 0.7% 1.3% 0.5% 1.8% 1.1% Botanical 2.7% 1.9% 1.4% 1.4% -1.3%
Source: Product Launch Analytics and Business Insights analysis BUSINESS INSIGHTS
Breakdown of key flavor types Berry: acai, ashberry, berry, blackcurrant, cassis, chokeberry, cranberry, elderberry, forestberry,
lingonberry, raspberry, red berry, red fruit, redcurrant, strawberry, wildberry;
Citrus: Amanatsu, Bitter Orange, Blood Orange, Citrus, Grapefruit, Hassaku, Japanese Citron, Kabosu,
Lemon, Lime, Mandarin, Orange, Pink Grapefruit, Pink Lemonade, Red Orange, Ruby Grapefruit,
Shekwasha, Sudachi, Tangelo, Tropical Orange, White Grapefruit, Yuzu;
Cocktail: amaretto, bourbon, cognac, gin, rum, sangria, saketequila, shochu, vodka, whisky, white rum;
Exotic fruit: banana, carambola, coconut, dragonfruit, exotic fruit, feijoa, guava, gold kiwi, goyave,
guanabana, kiwi, lychee, mango, maracuja, melon, papaya, passionfruit, pineapple, pomegranate,
starfruit, tropical watermelon;
Soft fruit: apricot, cherry, Japanese apricot, peach, plum, sour cherry, white peach, yellow plum;
Sweet: candy, calpis, caramel, cola, honey, lemonade, marshmallow, sugarcane, sweet, toffee, vanilla.
The top 20 flavors in flavored alcoholic beverages
The table below presents a detailed picture of the top 20 flavors in flavored alcoholic beverages. Because of the historic nature of flavored alcoholic beverages in the past, there has been a strong focus on citrus and soft fruits and cocktail flavors. However, there is a clear opportunity for manufacturers to explore more “better for you” flavors, including superfruits, and to use botanicals to position flavored alcoholic beverages as an option for beer drinkers.
Table 7: Top 20 flavors in global flavored alcoholic beverages launches, 2007- 2010
Flavor type Flavor 2007 2008 2009 2010 Percentage point change 07-10 Citrus Lime 2.7% 2.7% 2.9% 5.1% 2.4% Citrus Orange 6.6% 6.9% 5.3% 5.1% -1.5% Citrus Lemon 5.4% 6.7% 6.3% 4.8% -0.6% Soft fruit Peach 3.7% 3.5% 3.8% 4.4% 0.7% Cocktail Vodka 6.8% 4.6% 2.7% 4.4% -2.5% Sweet Cola 1.0% 2.5% 1.5% 3.9% 2.9% Citrus Grapefruit 4.6% 6.7% 4.6% 3.9% -0.7% Berry Strawberry 3.4% 2.9% 3.2% 3.9% 0.5% Exotic fruit Pineapple 3.7% 3.1% 4.1% 2.8% -0.9% Exotic fruit Mango 2.4% 3.3% 2.9% 2.5% 0.1% Apple/pear Apple 2.9% 4.2% 3.2% 2.3% -0.6% Berry Cranberry 2.7% 1.3% 1.2% 2.3% -0.4% Cocktail Rum 2.4% 2.1% 3.2% 2.3% -0.1% Sweet Calpis 0.5% 1.3% 1.4% 2.1% 1.6% Berry Raspberry 2.4% 0.6% 0.7% 2.1% -0.4% Cocktail Tequila 0.2% 0.8% 1.0% 1.8% 1.6% Cocktail Whisky 0.0% 0.2% 0.2% 1.8% 1.8% Exotic fruit Lychee 0.5% 1.7% 0.9% 1.6% 1.1% Grape Muscat 0.5% 0.6% 1.0% 1.6% 1.1% Exotic fruit Pomegranate 1.0% 0.4% 0.7% 1.6% 0.6%
Source: Product Launch Analytics BUSINESS INSIGHTS
Growth flavor types
Growing: Soft fruit
Soft fruit was the largest growing flavor type from 2007 to 2010, rising 3.3 percentage points, and the fifth most popular Flavored Alcoholic Beverage flavor type of 2010. It includes fruits such as peach, apricot and cherry. Out of these, peach was the most popular soft fruit flavor of 2010, occurring in 4.4% of new Flavored
Alcoholic Beverage launches. It was also the fourth most popular flavor overall for this year.
These fruit flavored FABs are designed to appeal to female drinkers, using feminine packaging alongside the sweet flavoring. For example, the US-based Dirty Blonde brand of cocktail are FABs contained within wine bottle style packaging and in feminine colors. The Peach Passion Bellini variant is described as combining
“luscious peach nectar” with “a hint of sensuous passion fruit essence”, language designed to be appealing to women.
In addition, other recent introductions in soft fruit flavors have been launched that offer unique point of difference. The Choya Umeshu Jelly [Japanese apricot liqueur jelly], for example, is a ready-to-drink, low- alcohol cocktail type product that contains a unique jelly made with Japanese apricot liqueur. Choya claims that this is the first jellied alcoholic beverage with an effervescent mouthfeel to be launched in Japan. The jelly drink concept is popular in Japan and adventurous consumers of FABs are attracted to its unusual positioning in a familiar soft fruit flavor (see Figure 9 below).
Figure 9: Soft fruit is a popular flavor type for Flavored Alcoholic Beverage launches
Source: Company information BUSINESS INSIGHTS
Growing: Citrus
Citrus was the leading flavor type in FABs in 2010, accounting for over a quarter of all new launches. It was also the second strongest growing flavor since 2007.
The citrus group consists of such flavors as lime, orange and lemon, which were the three most popular flavors in spirit-branded beverages in 2010. Lime and orange are the leading citrus flavor types, both featuring on 5.1% new launches in 2010. However, although sharing joint place, orange has fallen slightly in popularity, featuring on slightly fewer products in 2010 than in 2007, while lime has gained share, rising 2.4 percentage points.
In Japan, two recent launches standing out: Calpis Bartime Rakuen no Orange [orange in paradise] is a ready-to-drink, low-alcohol cocktail made with orange juice and dark rum which utilizes a novel process of being aged in oak casks. An original milk spirit is also added to produce a distinctive flavor. In addition, the
Japanese market has also seen the recent launch of Morita Frusshu Sangria Taste, which is a solid jelly made with a carbonated ready-to-drink, low-alcohol cocktail. It is said to have a light body red wine base, with orange and cinnamon flavorings.
The US market has also seen the launch of a novel citrus FAB. The Cordina mar-GO-rita Wine Cocktail in a
Classic Lime flavor comes in a resealable, foil, stand-up pouch which is designed to be frozen and “eaten” as a frozen cocktail (see below). Such launches show that combining a novel aspect such as production method or mouthfeel with a familiar flavor can be a successful means for FAB manufacturers to gain consumer interest in their product.
Figure 10: Manufacturers have capitalized on the popularity of citrus flavors with novel flavored alcoholic beverage launches
Source: Company information BUSINESS INSIGHTS
Growing: Sweet
The sweet flavor type was the third fastest growing from 2007 to 2010, and the sixth most popular in new launches in 2010. It consists of popular drink mixes such as cola and lemonade, as well as flavors such as vanilla and honey. Cola was the most popular sweet flavor type in 2010, featuring on 3.9% of new flavored alcoholic beverage launches. Its popularity is steadily rising having increased by 2.9 percentage points from
2007 to 2010 to become the sixth most popular flavor.
The sweet flavor type is popular with manufacturers largely because of its versatility and ability to create a pleasant flavor that can take the edge off strong alcoholic ingredients. There have been various new launches of sweet FABs that have innovative concepts. For example, the Artesanos del Cochiguaz Manjar
Lucuma Colada Artesanal, recently launched in Chile, is described as a "syrupy caramel candy and eggfruit" flavored homemade-style cocktail drink. The caramel candy and eggfruit combination would appear to be new to the category. In addition, also in Chile, the Capel Drinks Capel Coctel has been introduced in a Toffee
Cream Colada variety, which is a novelty for the flavored alcoholic beverage sector. Elsewhere, in Japan a new honey-based alcoholic drink called Ei-Sho-Gen Sonomama Nomeru has been launched in a novel type of glass packaging, which resembles a jar of honey. These products, shown in Figure 11, show a real
willingness for particularly interesting because they show an overlap across liqueurs and raise the idea of innovation coming from confectionery and dessert flavors.
Figure 11: Cocktails often inspire flavored alcoholic beverage sweet flavors
Source: Company information BUSINESS INSIGHTS
Falling: Berry
Berry flavors, including familiar favorites such as strawberry, blackcurrant and blackberry, alongside more unusual flavors such as açai and cassis, are losing favor with flavored alcoholic beverage manufacturers.
Berry flavors fell by 2.4 percentage points in new product launches in 2010 over 2007.Nonetheless, it should be noted that this is a minor drop. Berry flavors in total were the fourth most popular flavor type. In addition, certain berry flavors, such as strawberry, continue to feature high up on the FAB flavor leaderboard (it was the ninth most popular flavor in 2010, featuring in 3.9% of new products.
Figure 12: Declining flavor categories for new product launches in FABs (percentage point change), 2007–10
-2.4% Berry
-2.3% Grape
-2.0% Generic fruit
-1.3% Botanical
-1.1% Exotic fruit
-0.8% Tea
-3.0% -2.5% -2.0% -1.5% -1.0% -0.5% 0.0%
Source: Product Launch Analytics and Business Insights analysis BUSINESS INSIGHTS
Innovation trends
The following section offers an analysis of the current innovation trends that are impacting flavored alcoholic beverages.
Energizing alcoholic drinks that do not court controversy
One of the controversies to impact the FABs category is its attraction to underage drinkers, particularly given that these drinks typically have a high alcohol content. Fruit and sweet flavors can mask the alcohol taste which leads to the perception of FABs as “training drinks.” Even among legal drinking age consumers, however, the beverages are controversial. Many of these drinks are marketed as being revitalizing and ideal for high energy nights out. Some FABs contain a combination of caffeine and alcohol to enable the consumer to limit the feeling of drunkenness and stay alert for longer. This can mean they do not feel drunk and actually consume more alcohol than they otherwise would.
At the end of 2010 US regulators proposed a ban on the sale of caffeine-containing alcoholic drinks. This has had implications for energizing FABs producers, leading many to reformulate their beverages in anticipation of the ban. Phusion Projects, for example, has reformulated its best selling Four Loko brand to remove the stimulants caffeine, guarana and taurine.
The challenge for manufacturers is to develop energizing FABs that are designed to be consumed sensibly and not for binge drinking, with flavors that are still appealing to consumers. One brand that is marketed differently from many American brands is the Brazilian brand Ypioca Guarana, which is said to be the first drink that combines the traditional flavor of sugar cane liqueur with the energizing properties of guarana (see
Figure 13). The brand is packaged in plastic bottles that encourage drinking at home – it is not as extravagantly packaged as some energizing brands. Energizing FABs can therefore be marketed as at-home drinks to liven up tired consumers.
Figure 13: Ypioca Guarana contains guarana for its energizing properties
Source: Company information BUSINESS INSIGHTS
Positioning flavored alcoholic beverages for at-home drinking
As well as energizing FABs beginning to be sold for at-home occasions, manufacturers are also concentrating on producing pre-mixed drinks suitable for drinking at home. Steve Hamilton, innovation and nurture director at Diageo GB, noted the rise of this trend: "Manufacturers are investing in this category, and really positioning the drinking occasion in an in-home setting for the first time…Among consumers who want to drink spirits, there are barriers to purchasing them. Consumers ask themselves: 'Have I got a bottle at home? Is it chilled? Have I got the right mixer? What are the right proportions to use?' With these cans, it's easy," (quoted in The Grocer, 2010).
In addition, Theo Lioutas, senior vice president, director, R&D, with Brown-Forman, also noted the importance of at-home drinking occasions to the FABs market. “Consumers have shifted their consumption lately to more in-home rather than on-premise due to the tough economic conditions. This trend was recognized by our company and addressed immediately by intensifying our activity in the ready-to-drink
(RTD) and ready-to-pour (RTP) categories,” (quoted on ingredientsnetwork.com).
In order to stand out in the market, such companies have released novel flavored offerings that aim to attract the at-home drinker. Brown-Forman, for example, has launched Jack & Ginger RTD in Mexico, and El
Jimador New Mix Margarita in Spicy Mango and Paloma RTD flavors for the US market. These are sufficiently different to attract consumers looking for a more adventurous at-home drink.
Natural ingredients and plant extracts
In line with other drinks categories, natural flavorings are a popular trend in FABs. Consumers are demanding beverages that are free from artificial ingredients and contain flavors derived from nature.
Leaving aside the debate about whether “natural” flavors are truly natural or not, the key issue is one of positioning. Natural flavors are perceived as a healthier alternative to chemical-based flavorings.
For example, the Vbase vodka mix from Canada-based Base Concept combines vodka, natural plant extracts and concentrated blackberry, cranberry and chokeberry juices. In addition, the US available Tilt Malt
Beverage from Anheuser-Busch comes in four versions (Green Lemon Lime Citrus, Blue Raspberry, Red
Punch, and Purple Grape) which contain natural fruit flavor and certified colors. Instead of a simple line of ingredients therefore, new FAB launches are often infused with a plethora of natural ingredients to provide a distinct flavor offering sufficiently different from the competition.
Targeting the flavor experimenter
Some unusual flavors are appearing in FABs to attract experimental consumers bored with traditional flavor offerings. Examples of recent launches include the chili and papaya flavored Palio wine cooler introduced to
Germany and Switzerland, and an agave flavored wine cooler in a pouch called Cordina. The latter also has the additional novelty of being designed to be frozen before consumed. These flavors are less sweet than traditional FABs, and are more targeted at slightly older consumers.
Attracting the male drinker
As Kevin McLaughlin, former vice president of marketing for one of the leading male-focused FAB brands,
Mike’s Hard Lemonade, noted back in 2006: “The category constantly fights to hold onto its male demographic,” (quoted in bevspectrum.com). A key opportunity for FABs is to encourage switching from spirits or beer. Mike’s Hard Lemonade (shown in Figure 14), for example, markets its beverages as a refreshing alternative to beer, coming in summer season flavors such as Original Lemonade as well as newer flavors such as Mango Punch and Fruit Punch. Of note is the masculine packaging of the beverages and also their focus on natural ingredients, a factor which acknowledges that men are also demanding healthy ingredients.
Figure 14: Mike’s Hard Lemonade is focused on the male Flavored Alcoholic Beverage drinker
Source: Company information BUSINESS INSIGHTS
Conclusions
The flavored alcoholic beverage category is extremely competitive, where flavor innovation plays a key role in helping brands differentiate. Some key observations of flavor developments are as follows:
It is becoming much less acceptable to develop energy FABs Nonetheless, it would be over optimistic
to believe that the market for caffeine-enhanced FABs will disintegrate overnight, with younger
consumers still demanding alcoholic energy drinks. One way in which manufacturers are addressing
this is by toning down the marketing, introducing less sweet flavors and using more natural energy
ingredients like guarana.
FABs are following other drink categories by using more natural ingredients. There are real lessons to
be learnt from the soft drinks market. The term “natural” is very overused in soft drinks to the point of
being almost meaningless and manufacturers who want to build sustainable brands need to be
prepared to prove the natural credentials of the ingredients they use. From a marketing standpoint, the
key question is how “natural” adds a price premium – how can the natural flavor be positioned as
making the brand more exclusive, or adding a better flavor, or used in conjunction with a formulation
that is inherently healthier than alternatives.
FABs for men can be expected to be a niche of the market in the near-term. Only a small proportion of
brands use flavor to target male consumers. The key question here is how to use flavor to encourage
switching, especially from beer. At present, many attempts to appeal to male consumers are slightly
crass – they are not positioned as something consumers might want to drink more than once in an
evening. More traditionally “male” flavors such as ginger, cider apple and botanicals.
Chapter 4 Vodka
Summary
The leading flavor types in new vodka launches in 2010 were citrus, sweet and berry, and the fastest
growing flavor types of the 2007–2010 period were apple/pear, citrus and sweet flavors. Because citrus
and berry flavors are reasonably mature now, manufacturers are now marketing specific fruit varieties
and linking flavors with regions to give more of a sense of authenticity. A key trend is that subtle flavors
are gaining traction with the emergence of infused flavor vodkas instead of syrup flavored vodka
brands.
Good-for-you vodkas are also becoming popular, leading manufacturers to infuse their products with a
variety of healthy ingredients, such as açai berries. Vodka already carries a perception of being a
slimmer’s drink and manufacturers are pushing it as a healthier alternative to more sugary or calorific
drinks.
Savory vodkas have become a hot trend although these are more novelty for the most part and unlikely
to have anything like the impact of sweeter, fruit-based flavors.
Flavored vodkas are also being marketed specifically as an accompaniment to specific foods and as a
key ingredient in various homemade recipes.
There has been a flavor backlash in some vodka circles: as with other products, a counterreaction to
innovation and experimentation is a move by traditionalists to purer and higher end products. Plain
vodka is promoted as being flavorsome enough on its own without adding additional ingredients and
there are significant numbers of new, super premium vodkas competing on the basis of who is the most
pure/filtered etc.
Introduction
Considered by some consumers to be relatively bland in its original state, vodka has had flavorful ingredients added to it for many years to be more appealing to consumers, starting in Eastern Europe where the drink originated. The Absolut brand from Sweden has had a major influence introducing flavored vodka into
Western and Eastern European markets.
Absolut was the first major vodka brand to successfully launch flavored varieties into Western Europe and the US, and began to market these additions in the 1980s. Following the global success of Absolut, many other vodka brands have introduced flavored varieties as a means of creating growth in the category. This has also prompted other spirit brands to follow suit: Danielle Eddy, spokeswoman for the Distilled Spirits
Council, noted: "Flavored vodkas have opened the door for flavored rums and infused tequilas and the different types of gins out there. Flavored vodka has started the trend of other flavored products."
The flavored vodka market is maturing. Vodka brands now include herb and spice infusions, savory variants and good-for-you antioxidant formulations.
Flavor trends
Vodka originated in Russia and Poland, before expanding into other Eastern European countries and Nordic states. Now a global phenomenon, vodka has become the leading spirits category in the US. Vodka is classified in the US as "neutral spirits, so distilled, or so treated after distillation with charcoal or other materials, as to be without distinctive character, aroma, taste, or color" (Bureau of Alcohol, Tobacco and
Firearms). This definition, which claims vodka has no distinctive taste, is one which many other vodka loving countries would reject, with consumers enjoying the beverage neat in shots. In the US, the preference is for vodka to be used in mixes, cocktails or in a flavored vodka state.
This is not to say that flavored vodka is not popular in its originating countries. In Russia, and Ukraine, vodka flavored with honey and pepper is popular, while in Nordic countries, vodka seasoned with herbs, fruits and spices are popular drinks in midsummer seasonal festivities.
Regional analysis
North America is by far the most popular region for flavored vodka launches, accounting for well over half of all global launches in 2010. This is a substantial increase from 2007, showing how the market has taken off in the region in the past few years (see Table 8). In contrast, the global share of new flavored vodka launches in Europe have fallen sharply. This is likely to highlight a growing trend for unflavored, traditional vodkas among Europeans, instead of flavored variants, especially in the vodka heartlands of Russia and
Eastern Europe. Although the actual shift is unlikely to be as severe as the data indicates, it is nonetheless indicative of greater interest in North America for flavored vodkas.
Table 8: Regional share of flavored vodka launches (%), 2007–10
2007 2008 2009 2010 Percentage point change 2007–2010 North America 22.8% 28.9% 32.3% 58.7% 35.9% Europe 59.2% 52.7%47.1% 25.5% -33.7% Asia Pacific 13.6% 16.1% 4.5% 8.2% -5.4% Middle East & Africa 0.0% 0.0% 5.2% 4.1% 4.1% Latin America 4.4% 2.3% 11.0% 3.6% -0.8%
Source: Product Launch Analytics BUSINESS INSIGHTS
Segment analysis
The leading flavor types in global vodka launches in 2010 were citrus, sweet and berry. Citrus and sweet are also fast growing flavor types, being in the top three for highest growing flavor types from 2007 to 2010.
However, apple/pear was the doubled its share of new product launches worldwide (see Figure 15 and Table
9).
Figure 15: Leading flavor types (%) for new product launches in vodka, 2007-10
Source: Product Launch Analytics and Business Insights analysis BUSINESS INSIGHTS
Table 9: Leading flavor types in global vodka launches (%), 2007–10
Flavor type 2007 2008 2009 2010 Percentage point change 2007–10
Citrus 16.1% 16.4%17.6% 20.9% 4.8% Sweet 11.9% 10.2%11.5% 15.1% 3.2% Berry 18.7% 17.7%13.5% 13.7% -5.0% Exotic fruit 9.3% 6.6% 11.5% 11.5% 2.2% Apple/pear 5.2% 4.9% 4.7% 10.1% 4.9% Soft fruit 6.2% 2.7% 6.1% 6.5% 0.3% Ginger 1.0% 2.2% 2.7% 3.6% 2.6% Spicy 4.7% 5.8%4.1% 3.6% -1.1% Chocolate 1.6% 1.3% 1.4% 2.9% 1.3% Grape 0.5% 3.1%2.0% 2.9% 2.4% Coffee 1.0% 0.9% 1.4% 2.2% 1.1%
Source: Product Launch Analytics and Business Insights analysis BUSINESS INSIGHTS
Breakdown of key flavor types Apple/pear: apple, pear;
Berry: açai, ashberry, berry, black raspberry, blackberry, blackcurrant, blue raspberry, blueberry,
cloudberry, cowberry, cranberry, currant, forestberry, huckleberry, raspberry, red bilberry, red fruit,
redberry, rowanberry, strawberry, wild blackberry, wildberry;
Citrus: Blood Orange, Citron, Citrus, Grapefruit, Lemon, Lemonade, Lemongrass, Lime, Mandarin
orange, Pink Grapefruit, Pink Lemonade, Red Grapefruit, Tangerine;
Sweet: caramel, cookie, cola, custard, honey, marmalade, root beer, sweet, soda, sugar, toffee, vanilla.
The top 20 flavors in vodka
The table below presents a detailed picture of the top 20 flavors in vodka. The most major point to note is the emergence of caramel flavored vodka, a real spike from 2007. Because of its versatility, vodka can work with a lot of different flavors. However, the growth of fairly experimental flavors such as root beer and espresso risk creating a sense in which vodka is a novelty drink, and may be damaging to more premium brands.
Table 10: Top 20 flavors in global vodka launches, 2007-2010
Flavor type Flavor 2007 2008 2009 2010 Percentage point change 07-10 Apple/pear Apple 2.6% 1.8% 4.1% 7.9% 5.3% Citrus Lemon 6.7% 5.3% 4.1% 5.8% -1.0% Sweet Caramel 1.0% 0.4% 2.0% 5.0% 4.0% Sweet Vanilla 2.1% 2.2% 2.0% 5.0% 3.0% Citrus Orange 1.0% 2.2% 4.7% 4.3% 3.3% Ginger Ginger 1.0% 2.2% 2.0% 3.6% 2.6% Soft fruit Peach 2.1% 0.4% 1.4% 3.6% 1.5% Berry Raspberry 5.7% 4.0% 2.7% 3.6% -2.1% Berry Blueberry 1.6% 3.5% 0.7% 2.9% 1.3% Exotic fruit Coconut 0.0% 0.0% 0.0% 2.9% 2.9% Chocolate Chocolate 1.6% 1.3% 1.4% 2.2% 0.6% Citrus Citron 0.5% 1.3% 0.0% 2.2% 1.6% Grape Grape 0.5% 2.7% 1.4% 2.2% 1.6% Exotic fruit Mango 1.6% 1.3% 3.4% 2.2% 0.6% Apple/pear Pear 2.6% 3.1% 0.7% 2.2% -0.4% Citrus Pink Grapefruit 0.0% 0.0% 0.0% 2.2% 2.2% Sweet Root Beer 0.0% 0.4% 0.0% 2.2% 2.2% Citrus Citrus 1.6% 0.9% 2.7% 1.4% -0.1% Berry Cranberry 3.6% 1.3% 2.7% 1.4% -2.2% Coffee Espresso 0.0% 0.4% 1.4% 1.4% 1.4%
Source: Business Insights BUSINESS INSIGHTS
Growing: Apple/Pear
Apple/pear vodka flavored vodka product launches grew the most during the 2007-10 period, rising 4.9 percentage points. The growing popularity of these flavors is exemplified by their use by the major brands, such as Absolut and Smirnoff. Its growing popularity is partly due to the subtleness of the flavors, which do not impart an overly potent taste to the vodka. This is a desirable feature, with consumers seeking more natural tasting beverages.
Apple was actually the most popular flavor used in new vodka product launches in 2010. It featured on 7.9% of these launches, rising by 5.3 percentage points compared to 2007. In contrast, pear featured in just 2.2% of new vodka launches in 2010.
An interesting point about apples is how distillers are using the flavor to highlight regional credentials. For example, in the UK, Chase Distillery has developed a Pure English Apple Vodka under the Naked Chase brand which is described as the first vodka made from organic cider apples to be produced using traditional methods. The product addresses trends for purity, naturalness and region specificity (it uses English apples).
In addition, the Absolut brand range has introduced the Limited Edition Brooklyn Vodka with Red Apple and
Ginger flavor in the US. The fact that it is tagged as containing red apples is very specific, helping it stand out from other apple flavored brands.
Figure 16: Apple and pear vodkas have been launched in specific fruit varieties
Source: Company information BUSINESS INSIGHTS
Growing: Citrus
Citrus was the most popular flavor type in vodka in 2010 and also the second largest growing flavor for the
2007–10 period, up 4.8 percentage points. Along with traditional beverage flavor favorites such as lemon and orange, citrus flavors include some more unusual and specific varieties such as mandarin and red grapefruit.
However, traditional favorites remain the most popular. Lemon was still the leading flavor within this citrus- flavored vodkas type and also the second most popular of all flavored vodkas launched in 2010. It featured on 5.8% of new vodka launches in 2010, slightly ahead of orange (featuring on 4.3% of new launches, which positioned it in fifth place on the vodka flavor leader board for 2010).
Because lemon and citrus flavors and reasonable mature, distillers are differentiating in other ways, appropriating some of the marketing language of wine to give flavors a sense of “terroir.” The Coastal Citrus variety of Moon Mountain Vodka is marketed as being created using lemons grown in an ideal coastal
landscape, with a “warm moist coastal climate” and “sandy, well drained soil.” The makers also suggest pairing the vodka with seafood.
Another brand which attempts to add a premium aspect to the citrus flavoring is Flawless Vodka with its
Canary Yellow variety. The product, available in the US, is packaged in an attractive bottle and is colored a delicate yellow shade; the coloring is an essential part of the product marketing, defining the flavor as being subtle and of premium quality.
These premium vodkas highlight an important trend that is becoming important across alcoholic drinks – that the quality of the natural flavor – as is the case in soft drinks – is a point of differentiation. Similarly, the regional aspect of the flavor – as is the case in wine – is also becoming more important.
Figure 17: Citrus flavored vodkas have appeared in premium variations
Source: Company information BUSINESS INSIGHTS
Growing: Sweet
Sweet was the second most popular flavor type in 2010 and the third largest growing in the 2007–10 period.
It includes flavors such as caramel, vanilla and root beer, as well as honey, marmalade and custard. Of these, caramel and vanilla were the most popular sweet flavors in 2010, both featuring in 5.0% of new vodka launches in this year, which made them the joint third most popular overall vodka flavors for this year.
Sweet flavors are designed to appeal to younger vodka drinkers, although there are examples of more subtle sweet flavors marketed at more sophisticated palates.
Examples of this duality are shown in the different types of sweet flavors presented in Garvey Caramel and
Pinky Vodka. The former is marketed in Spain by Grupo Garvey. This is a sweet and creamy drink with a bright and crystalline amber color, designed to appeal to younger drinkers through an intense sweet flavor.
Pinky Vodka, available in India, is a more subtle type of sweet vodka that gains its flavoring from a “slightly sweet winter wheat.” It is said to be hand blended with violets, rose petals, and ten other botanicals to
“create a flavor kissed with the delicate fragrance of a midnight garden".
Figure 18: Intense and subtle flavors can be tasted in sweet vodka varieties
Source: Company information BUSINESS INSIGHTS
Falling: Berry
Although berry flavors were in the top three leading flavor types for new launches in 2010, they saw the greatest decline in share of product launches from 2007 to 2010. The flavor type includes a vast number of berry flavors, such as the well known varieties of raspberry and blueberry. These were the highest ranking berry flavors of 2010, and were also in the top ten of overall vodka flavors for the year. Vodka berry flavors are much more experimental than in other product categories: berry flavors also include more unusual
varieties ranging from ashberry and cloudberry, to wildberry and cowberry, which feature in far fewer vodka launches.
One key reason for the relative decline in the use of berry as a vodka flavor can be found in the production process. According to the master distiller at the Ciroc vodka brand, Jean-Sebastian Robiquet, "It's very difficult to get the rich real flavors you want with raspberries and strawberries". In order to produce a true berry flavor, Ciroc uses natural incense instead of an infusion in its Ciroc Red Berry brand. This is derived from a technique used by pastry chefs to enhance berry desserts and involves creating a marmalade to draw a distillation from. The finished product is said to have a natural fruit leather mouthfeel with a slight zing. The novel incense process highlights how manufacturers are overcoming flavor challenges and looking to food processes to develop more natural tasting, intense flavorings.
Figure 19: Declining flavor categories for new product launches in vodka (percentage point change), 2007–10
-5.0% Berry -4.8% Botanical -2.4% General fruit -2.1% Dairy -1.9% Anise -1.7% Mint -1.6% Other -1.6% Nut -1.1% Spicy -1.0% Bitter -0.8% Floral -0.3% Vegetable
-6.0% -5.0% -4.0% -3.0% -2.0% -1.0% 0.0%
Source: Product Launch Analytics and Business Insights analysis BUSINESS INSIGHTS
Innovation trends
The following section offers an analysis of the current innovation trends that are impacting flavored vodkas.
“Better for you” vodkas
A new trend in recent years is vodkas that claim to be “better for you.” This is a controversial move, because positioning any alcohol as healthy runs all manner of risks, but it highlights how manufacturers are willing to capitalize on consumer perception of what is known about vodka—that it is relatively low in calories—and offer additional health benefits for the consumer that may be attractive to them.
Although also appearing in non-flavored vodka (such as the protein-infused brand Devotion, which claims to increase lean bodymass), the notion of good-for-you vodka has taken off in the flavored vodka category. For example, distillers have used açai berries as a healthy ingredient in a number of vodkas, capitalizing on its growing status in food and drink sectors as an antioxidant with anti-aging and weight loss benefits. These include Veev's Açai Spirit which was launched in the US in 2009, and contains açai, as well as acerola cherry and prickly pear cactus. Van Gogh's Blueberry Açai Vodka and Absolut's Berri Açai represent two other examples of this trend.
In addition, there have emerged some vodkas that contain not one or two but several herbal or fruit infusions that are designed to have multiple health benefits. Belvedere 1X contains ginseng, guarana, açai, ginger, jasmine, eucalyptus, black cherry and sweet almond, for example (see below). This herbal infusion is designed to position vodkas as a type of health tonic.
Figure 20: Healthy vodkas are emerging, including herbal and açai infused varieties
Belvedere 1X Absolut Berri Acai Van Gogh Blueberry Acai
Source: Company information BUSINESS INSIGHTS
Vodka infusions offer more natural flavorings
Infused vodka has emerged as an important component of the flavored vodka market. Instead of having a flavoring added to the vodka, infused flavors are designed to have a more natural, fresh and distinct flavor.
The process involves placing (mainly) fruit in the vodka for a set amount of time where its flavor is allowed to
“infuse” with the vodka. This process is used as an alternative to the more traditional method of adding a fruit syrup in the vodka mix to create flavor.
One of the first main vodka brands to embrace this trend was Skyy in 2008, when its chief executive officer
Gerry Ruvo announced that the company was to replace its entire flavored product line with infused flavored vodkas. Mr Ruvo argued that this unique production element would prevent consumers from confusing
Skyy’s flavored vodkas with its competitor brands. The infused line was designed to impart a more natural taste by steeping the liquor in fruits rather than using syrup. The line has proved to be successful and
consists of varieties such as cherry, citrus and raspberry, showing how consumers have responded positively to its image of naturalness.
Figure 21: Skyy Spirits has produced a successful vodka infusions line
Source: Company information BUSINESS INSIGHTS
Other more minor brands have sought to create differentiation in their own lines by producing flavored vodka lines that involve a more thorough production process. The California-based Charbay Distillery, for example, uses hand-picked fruit extracts in its flavored vodkas. In this way, the company believes it can select the freshest fruit to infuse with its vodka. The vodkas are claimed to be free of essences, perfumes, dyes, fragrances and artificially created natural flavorings. Charbay's production process is central to its marketing strategy. By emphasizing the care taken in sourcing ingredients and creating the final product, the implication is that a higher quality drink is the end result,
In-house created infused vodkas are also being created in restaurants, and appealing to experimental consumers due to the uniqueness of their offerings – they are produced in small batches and in some unusual flavors. The 715 restaurant in Kansas, for example, created a spring and summer menu in 2010 that included a garlic- and Calabrian chili-infused vodka for use in Bloody Marys, while The Bourgeois Pig, also in
Kansas, produces vodkas infused with hot pepper, blackberry, and pineapple ginger. While not all of these flavors will appeal to the general consumer, vodka manufacturers can take inspiration from the small batch products produced in the restaurant setting for potential development across their own larger lines.
Creative savory flavors
Sales of sweet flavored vodkas have led to the development of savory vodkas, with varying levels of success. Product innovations include a bacon flavored vodka from Black Rock Spirits and a salmon flavored vodka from the Alaska Distillery, both US-based and designed for use in Bloody Marys (see Figure 22).
The bacon vodka, called Bakon, has had good reviews, with tastings.com noting that it had: “Convincing aromas of fatty smoked maple bacon bits with a supple dryish medium body and a caramelized bacon, fig, and limestone finish.” The makers behind the salmon vodka claim it has an enjoyable, premium taste. Scotti
MacDonald, a partner in the firm behind the salmon vodka, commented: "Bacon does lend a nice umami flavor, it's that richness. Smoked salmon is going to add that same type of richness, but from a lighter perspective." Savory vodkas are still a novelty, but it is interesting again to see how they are challenging consumers to think about issues such as the length and finish of the drink, and to consider how vodkas might work well with other food or drinks.
Figure 22: Savory flavored vodkas are emerging in vodka
Alaska Distillery Bakon Vodka Smoke Salmon Flavor Vodka
Source: Company information BUSINESS INSIGHTS
Vodka designed for food pairings
As previous sections have noted, flavored vodkas have emerged that are emulating some of the marketing language of wine. We are now seeing restaurants and brands marketing distinct flavors of vodka as suitable pairings with certain meals. These point to the versatility of vodka, in that it can be infused with a wide variety of ingredients that then make it suitable for pairing with specific foods. In this respect, vodka can take advantage of its delicate underlying flavor and almost be used as a blank canvas with which to develop and pair with complementary foods.
The lowfatdietplan.org has produced a list of its recommended vodka and food pairings, as follows:
Peppercorn Vodka: Peppercorn vodka is best paired with seafood that is baked or grilled, homemade
tomato soup, ceviche, steak, and charcuterie.
Chocolate & Orange Vodka: These sweeter flavored vodkas are terrific with truffles, desserts, and
vanilla semi-freddo.
Spiced Vodka: Spiced vodka works well with dishes such as pies, BBQ ribs, or even quail that has
been roasted just right.
Pear Vodka: The gentle flavor of pears can enhance the taste of any pork dish, cheesecakes, crème
brulee, dry cheeses, and some spicy dishes.
Grapefruit, Honey & Citrus Vodka: These are all tart and sweet vodkas that can compliment chicken
dishes, scallops, seafood dishes, shrimp, and roasted duck.
Truffle Vodka: Truffle vodka is a perfect compliment to lobster, escargot, risotto, cheeses, roasts, and
seared tuna.
Expanding on this theme is US-based brand Hard Luck Candy Flavored Vodka, which has been marketed as being versatile in the kitchen. The makers state it does not just go well with certain foods, but is also ideal as an ingredient for a variety of kitchen recipes. The brand comes in candy infused Red Fish and Root Beer
Barrel flavors and is recommended for use “chilled straight up, to mixed drinks, dessert drinks and even in
BBQ and marinade sauces”. Such marketing highlights a desire by manufacturers to expand consumer vision on the possibilities of flavored vodka in the home and therefore increase consumer vodka purchases.
A flavor backlash
A natural counterreaction to the growth of flavored vodkas is a form of backlash, as distillers look to emphasize the subtlety and quality of unflavored vodkas. Many of these premium brands are positioned as having smooth, clean flavors that can be enjoyed on their own. For example, Shakers Vodka is an American brand that promotes itself as a premium vodka that accentuates the natural flavor inherent to the drink. The company has produced a tasting guide, shown below, which shows the processes and tasting notes of different grades of vodka. The higher the grade, the better the flavor, with ultra-premium said to have “true smoothness, more pronounced individual character”.
In 2010, The Fifty Best website named its top three unflavored vodkas based on their taste profiles, describing its favorite, Absolut, as being “smooth, assertive, light, floral” with notes of “caramel, vanilla, cream, white peppercorn, honey, butter.” Finlandia, meanwhile, was described as “smooth, lightly floral, spicy, sweet, medium-body, approachable, complex, nutty, with a nice, clean finish.” Both of these products, therefore, are considered to have flavorful tastes when served neat, showing how premium vodkas are being promoted as flavorsome on their own without added flavorings, and are designed to offer a key point of differentiation to less premium brands.
Table 11: A guide to vodka taste based on gradings
Grade Well Better Premium Ultra-Premium
Typical Corn, milo, Corn, milo, A single, better A single, better ingredients sorghum and sorghum and quality quality other other ingredient like ingredient like inexpensive inexpensive potato, soy or potato, soy or sources of sources of wheat wheat starch starch Distillation 2 - 3 columns 2 - 3 columns 2 - 4 columns 2 - 6 columns Filtration Typically none None or simple None to more None to very charcoal filtering involved charcoal complex filtering filtering Taste Burns A little burny, no Less burny to True smoothness, individual somewhat more pronounced character smooth, can individual exhibit individual character character
Source: Shakers Vodka BUSINESS INSIGHTS
Conclusions
Vodka is one of the most mature flavored alcoholic drinks categories, with much higher levels of flavor experimentation by manufacturers. Some key future trends include:
Vodka flavors will become more focused on subtle and natural flavors as consumers become more
refined in their tastes for flavored vodkas and prejudiced against poorer quality, cheaper flavored
vodkas which have a more syrupy, sweeter taste.
The background history, development, quality and sustainability of vodka flavors will become more
important – as the whole premium flavored and unflavored vodka market matures – premium vodkas
will be challenged on how natural their flavors are, what their sustainability and quality credentials are.
Distillers are likely to develop new methods to add flavors to vodka. Currently, infusions are on-trend,
but other methods could emerge that follow small batch producers into creating more true to life
flavoring.
Chapter 5 Liqueurs
Summary
Berry, citrus and spicy were the strongest growing flavor categories in new liqueur launches in the
period 2007–2010. Berry flavors have a strong female focus, with growing flavors like cranberry
attractive due to their positive health profile. Citrus flavor types have a more gender neutral target, but
have a strong leaning to the summer months as refreshing beverages. Meanwhile, spicy flavors are up
and coming and include chili and pepper, which offer interesting tasting notes that contrast well to
sweeter flavors. Sweet flavors are becoming less popular as consumers demand something more
sophisticated.
Liqueur manufacturers are looking to the past for flavor inspiration. Heritage flavors are being revived
for modern tastes, while well-known liqueurs are being reformatted to be more true to their original
concoctions. Manufacturers are sensing that liqueurs may come back into fashion as a retro or cult
choice.
Ethical products have filtered into the liqueur sector: organic, fairtrade and locally grown ingredients
featuring increasingly in new products, thereby aiming to attract the green consumer to their brands.
Introduction
Liqueurs are typically regarded as strong, sweet, syrupy alcoholic liquors and can be variously flavored. They usually have a lower alcohol content than spirits, and are often served as an after dinner beverage, sometimes being poured directly onto desserts. Famous varieties include kirsch, kümmel, Cointreau, crème de menthe, Drambuie, and Grand Marnier. Liqueurs come in a vast array of flavors, many of which have a strong heritage with a particular region. For example, limoncello has a strong association with southern Italy where it has been made for generations. Global trends in flavor preferences fluctuate, however, with the current trend leaning towards spiced liqueurs that have more of a “punch” and that are not overpoweringly sweet.
Flavor trends
Regional analysis
In 2010, Europe was the strongest region for liqueur launches, accounting for 77.8% of launches.
Manufacturers are experimenting with new flavor mixes and traditional formats (see Table 12). By contrast, consumers in other regions tend to have a stronger leaning towards other flavored alcoholic beverages, such as flavored vodkas, or plain spirits such as whisky.
Table 12: Regional share of liqueur launches (%), 2007–10
2007 2008 2009 2010 Percentage point change 2007–10
Europe 50.8% 57.5%62.9% 77.8% 27.0% Asia Pacific 12.5% 19.4% 13.9% 11.5% -1.0% North America 22.2% 17.6% 18.6% 9.2% -13.0% Latin America 13.1% 2.9% 3.0% 1.5% -11.6% Middle East & Africa 1.3% 2.6% 1.7% 0.0% -1.3%
Source: Product Launch Analytics BUSINESS INSIGHTS
Segment analysis
The leading flavor types in global liqueur launches in 2010 were berry, exotic and citrus (see Table 13), while the three largest growing flavors of the 2007 to 2010 period were berry, citrus and spicy (see below). While berry and citrus flavor types have consistently been favorites with manufacturers over the past few years, spicy is still a minor flavor type which is gaining gradual acceptance as manufacturers show that they are keen to find the next big thing in consumer tastes in liqueurs.
Table 13: Leading flavor types in global liqueur launches (%), 2007-10
Flavor type 2007 2008 2009 2010 Percentage point change, 2007-10 Berry 9.3% 10.2%13.7% 15.2% 5.9% Exotic fruit 12.7% 5.5% 7.6% 13.4% 0.7% Citrus 8.7% 14.2%11.0% 11.5% 2.8% Soft fruit 12.7% 9.5% 9.1% 9.3% -3.4% Botanical 7.1% 6.5%6.7% 7.1% 0.0% Sweet 10.8% 8.7%10.4% 7.1% -3.7% Coffee 5.0% 5.5%6.1% 5.6% 0.6% Chocolate 6.8% 6.9%5.2% 4.7% -2.2% Nut 4.3% 4.7%3.4% 4.3% 0.0% Apple/pear 4.0% 3.6% 6.1% 3.7% -0.3% Spicy 1.9% 2.2%2.4% 3.7% 1.9%
Source: Product Launch Analytics and Business Insights analysis BUSINESS INSIGHTS
Figure 23: Leading flavor types (%) for new product launches in liqueurs, 2007–10
Source: Product Launch Analytics and Business Insights analysis BUSINESS INSIGHTS
Breakdown of key flavor types Berry: Ashberry, Berry, Blackberry, Blackcurrant, Blueberry, Bramble, Cassis, Cloudberry, Cowberry,
Cranberry, Elderberry, Goji, Raspberry, Redcurrant, Rowan Berry, Strawberry, White Currant;
Citrus: Blood Orange, Citron, Citrus, Grapefruit, Japanese Citron, Kaffir Lime, Lemon, Lemon Balm,
Lemongrass, Lime, Mandarin, Orange, Pink Grapefruit, Ruby Grapefruit, Sudachi, Sweet Orange,
Tangerine, Tangy, Yuzu;
Spicy: Chili, Chipotle, Cloves, Green cardamom, Pepper, Red pepper, Spice, Spiced apple;
Sweet: Brown Sugar, Butterscotch, Caramel, Custard, Cream, Honey, Marzipan, Meringue, Nougat,
Sweet, Tiramisu.
The top 20 flavors in liqueurs
The table below shows the top 20 flavors in liqueurs. Liqueurs have a very long tail – across the whole of different product launches there are a wide number of flavors. It is also a reasonably stable market, in the sense that while there are fluctuations in flavors of products launched, they are much less pronounced than in other alcoholic drinks categories. A reasonable interpretation is that the liqueurs market is still quite traditional: with the exception of cranberry, no new flavor has made a radical impact on product launches.
Table 14: Top 20 flavors in global liqueur launches, 2007-2010
Flavor Type Flavor 2007 2008 2009 2010 Percentage point change 07-10 Coffee Coffee 3.7% 4.7% 5.5% 5.0% 1.3% Berry Cranberry 0.3% 0.0% 1.8% 4.3% 4.0% Soft Fruit Cherry 3.4% 3.3% 3.0% 4.0% 0.6% Berry Strawberry 4.3% 1.5% 1.8% 4.0% -0.3% Chocolate Chocolate 4.3% 5.5% 4.3% 3.7% -0.6% Citrus Lemon 2.8% 4.4% 2.7% 3.7% 0.9% Sweet Cream 4.3% 4.0% 3.7% 2.8% -1.5% Sweet Honey 2.2% 1.1% 3.0% 2.8% 0.6% Vanilla Vanilla 3.7% 4.0% 3.0% 2.5% -1.2% Botanical Cinnamon 1.5% 1.5% 0.9% 2.2% 0.6% Exotic fruit Mango 2.2% 0.0% 0.3% 2.2% 0.0% Citrus Orange 1.5% 3.6% 4.0% 2.2% 0.6% Exotic fruit Pineapple 0.9% 1.1% 0.3% 2.2% 1.2% Apple/pear Apple 1.5% 2.2% 4.3% 1.9% 0.3% Exotic fruit Banana 1.9% 0.4% 1.5% 1.9% 0.0% Botanical Herbal 4.6% 1.8% 3.4% 1.9% -2.8% Berry Raspberry 1.5% 1.8% 4.0% 1.9% 0.3% Nut Almond 1.2% 1.1% 1.5% 1.6% 0.3% Exotic fruit Coconut 2.2% 1.1% 0.3% 1.6% -0.6% Citrus Grapefruit 0.9% 0.7% 0.6% 1.6% 0.6%
Source: Business Insights BUSINESS INSIGHTS
Growing: Berry
Berry was the largest growing liqueur flavor type from 2007 to 2010, benefiting from popular flavors such as cranberry and strawberry. Cranberry was the most popular berry flavor type in 2010 and also the second most popular flavor for liqueurs in the period, featuring in 4.3% of new liqueur launches. Strawberry, was fourth more common flavor in liqueur product launches in 2010, accounting for 4.0% of new launches.
In many cases, berry flavors are particularly targeted at women, where product packaging and marketing are feminine looking. For example, Sweet Lips Fruchtlikoer is a German liqueur brand that comes in cranberry and cherry banana flavors (as well as passion fruit), and features female images on the curvy bottles. Where male consumers are also being targeted with berry flavored liqueurs, in some cases it is with novel formats.
The FrostShot frozen liquor shot, for example, is available in the UK, Slovenia and the Netherlands in such varieties as the raspberry flavored Wild Berry Blast and consists of a liqueur contained within a one-shot tube that is designed to be frozen before consumption.
Other berry liqueur launches have been produced in novel flavor variants to gain differentiation from more familiar flavors. For instance, the Zamaretto brand of amaretto liqueur is available in the UK in blue raspberry flavor, a berry that is said to have a more intense and sour flavor than red raspberries. Such flavoring is likely to appeal to consumers desiring something familiar but slightly different from their usual beverage choices.
Figure 24: Berry flavored liqueurs are growing in popularity
Source: Company information BUSINESS INSIGHTS
Growing: Citrus
Citrus was the second largest growing flavor type of the 2007 to 2010 period. It consists of popular flavors such as lemon, orange and grapefruit, which were all leading flavors for new liqueur launches in 2010.
The key benefit of citrus flavors is that they are not overly sweet, and appeal to both male and female consumers. Citrus flavors’ appeal as a refreshing flavor gives them a seasonal aspect – we have tracked the launch of limited edition liqueurs which are available only for the summer months. This includes the Luxardo
Limoncello, launched in the UK for summer 2010, and recommended to be chilled over ice cream, or enjoy in a summer iced tea.
Citrus flavors includes regional liqueur varieties that have gained global appeal, such as limoncello. One of the ways that manufacturers have attempted to differentiate in limoncellos is by emphasizing artisan production techniques. For example, the Ventura brand of limoncello in the US has made efforts to differentiate itself in the market by using tree-ripened, preservative-free fruits rich with lemon oils to “make a limoncello up to their exacting standards”.
Figure 25: Citrus flavored liqueurs have a strong global following
Source: Company information BUSINESS INSIGHTS
Growing: Spicy
Spicy flavors were one of the leading flavor types in 2010. The most popular variant, pepper, only featured in
1.6% of new liqueur launches in 2010, making it the 24th most common flavor in new product launches.
However, spicy is an emergent flavor trend and is increasingly being used in new liqueurs. It includes pepper, as well as chili and cloves. Between 2007 and 2010, the share of new product launches in liqueurs accounted for by spicy flavors doubled. Spicy liqueurs have grown in popularity due to the success of mixing spice and sweet flavors, both as limited edition winter flavors designed to warm up consumers from the cold, or as year round flavor enhancers that add interesting flavor notes to beverages.
Recent brands to promote their spicy flavoring include the Ganad Rebella liqueur, available in Belgium,
France, Hungary, Spain and Switzerland. This liqueur is claimed to have a fruity taste with a full, spicy finale on the palate, and is made from red and blackcurrant wines.
Manufacturers are also launching liqueurs that advertise specific spices. For example, having proved a successful flavor in other sweet food and beverage products such as chocolate, chili has moved into liqueurs adding a fiery note to sweet undertone flavors. Recently launched in Germany is the Deheck Likoer Sweet
Fire With Strawberry and Chili Flavor, while the Chili Rose Grape Liqueur, launched in the US and Canada, is a grape liqueur with a subtle flavor of both chili and rose.
Other interesting spicy flavors include pepper, which has featured in such recently launched brands as
Kozatska Rada Pepper Liquor in the Ukraine, and 5 Kapel Nastoyka Gorkaya, in honey and pepper flavor, in
Russia.
Figure 26: Spicy flavors add an interesting taste sensation to liqueurs
Source: Company information BUSINESS INSIGHTS
Falling: Sweet
Falling by 3.7 percentage points in the 2007 to 2010 period (see below), the sweet flavors saw the largest decline in use in new liqueur product launches. In case such as toffee and butterscotch some of the flavors .
Nevertheless, the sweet flavor types of cream and honey continue to be popular, featuring in the top 10 of new flavors in 2010. This highlights the strength of such cream liqueur brands as Baileys and honey-based liqueurs such as Drambuie, and the continued efforts of manufacturers to tempt their loyal consumer base with new editions and multi-flavor offerings (such as Bailey brand extensions in hazelnut, mint and coffee flavors).
Figure 27: Declining flavor categories for new product launches in liqueurs (percentage point change) 2007–10
-3.7% Sweet
-3.4% Soft Fruit
-2.8% Mint
-2.2% Chocolate
-1.9% Bitter
-1.2% Vanilla
-0.9% Vegetable
-0.3% Apple/pear
-4.0% -3.5% -3.0% -2.5% -2.0% -1.5% -1.0% -0.5% 0.0%
Source: Product Launch Analytics and Business Insights analysis BUSINESS INSIGHTS
Innovation trends
The following section offers an analysis of the current innovation trends that are impacting flavored liqueurs.
Stressing the heritage of flavors
One of the problems with developing new flavor combinations for liqueurs (as with any drink category) is that it is difficult to speculate whether the consumer will like them enough to become a long-term follower of the product. A potentially effective way of enhancing a product’s likelihood of success is to reintroduce flavor combinations that have historic relevance and a strong heritage. In this way the consumer is given reassurance that the flavors have a legacy harking back to the past, a particularly relevant aspect given the strong appeal nostalgia has for many consumers wanting to reminisce about their own lifetime or a previous generation.
A recent brand to have taken this route is King’s Ginger Liqueur, launched in the UK by Berry Bros & Rudd
Ltd. The product was said to be rediscovered by the company after more than hundred years and reintroduced on the UK market in 2010. Marketing for the product notes that: “the liqueur was first produced around 1903 by London wine merchants Berry Bros & Rudd Ltd. at the request of King Edward VII's doctor, concerned by His Majesty’s reckless habit of taking winter morning rides in his new open-top automobile.
Having concocted a full-strength alcohol base enriched with macerated ginger root and a hint of lemon oil,
Berry Bros appeared to have forgotten about it after King Edward’s death. However, having recently scoured their archives, they have relaunched this splendidly-named tonic.”
Following a similar path is Crème Yvette, a liqueur “staple” of the 1880s which has been resurrected by
Cooper Spirits. The product, whose flavor is described as dark berry fruits with delicate violet-petal essence, is currently on limited release in the US.
Figure 28: Emphasizing heritage for new flavors
King’s Crème Ginger Yvette Liqueur
Source: Company information BUSINESS INSIGHTS
Reformatting flavors in line with artisanal roots
A similar strategy to reintroducing heritage flavors is reformatting well known liqueur types to be more true to their historic origins. In this way, consumers are offered a more authentic flavoring, which manufacturers can publicize as being of key differentiation to other brands that exist in the sector. A recently launched brand to do this is Peach Street Distillers Peach Schnapps. Company spokesman Rory Donovan was critical of existing peach schnapps brands, stressing the authenticity of his brand’s flavoring: "Companies have come up with this contrived, fake aromatic peach flavor. It tastes nothing like peach, but the public has come to expect it. Now, when you give them something authentic, people are disappointed," (as quoted in the
Washington Post). Peach Street’s product in contrast is said to be distilled from real peaches, using tree- ripened fruit from the distillers’ state of Colorado.
Keeping ingredient mix a secret
An effective means of gaining consumer interest in a brand is to withhold information as to the exact nature of the recipe or ingredients. This retains a level of mystique in a brand which commands consumer respect
(and makes copycat drinks all the more difficult to create). Many well-established liqueur brands have employed this strategy, including Jägermeister, Drambuie and Benedictine, all of whom have undisclosed recipes.
A relatively recently introduced brand to undertake this strategy is St Germain Elderflower Liqueur, launched in the US in 2007. The brand is claimed to contain grape spirit, citrus flavoring and cane sugar, although the manufacturers keep the precise nature of its creation process a secret, therefore retaining a layer of mystique.
Figure 29: Keeping brand ingredients and processes a secret appeals to consumers
St Germain Elderflower Liqueur
Source: Company information BUSINESS INSIGHTS
Herbal liqueurs boost drinking experience
One of aspect of herbal-based liqueurs is that they do not necessarily have to taste that appealing. A prime example of this is Jägermeister, which has a taste which many users dislike. However, the ritual of downing a shot of this distinctive brand has gained cult status among many student. Therefore, it is often the marketing of a liqueur, and its contribution to the overall drinking experience, that is more important than its actual taste.
In 2010, Hi-Spirits launched the Fireball cinnamon-flavored whisky in the UK as a rival to Jägermeister. The brand is described as shirking traditional values of Scotch whiskies and attempts to appeal to spirits enthusiasts who choose variety over heritage. The brand is promoted as being ideal to drink in shots, like
Jägermeister, as a long drink with mixers, or combined with energy drinks. In this way, the beverage aims to rival Jägermeister as a drinking experience to be enjoyed by younger drinkers on a night out.
Nonetheless, other companies have promoted their new herbal liqueurs on their innovative taste profile rather than the overall drinking experience, aiming to gain the attention of more sophisticated older consumers. New launches include unusual flavors such as hibiscus, jasmine and wild fennel. Modern Spirits
Group has introduced both a hibiscus and jasmine flavored liqueur under the Fruit Lab Organic Liqueurs brand. Helping set them apart is their organic status. Meanwhile, the wild fennel ingredient was used in
Distilleria F.lli Caffo’s Finocchietto Caffo branded liqueur, recently launched in Italy.
Figure 30: New herbal flavors include hibiscus, jasmine and wild fennel
Finocchietto Fruit Lab Organic Caffo Wild Liqueurs Crism Fennel (hibiscus flavor) Infusion and Theia (jasmine flavor)
Source: Company information BUSINESS INSIGHTS
Liqueur flavors for celebrations
There is a natural link between liqueurs and annual celebrations, with creamy and fruity concoctions being particularly desirable as indulgences for birthdays, Christmas and other celebratory occasions. The
Aphrodope Elixir brand in Australia aims to capitalize on this with the creation of a product for Valentine’s
Day. The liqueur is said to be the first in the world to contain aphrodisiacal ingredients, mixing berry, fruit and herb flavors. While it is debatable whether the product does indeed impact the libido, it is a novel concept that could gain consumer appeal as a novelty product.
Figure 31: Aphrodope claims to contain aphrodisiac ingredients
Aphrodope Elixir
Source: Company information BUSINESS INSIGHTS
Using ethical ingredients
Another way in which liqueur manufacturers have sought differentiation with their competitors is to produce flavors that have strong environmental and or ethical credentials. For example, Thatcher’s Organic is a brand of US liqueurs which has been awarded USDA Organic certification. Flavorings include Cucumber,
Elderflower, Apple Spice Ginger, Pomegranate, Dark Chocolate and Blueberry. Founder Dave Racicot commented: “Thatcher's is truly unique for all your eco friendly, green events, bars, restaurants and the home for those who wish to provide their patrons or friends something original,” (company press release).
In addition, the Fairtrade Spirits Company has launched what it claims is the first fairtrade goji berry liqueur.
Available in various countries including the UK, Fair Fairtrade Goji Liqueur is marketed at green and health conscious consumers and capitalizes on goji berries’ success in other food and drinks sectors as an good- for-you antioxidant.
'Locally grown' is another feature that is important to many consumers with rising concerns over carbon footprint as well as a desire to maintain local jobs. The Ireland-based Boozeberries brand of liqueur promotes its use of locally grown blackcurrants and blueberries in its products. Barbara Hughes, company sales director, noted that using local produce was what made the brand special: “The blackcurrants and
blueberries are grown in Ireland – the blueberries are actually growing wild in the Wicklow Mountains, where they are known as bilberries and are slightly smaller than the North American blueberry,”. Also adding point of difference to the product is the fact that the berries are left in the bottle, therefore aiding the appearance of the liqueur, as well the flavor, and adding to the overall experience of drinking Boozeberries.
Figure 32: Ethically produced ingredients are a growing trend in liqueurs
Thatcher's Organic Fair Fairtrade Boozeberries Artisan Goji Liqueur Liqueurs
Source: Company information BUSINESS INSIGHTS
Conclusions
Liqueurs are emerging from an image of over sweet concoctions to make them more appealing to more adventurous palates. Flavors are a critical part of repositioning liqueurs to a younger demographic. Key observations of the sector include the following:
Spices are underused in liqueurs bbut can add a desirable flavor element to liqueurs, not just in winter
but year-round. In particular, spice and sweet flavor combinations are an interesting opportunity for
innovationb.
Nostalgia has been a strong trend through food and drink categories and it is no different in liqueurs.
Because of the high level of private label activity heritage provides a quick differentiator for liqueur
brands and a means to combat commodization of liqueurs.
Herbal liqueurs do not always appeal to consumers on a taste front but as part of an overall drink
experience package. As Sally Hogshead commented about Jägermeister: “Jäger doesn’t succeed
despite its horrific taste, but because of it ... an overall toxic experience is part of the brand promise.”
There is an existing niche for liqueurs that can be positioned as a challenge, an experience, or as a
punctuation point during a drinking session. However, this carries with it an inherent risk around
products overtly or implicitly targeted at binge drinkers.
Consumer appeal for greener, more sustainable products should not be underestimated. In particular,
the opportunity is similar to that in areas such as chocolate where an overt link is made between the
care and quality invested in the production of the ingredients and the taste of the finished product.
Chapter 6 Gin
Summary
Botanicals and floral were the strongest growing flavor categories from 2007 to 2010, while generic fruit
and exotic fruit were the flavor types seeing the highest falls.
Traditional flavors still have a strong in gin, and non-standard flavors have failed to take off as
consumers do not perceive them to complement the product’s traditional flavorings of juniper and
herbal/botanical infusions.
Lighter gins seen by manufacturers as key to attracting new consumers – especially lightening the
flavor profile with floral or less strong botanical flavors.
New production methods are being introduced to bring new flavors to gin, including the use of cold
distillation which enables fresh fruit to be used instead of dried fruit.
“Healthier” gin ingredients also bring an opportunity option of attracting health conscious consumers to
the sector. For example, one brand aims to exploit the appeal of the Mediterranean diet by using
ingredients grown in this region in its gin.
Introduction
Gin is a spirit flavored predominantly with juniper berries. It is available in several distinct styles, the most popular of which is London dry gin, which as well as containing juniper, uses citrus and spice flavorings such as lemon, anise and cinnamon.
Although there are fewer variations in flavorings in gin than in other alcohol categories (which is reflected in the number of flavor types in new product launches that are recorded here), the sector is experiencing a division, with modern interpretations of gin bringing new flavor concepts to the sector, while a predominant juniper flavoring is maintained among brands marketed towards traditionalists.
Flavor trends
Regional analysis
Europe accounted for the vast majority of gin launches in 2010, as shown in Table 15, and has been of increasing focus for new product development since 2007. Europe is the traditional homeland of gin, originating in Holland and the UK in the 17th and 18th centuries and continues to have a strong following here as a result. As colonists from Europe settled in Asia and North America, gin production moved into these regions and created a market that continues today, as is reflected in their buoyant launch shares. In contrast,
South & Central America and the Middle East & Africa have very small markets for gin, reflected in the fact that no launches were recorded here in the period surveyed.
Table 15: Regional share of gin launches (%), 2007–10
2007 2008 2009 2010 Percentage point change, 2007–10
Europe 67.4% 60.0%57.7% 73.8% 6.4% North America 19.6% 30.0% 19.2% 19.0% -0.5% Asia Pacific 13.0% 10.0% 23.1% 7.1% -5.9% Latin America 0.0% 0.0% 0.0% 0.0% 0.0% Middle East & Africa 0.0% 0.0% 0.0% 0.0% 0.0%
Source: Product Launch Analytics BUSINESS INSIGHTS
Segment analysis
Botanical, floral and nutmeg were the largest growing flavor types in gin launches from 2007 to 2010, as shown in Figure 33. Botanical was also the leading flavor type in 2010, which is not surprising given gin’s traditional formula of ingredients including botanicals such as cinnamon, coriander and fennel. In contrast, the use of generic and exotic fruit flavors has declined in new product development.
Figure 33: Leading flavor types (%) for new product launches in gin, 2007-10
Source: Product Launch Analytics and Business Insights analysis BUSINESS INSIGHTS
Breakdown of key flavor types
Botanical: Baobab, Basil, Cactus, Cinnamon, Coriander, Fennel, Herbal, Hibiscus, Rosemary,
Sarsaparilla,Thyme
Exotic fruit: Exotic, Mango, Pomegranate, Tropical
Floral: Elderflower, Floral, Lavender, Violet
Generic fruit: Forest fruit, Fruit
Nut: Nutmeg
Soft fruit: cherry, olive
Table 16: Leading flavor types in global gin launches (%), 2007–10
Flavor type 2007 2008 2009 2010 Percentage point change 2007–10
Botanicals 14.3% 12.5% 6.3% 27.8% 13.5% Citrus 19.0% 29.2%37.5% 22.2% 3.2% Berry 14.3% 25.0%12.5% 16.7% 2.4% Floral 4.8% 4.2%6.3% 11.1% 6.3% Nut 0.0% 0.0%0.0% 5.6% 5.6% Other 4.8% 4.2%0.0% 5.6% 0.8% Soft fruit 0.0% 0.0% 3.1% 5.6% 5.6% Spicy 9.5% 4.2%12.5% 5.6% -4.0%
Source: Product Launch Analytics and Business Insights analysis BUSINESS INSIGHTS
The top 20 flavors in gin
The table below presents a detailed picture of the top 20 flavors in gin. Overall, product launches have been relatively low, although it is notable that sloe gin has made a small comeback and also that the range of marketable flavors distillers include is widening – especially in terms of referencing more herbal flavors.
Table 17: Top 20 flavors in global gin launches, 2007-2010
Flavor 2007 2008 2009 2010 Elderflower 0.0% 0.0% 3.1% 11.1% Lime 4.8% 0.0% 3.1% 11.1% Sloe 0.0% 0.0% 3.1% 11.1% Basil 0.0% 0.0% 0.0% 5.6% Blackcurrant 0.0% 0.0% 0.0% 5.6% Cinnamon 0.0% 0.0% 0.0% 5.6% Citrus 9.5% 12.5% 6.3% 5.6% Hibiscus 0.0% 0.0% 0.0% 5.6% Lemon 0.0% 8.3% 9.4% 5.6% Nutmeg 0.0% 0.0% 0.0% 5.6% Olive 0.0% 0.0% 0.0% 5.6% Rosemary 0.0% 0.0% 0.0% 5.6% Rye 4.8% 0.0% 0.0% 5.6% Spicy 0.0% 4.2% 9.4% 5.6% Thyme 0.0% 0.0% 0.0% 5.6% Anise 4.8% 0.0% 0.0% 0.0% Apple 0.0% 4.2% 0.0% 0.0% Baobab 4.8% 0.0% 0.0% 0.0% Bitter 0.0% 0.0% 3.1% 0.0% Cactus 0.0% 0.0% 3.1% 0.0%
Note - because of the low number of product launches, there will be significant fluctuations year to year in results. These flavors represent the stated flavors, as claimed by the distillers – rather than an accurate representation of the full range of botanicals used in brands.
Source: Product Launch Analytics BUSINESS INSIGHTS
Growing: Botanicals
Botanicals, a category including the likes of basil, cinnamon and coriander, was the leading flavor type in
2010 gin new product launches and also the fastest growing over the 2007 to 2010 period. Gin products typically contain an array of botanicals, designed to complement the underlying juniper flavoring without dominating the taste profile completely. For example, the Blue Gin Dry Gin, recently launched in Europe, contains 27 botanicals sourced from all over the world. However, many of the new flavors, namely basil, cinnamon, hibiscus, rosemary and thyme, are not traditional.
Globally sourcing botanicals is becoming a common trait among new gin products, as manufacturers look to use the most premium botanicals for their brands. Brockmans Gin is quite specific in some of the botanicals it contains, such as the regional specific Bulgarian coriander, and juniper from Tuscany. The distiller describes the gin as non-traditional, commenting that its intention was to create a "fresh taste that really changed the perception of contemporary gin". More unusual botanicals are in the Sacred Gin product, launched in Spain and the Netherlands. It is distilled with frankincense, alongside other more common flavors of juniper berries, fresh cut orange, and lime and lemon combined with cardamom and angelica.
Figure 34: The arms race in gin for the most number of botanical flavors
Source: Company information BUSINESS INSIGHTS
Growing: Floral
Floral flavor notes are also a growing flavor in gin product launches. The category includes the most popular flavor of 2010 – elderflower (which featured in 11.1% of new gin launches) – as well as other floral flavors such as lavender and violet. Elderflower works well alongside gin’s underlying flavors, and is growing popularity; it featured in only 3.1% of new launches in 2009. Marketing for Gordon’s Gin noted, for example, that the “floral, muscat flavors of elderflower go incredibly well with the fine botanicals in Gordon's.”
Florals also offer a light, refreshing flavor note that consumers associate with seasonal consumption during the summer months. Hence, there have emerged summer seasonal gin varieties such as the Summer
Edition of Beefeater London Dry Gin with Elderflower, Blackcurrant & Hibiscus Flower.
Other notable recent floral gin launches include Darnley's View London Dry Gin, which is available in the US in an Elderflower Scented variant. The product is promoted as a premium produced, artisanal gin that is "a five times distilled small batch gin with elderflower and citrus." Each bottle is said to have a distinctive floral aroma and flavor, with subtle variations in flavor due to the small batch production. In addition, the G'Vine
Nouaison French Gin, available in the UK, comes in an unusual floral flavoring of grapevine flower, therefore providing differentiation to other floral gin offerings.
Figure 35: Floral notes add differentiation to gin brands
Source: Company information BUSINESS INSIGHTS
Growing: Nut
Nut flavors were the third largest growing claimed flavor type of the period, although it must be noted that this was in large part because no products were recorded in 2007. Two prestigious 2010 gin products to contain nutmeg were London Dry Gin in Winter Edition and the Brecon brand of Special Reserve Gin.
Given its association with the seasonal drink eggnog, nutmeg has connotations of winter and Christmas.
Pernod Ricard reflects this connection with the launch of the seasonal Beefeater Winter Edition London Dry
Gin, which contains nutmeg as well as cinnamon, orange peel and pine. Meanwhile, the Brecon Special
Reserve Gin is a gin that has been five times distilled with 10 aromatic herbs, including nutmeg, juniper berries, orange peel, stick cinnamon, licorice root, angelica root, Florence iris, coriander seeds and lemon peel.
Figure 36: Nutmeg can add a winter seasonal flavoring to gin
Source: Company information BUSINESS INSIGHTS
Falling: Generic fruit; exotic fruit
The largest falling flavor categories from 2007 to 2010 were generic fruit and exotic fruit, both of which fell by
9.5 percentage points over the period. With no launches featuring these flavor types being recorded in 2010, the fall is likely due to manufacturers experimenting with unusual flavor concepts in the earlier period, but consumers showing preferences for more overt herbal and botanical flavors instead, which impart a more traditional gin flavor concept.
Figure 37: Declining flavor categories for new product launches in gin (percentage point change) 2007–10
-9.5% Generic fruit
-9.5% Exotic fruit
-4.8% Vegetable
-4.8% Ginger
-4.8% Anise
-4.0% Spicy
-10% -9% -8% -7% -6% -5% -4% -3% -2% -1% 0%
Source: Product Launch Analytics and Business Insights analysis BUSINESS INSIGHTS
Innovation trends
The following section offers an analysis of the current innovation trends that are impacting flavored gin.
Bridging traditional with contemporary style
As gin has been produced for hundreds of years, consumers have come to expect it to have a specific flavor, namely being heavily influenced by juniper, while containing a traditional mix of other herbs, botanicals and spices. However, there are emerging gin brands that are adding modern ingredient twists to the traditional format, aiming to entice consumer curiosity without isolating long-term gin drinkers.
Such a format could be difficult to achieve successfully, but some commentators have reacted positively to the move. For example, Plymouth gin brand manager Simon Ford commented that it is perfectly possible for gin brands to successfully combine the traditional with modern, if carried out in the right way: "They just need to respect the history, understand that gin is a traditional product and that it has a specific type of flavor foundation."
The flavor history is, as ever, an important element of gin, and one which contemporary flavored brands need to respect in order to appeal to the gin connoisseur. Consumers want to know about the heritage of the brand, how the manufacturer has developed the ingredient formulation and how it integrates with the traditional flavor foundation of a gin product. Scottish distilled Hendrick’s Gin is an example of a contemporary gin that respects the heritage of the gin sector. The brand is marketed as a “peculiar gin” that contains non-traditional flavor elements of cucumber and rose, alongside a traditional juniper taste. Simon
Ford commented: "I love that [Hendricks] is playing with the cucumber and rose elements.” This is an opinion shared by H. Joseph Ehrmann, a bar manager in San Francisco, noting that this gin “has a nice juniper flavor, yet it introduced two other flavors [cucumber and rose] that had not been in a gin before and work very well in a wide variety of cocktails. They were one of the early adopters of the New Western philosophy, and they did it right from the start," (Bev-AL Communications).
'New Western' is a term often used to describe the new breed of gin brands. Cocktail consultant Jacques
Bezuidenhout explains the style as "adding another flavor component that may offer something more
appealing to the consumer. They add something new and interesting that may attract the new consumer who may not want a heavy juniper gin," (Bev-AL Communications).
Other brands can learn from Hendrick’s Gin success, and the New Western philosophy, and gain the respect from gin commentators for bringing gin up-to-date without ignoring its important sense of history.
Lighter gins encourage new drinkers to the sector
A key strategy used by gin manufacturers to bring their brands up-to-date is by adding lighter gins to their portfolios. They are aiming to open up the gin sector to new drinkers who may have otherwise considered the drink to be too strong in flavor for them. Lighter gins use a variety of ingredients to gain a more subtle flavoring, including cucumber, pear, vanilla and cloves, as well as other fruit flavorings such as apple, blackcurrant and bitter orange. Such gins can offer an entry into the category for novice gin drinkers, a viewpoint mixologist Toby Maloney of Alchemy Consulting in New York City, acknowledges: “Their idea of gin is like eating a Christmas tree sort of thing. Lighter gins can be the gateway to bigger gin flavor.”
Bombay Sapphire is cited as one of the first gin brands to appeal to the novice drinker through more subtle flavorings. Mixologist Tony Abou-Ganim noted that: "The flavor profile was a new botanical mix at the time - a softer, more feminine flavor,” (Bev-AL Communications). Other more recently launched subtly flavored brands include Catoctin Creek Organic Watershed Gin (which is said to contain subtle citrus and cinnamon notes and essences of fresh cut hay), and the elderflower scented Darnley's View London Dry Gin.
Nonetheless, subtler flavored gins may soon be replaced by a growing emergence of bolder flavored variants. Influenced by more sophisticated and impactful flavorings used in other alcoholic drinks categories, consumers will become willing to embrace more daring flavors. One recently launched brand to already market its brash flavors is Foxdenton Dry London Gin, which is promoted as being, “bold and fresh, full- flavored, big on juniper and citrus with floral notes." The key aim is to gain consumer trust in the bolder flavors, and to flatter their temperaments by making them believe they are educated enough to fully appreciate a bolder flavored gin.
Using fresh fruit from cold distillation
One of the ways in which gin makers are driving flavor differentiation in their brands is through changing the distillation process. One company which has done this is Oxley Spirits, which uses a cold distillation process for its Oxley Classic English Dry Gin brand. Available in the UK and US, it is claimed as the first gin produced through a cold distillation method, in which the spirit is depressurized and distillation occurs at minus five degrees Celsius. This enables the brand to use fresh fruit, consisting of grapefruit, orange and lemon, as flavoring, instead of fruit that is heat dried. The use of fresh fruit as an ingredient is something that could establish a noteworthy point-of-difference for this entry, and incite others to attempt similar methods to impart a premium element to their brands.
Figure 38: Oxley Classic English Dry Gin uses a unique cold distillation method
Source: Company information BUSINESS INSIGHTS
The healthy Mediterranean diet
Another interesting niche is the promotion of healthier ingredients in gin can also be a means of attracting consumers to a brand. For example, Global Premium Brands has recently launched a new Mediterranean
Gin on the market in Spain under the Gin Mare brand name. It is touted as the first Mediterranean gin to be produced on the market and combines an innovative range of healthy Mediterranean flavorings including arbequina olive, thyme, basil and rosemary. The healthy nature of the Mediterranean diet has often been used to promote brands in the food sector, and this new brand is aiming to capitalize on this and extend its healthy halo to the gin sector.
Figure 39: Gin Mare capitalizes on the image of the healthy Mediterranean diet
Source: Company information BUSINESS INSIGHTS
Conclusions
Heritage still reigns strongly in gin, regardless of innovation in flavor. In this respect, where distillers are introducing new flavors into gin, an underleveraged point of difference is the provenance, quality and sustainability of the ingredients themselves.
However, while consumers remain reasonably traditional – with the exception of sloe gin, there is little innovation in any kind of flavored gin in the way that exists in, for example, vodka – there is still capacity to innovate. But many distillers have taken the “arms race” approach by introducing greater numbers of botanical flavors into products.
An alternative approach is to help consumers better understand different types of gin by positioning them better. For example, one of the key tensions in the gin market is differentiation between subtler and stronger flavors, and between botanical and more floral flavors. But distillers have been poor at guiding consumers by brand to help them navigate through different flavor types. Most consumers can poorly distinguish between the impact that certain botanicals will have either on the flavor, or on the mixed drink or cocktail they want to drink.
Chapter 7 Rum
Summary
In 2010, exotic fruit, citrus, spicy and sweet were the leading flavor types in new rum launches, while
the largest growing flavor types of the 2007-2010 period were citrus, spicy, anise and botanical.
The rum sector is becoming increasingly consolidated, with a few brands accounting for a high
proportion of the market. One of the ways in which smaller producers are hitting back is to band
together and produce blended offerings that offer something different to the competition.
There are small rum producers in the US that are attracting the attention of rum commentators by
offering unique tasting rums to rival their larger competitors. These players are attempting to bring rum
production back to its roots in the US through micro-distilling.
Larger rum producers are aiming to capitalize on the resurgent interest in craft rums by releasing rums
that have ultra-premium characteristics and an appealing production story.
Introduction
Rum is made from sugarcane by-products such as molasses and sugarcane juice by a process of fermentation and distillation. The distillate, a clear liquid, is then usually aged in oak and other barrels. Most associated with the Caribbean islands, rum is also produced around the world with production methods depending on the location. As a result the drink can vary in taste.
Rum is defined in different ways around the world, but for the purpose of this report it will be categorized as light and dark rum.
Light Rum: Spirit made from sugar cane with no coloring additives (e.g. Bacardi, Havana Club).
Dark Rum: Spirit made from sugar cane, darkened either by the addition of caramel or by maturation in
oak containers (e.g. Captain Morgan, Navy Rum).
In contrast to other alcoholic drinks, rum is undergoing little innovation, with few new rum blends emerging.
This is reflected in the relatively few flavor types recorded in this report in relation to new product launches
(which in turn means that the data does not easily trend to any discernible pattern). In fact, the number of rum specialists is reducing as small island producers consolidate their operations in order to operate more efficiently. This means that a relatively limited number of brands dominate the market, namely Bacardi,
Diageo’s Captain Morgan and Pernod Ricard’s Havana Club. Between them they account for around a third of sales. While these main producers are attempting to boost their profiles by introducing new rum types, there are also niche producers fighting back with innovative flavor offerings and rums that have a distinctive flavor of their own.
Flavor trends
Regional analysis
Europe has seen the majority of new launches in 2010, accounting for just under half of all new product introductions recorded. While Europe has been a hotspot for rum launches for some time, Asia Pacific is emerging as a popular area for the drink, boosted by increasing consumer interest in the product. The Asia
Pacific region's share of new product launches increased by 19.6% percentage points in 2010 over 2007. In contrast, launches in North America have been on the decline, with a falling share of NPD in 2010.
Table 18: Regional share of rum new product launches (%), 2007-10
2007 2008 2009 2010 Percentage point change, 2007-10 Europe 32.7% 51.1% 46.9% 46.8% 14.1% Asia Pacific 1.9% 2.2% 5.3% 21.5% 19.6% North America 57.0% 42.4% 40.7% 19.0% -38.0% Latin America 6.5% 4.3% 4.4% 12.7% 6.1% Middle East & Africa 1.9% 0.0% 2.7% 0.0% -1.9%
Source: Product Launch Analytics BUSINESS INSIGHTS
Segment analysis
In 2010, exotic fruit, citrus, spicy and sweet were the leading flavor types in new rum launches (see Table
19). In terms of the largest growing flavor types of the 2007-2010 period, these were citrus, spicy, anise and botanical.
Table 19: Leading flavor types in global rum launches (%), 2007–10
Flavor type 2007 2008 2009 2010 Percentage point change 2007–10
Exotic fruit 26.1% 23.3% 23.8% 21.9% -4.2% Citrus 6.5% 20.0%21.4% 15.6% 9.1% Spicy 8.7% 13.3%0.0% 15.6% 6.9% Sweet 26.1% 20.0%19.0% 15.6% -10.5% Anise 0.0% 0.0%0.0% 6.3% 6.3% Botanicals 0.0% 0.0% 0.0% 6.3% 6.3%
Source: Product Launch Analytics and Business Insights analysis BUSINESS INSIGHTS
Breakdown of key flavor types
Anise: Anise, Star Anise
Botanical: Cinnamon, Clove
Citrus: Orange, Blood Orange, Citrus, Key Lime, Lime, Lemon, Melon, Pink Grapefruit, Tangerine
Spicy: Chili, Cumin, Spicy
Sweet: Brown Sugar, Butterscotch, Caramel, Honey, Maple, Molasses, Sugarcane, Sweet, Toffee, Vanilla
Figure 40: Leading flavor types (%) for new product launches in rum, 2007–10
Source: Product Launch Analytics and Business Insights analysis BUSINESS INSIGHTS
The top 20 flavors in rum
The table below presents a detailed picture of the top 20 flavors in rum. Overall, flavor innovation is extremely low – a function of a small number of high market share brands and a strong tradition of heritage in rum brand marketing.
Table 20: Top 20 flavors in global rum launches, 2007-2010
Flavor 2007 2008 2009 2010 Coconut 2.2% 6.7% 4.8% 12.5% Spicy 8.7% 10.0% 0.0% 12.5% Vanilla 8.7% 10.0% 7.1% 9.4% Lemon 2.2% 6.7% 2.4% 6.3% Orange 0.0% 3.3% 2.4% 6.3% Anise 0.0% 0.0% 0.0% 3.1% Banana 6.5% 10.0% 0.0% 3.1% Cherry 0.0% 0.0% 2.4% 3.1% Cinnamon 0.0% 0.0% 0.0% 3.1% Citrus 4.3% 3.3% 2.4% 3.1% Clove 0.0% 0.0% 0.0% 3.1% Cumin 0.0% 0.0% 0.0% 3.1% Fruit 6.5% 0.0% 2.4% 3.1% Ginger 0.0% 0.0% 0.0% 3.1% Honey 4.3% 0.0% 0.0% 3.1% Horchata 0.0% 0.0% 0.0% 3.1% Mango 2.2% 0.0% 2.4% 3.1% Nutmeg 0.0% 0.0% 0.0% 3.1% Pineapple 4.3% 0.0% 2.4% 3.1% Raisin 0.0% 3.3% 0.0% 3.1%
Note - because of the low number of product launches, there will be significant fluctuations year to year in results. These flavors represent the stated flavors, as claimed by the distillers.
Source: Product Launch Analytics BUSINESS INSIGHTS
Growing: Citrus
Citrus grew 9.1% from 2007 to 2010 and was the strongest growing rum flavor type of the period. Leading flavors within this flavor type are lemon and orange, which both featured in the top ten for rum flavors in
2010, each accounting for 6.3% of new rum launches.
The popularity of citrus flavored drinks generally (the trend is notable in areas as diverse as beer and gin), particularly in the summer, has seen citrus-flavored rum become more popular for product launches. In addition, citrus flavors have been added to rum brands as a result of the popularity of citrus flavored rum cocktails in bars and restaurants.
Major brands have launched their own versions of citrus rum, such as Bacardi O, consisting of Bacardi rum with orange. The beverage is described as having orange aromas followed by “wonderful citrus flavors”. In addition, Pernod Ricard’s Seagram’s Smooth Brazilian Rum in citrus flavor is described as a lighter spirit with citric, lemon notes, which capitalizes on the appeal of Brazil as having “exotic, mysterious qualities”, (see
Figure 41). The lighter notes citrus flavors bring to rum is designed to appeal to consumers new to the sector as well as those willing to experiment with less intense rum flavors.
Figure 41: Citrus adds a tangy note to rum
Source: Product Launch Analytics BUSINESS INSIGHTS
Growing: Spicy
Spicy flavors grew by 6.9 percentage points from 2007 to 2010, making it the second leading flavor type of the period, although spiced rums have been in existence for a long time. Consisting of flavors such as chili and cumin, the flavor type offers an exotic and intense element to rum’s traditional molasses flavorings. The renewed interest in spiced rums can be traced to a more general trend towards sweet/spicy combinations – for example in chocolate. Two recent launches of spicy rum include products sold by Absacker (Germany) and Appleton Estate (Jamaica). Absacker has launched Absacker Refined Rum in Austria, Belgium,
Germany, Switzerland and the Netherlands. It is blended with cumin, lemon, anise and herbs and is marketed as "Strong & Sexy", a slogan that denotes the intense flavorings brought to the brand by its spicy mix.
Appleton Estate Limited Edition 30 Year Old Jamaica Rum is described as a rare blend of several rums and to feature a bright and shiny color with a coppery hue. Available in the US, it is said to have spice notes alongside flavors of baked pear, maple, orange peel, ginger and vanilla. Marketing for the product states that its “subtle oak character is wrapped with delicate spices and vanilla”.
Figure 42: Spicy flavors offer an exotic, intense flavor element to rum
Source: Company information BUSINESS INSIGHTS
Growing: Anise; botanicals
Joint third leading flavor types of the period were anise and botanicals (which features clove and cinnamon flavorings). As with spicy flavors, these flavors add intensity to the rum, and are included in the Blackbeard and Elements 8 Barrel brands shown in Figure 43.
Figure 43: Anise and botanical flavor types have grown in popularity in rum
Source: Company information BUSINESS INSIGHTS
Falling: Sweet
Sweet flavor types fell the most in the period, featuring in fewer (by 10.5% percentage points) rum new product launches in 2010 than in 2007. Consisting of flavors such as brown sugar, butterscotch, caramel and honey, the sweet flavores have become less popular as consumers are instead demanding either tangy, light flavors or more intense spicy notes. Distillers are therefore responding with new launches that reflect these changing tastes. However, one flavor in this group is performing well, namely vanilla, which was third most popular rum flavor in 2010 and featured in 9.4% of new launches in this year.
Figure 44: Declining flavor categories for new product launches in rum (percentage point change), 2007–10
-10.5% Sweet
-6.5% Berry
-4.3% Chocolate
-4.2% Exotic fruit
-3.4% Nut
-3.4% Generic fruit
-2.2% Dairy
-2.2% Cocktail
-12% -10% -8% -6% -4% -2% 0%
Source: Product Launch Analytics BUSINESS INSIGHTS
Innovation trends
The following section offers an analysis of the current innovation trends that are impacting flavored rum.
Combining rums from multiple islands
The rum sector is becoming increasingly consolidated, with a few brands accounting for a large portion of the market. One of the ways in which smaller producers are hitting back is to collaborate and produce blended rums from multiple islands. Banks Five Island Rum, for example, is claimed to be the first rum to incorporate spirits from different countries. It is made using rum from 20 producers from five different areas (Trinidad,
Jamaica, Barbados, Java and Guyana) which is then blended in Europe. Arnaud de Trabuc, master blender behind the brand, sells the final product as a premium white rum with a unique offering. De Trabuc commented that, "The premium white rum market is nonexistent," highlighting his belief that by making a multi-country rum offering, his brand has achieved a unique point of difference with a premium style of white rum. Such an offering could attract consumers by having a unique taste profile and story to rival that of existing big brands on the market.
Figure 45: Banks Five Island Rum incorporates rum from different countries
Source: Company information BUSINESS INSIGHTS
Going back to American roots
Some small rum producers in the US are beginning to offer unique tasting rums to rival their larger competitors. These distillers are attempting to bring rum production back to its roots in the US through micro- distilling, seeking to emulate the success of craft brewers and microbreweries.
John Couchot, who is master distiller at the small batch spirit producer Rogue Spirits, commented: “It's great to see American rum come in to it own and stepping away from the drinks like Mai Tai and the old rum and coke. People have found though the microdistilling movement that rum is a rich and wonderful drink that can stand up to any bourbon or scotch on its own. I welcome rum back into the American glass with open arms”,
(as quoted in the Examiner).
Many of these microdistillers aim to appeal to consumers’ sense of American patriotism, producing an old style of rum that mimics the flavors of the past and markets a sense of nostalgia.
Big brand offers own take on craft rum
Larger rum producers are also aiming to capitalize on the resurgent interest in craft rums by releasing rums that have ultra-premium characteristics and more sense of heritage, provenance and exclusivity. Bacardi, for example, launched the Bacardi Reserva Limitada in the US in 2010, a limited rum spirit previously only available in Puerto Rico, the Cayman Islands, Aruba and the Bahamas. Marketed as the “Founder’s Blend”, the makers aim to heighten interest in the brand by noting that it was originally created as a personal liquor for members of the Bacardi family. Each Bacardi Reserva Limitada bottle is numbered and hand-sealed with a cork, adding to its sense of distinction. The brand taps into a wider food and drinks trend for inimitable products, which can be seen as a consumer reaction against the sameness created by big brands taking increasing shares of food and drink sectors.
Figure 46: Bacardi Reserva Limitada presents a premium offering from a major brand
Source: Company information BUSINESS INSIGHTS
Conclusions
Flavor innovation is less visible in rum than in other alcoholic sectors. Rum brands are heavily consolidated and play heavily on heritage, which acts as a brake on innovation. There is, nonetheless, some capacity for more flavor innovation in rum, but consumers need to be educated on the benefits of individual flavor notes.
At present, premiumization efforts in rum are largely focused on more exclusive, higher quality production to take rum more in line with whisk(e)y.
One obvious area of opportunity is flavored white rum: at present many brands simply go down the route of
“Caribbean” fruit flavors – coconut, banana, pineapple etc. As a result, flavored white rums are hard to position as more sophisticated or premium. Either revisiting the quality of the flavor (for example, the provenance of the fruit) or moving away from stereotypical Caribbean cocktail flavors would mark an important change.
Chapter 8 Conclusions
There are many interlinked flavor trends that impact all of the six alcoholic categories analyzed in this report.
These involve not just the flavors themselves (although certain flavors such as citrus are popular in many categories), but the overriding trends that influence the release of these flavors within all of these categories.
By understanding these crossover trends, manufacturers, brewers and distillers can learn more about what flavors will work for their brands.
The following have been identified as key crossover trends that impact flavors in alcoholic drinks:
Flavors imparting a sense of “better for you”: Botanicals and fruits have long been used in drinks to add
flavor notes, but increasingly ingredients such as cranberry are being used because they give a sense
of healthiness as well. This is a subtle way for manufacturers to address the health trend. Using, for
example, cranberry or açai in a beverage can therefore present the consumer with a seemingly
healthier version of the original beverage type, even if it does not specifically state what that health
benefit is, offering on trend advantage over the competition.
Trend migration: Flavor trends are dynamic, and move frequently between east and west. For example,
ginger, is becoming more popular again in alcoholic drinks on the back of an Eastern influence and its
importance in Asian cuisine. Flavored rums and gins are gaining appeal in the east as a result of the
increasing influence of Western culture.
Flavors are jumping categories: Manufacturers are taking inspiration from flavor successes in other
categories for their own beverage extensions. This is a well trodden and successful means to gain
consumer interest in new flavors, leaning heavily on consumer knowledge of the flavor type and
gambling that it will succeed in their own drinks category. Examples include vodka flavors crossing over
into gin and rum sectors, such as citrus and coconut variants. Such crossovers acknowledge that
regular consumers of one type of beverage probably also frequently drink other alcoholic beverages
and will desire similarly flavored offerings.
Flavor specificity as premiumization: being highly specific about the origin of the flavor (the type of fruit,
or the provenance of the ingredient) is a key means for brand owners to improve the premium
credentials of brands. At the same time, it is noticeable how brewers and distillers are increasing their
emphasis on the variety of flavors and flavor notes discernible in a product – borrowing techniques from
the wine and whisky sectors.
Tension between more and less flavors: increasingly, there is a tension between pure, unflavored or
unadulterated brands and brands which make a real play on the sheer number of flavors and
ingredients in their product. In both cases, this is being pushed to the point of overemphasis – either on
how pure the product really is, or as an “arms race” where brand owners compete for who has the most
complexity in their product. By contrast, there is still a real opportunity to help consumers actually
understand better the relationship between ingredients and their experience, and helping them to
understand different types of styles of product – in particular this is the case with gin.
Key motivations for accepting flavor innovation
The main barrier to consumer acceptance of new flavors can be seen to be conservative tastes. Certain consumers have come to expect a certain beverage type to taste a certain way and are unwilling to change this viewpoint. However, there are a growing number of consumers who are more open to flavor innovation.
There are a handful of key motivating factors to explain consumer acceptance for accepting flavor innovation:
Desire for more unique flavorings created by small batch producers, microbreweries and artisanal
brands.
Consumers’ broadening palate and growing education on drink flavorings.
Willingness and enthusiasm to experiment with new flavor types, flavor mixes or bold flavors.
More exotic drinks ingredients entering mainstream, becoming accepted in many categories by
consumers.
The Long-term Loyalist, Category Novice and Experimenter
It is important to understand what influences consumers in regards to flavor choices. Figure 47 categorizes consumers into three distinct groups, each with differing demands. These are the Long-term Loyalist,
Category Novice and Experimenter.
The Long-term Loyalist has traditional tastes and so will be influenced by flavors from the past that have a well established pedigree. In contrast, the Category Novice has less concern with authenticity and is more likely to demand subtle flavorings that ease entry into the category. Finally, the Experimenter is enthusiastic about new flavorings and what these can bring to the category and is more willing to be educated into the possibilities of different flavor mixes.
Of course, there is crossover between consumer types, with no one person displaying the characteristics of wholly one category. Importantly, consumer tastes in flavors can change depending on their mood, what time of day or night it is, or on the season. For example, a person may desire a spicy drink in winter, but a citrus based one in summer to compliment the weather. Nevertheless, by understanding these consumer groups, manufacturers can better align their flavor innovations so that they can appeal to the widest consumer group possible, without alienating significant proportions of society.
Figure 47: Consumers can be categorized into three types with differing flavor demands
Flavor trends that influence key consumer types
Category Novice Longterm Loyalist Subtle flavors Tradition Freshness Nostalgia Light Authenticity Easygoing Intensity Novel category flavors Sophistication Healthy Familiarity
Experimenter Unusual flavor mixes Novel ingredient sourcing New production methods Savory flavor enthusiast Education via bar mixologists Drinking experience over flavor taste profile
Source: Business Insights BUSINESS INSIGHTS
Appendix
Methodology
Secondary research
This report used a variety of secondary resources in which to develop a comprehensive examination of recent innovative product launches in Japan. The main resources used were as follows:
Product Launch Analytics (www.productscan.com)
Additional secondary research from company, trade, editorial and academic sources
Glossary/Abbreviations
ABV: Alcohol by volume
NPD: New product development
117
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