The definiTive ranking of The world's million-case spiriTs brands 2013 millionaireThe s’ The millionaires’ May 2013 drinksint.com 3 Land of thE giantS he Millionaires’ Club 2013 concludes a story that has been unfolding for years – if not right before our eyes then not much beyond their periphery. The story that Scotland no longer Tmakes the world’s best-selling whisky; that the biggest brandies and gins don’t come from France, the UK, or the US but from the Philippines and India; that Bacardi – so long the transcendent spirit – is being overrun in the confines of its own category. The behemoth brands of McDowell’s No.1 whisky, Emperador brandy, Ginebra San Miguel gin and Tanduay rum must peer down at the competition and contents wonder what all the fuss is about. Perhaps they watch LEadEr rUM & CaChaça with amusement as western brand owners obsess Hamish Smith looks upwards 3 Latin America’s big two 27 about puny volumes and are forced to prefix the word BaCK STORY BaijiU ‘premium’ to any world ranking. Intellima’s market overview Nine of China’s best A commanding 12 of the top 15 million-case spirits in 5 28 the 2013 list are what are often dismissed as ‘domestic fULL LiSting SojU & ShoChU The brands from 1-176 South Korea and Japan’s tipples brands’. But let’s call them regional – many are crossing 8 29 borders and, if their rapidly amassed sales are anything faStESt growing othEr CatEgoriES to go by, ambition is also not in short supply. The movers and losers 12 Gin, liqueurs, tequila et al 30 Drinks is a value game, some say, and in many ways VodKa thE Major PLayErS it is. But to achieve mass volumes, a brand has to have The most global of categories 15 Parents of Millionaire brands 32 successfully scaled production and fully extended the whiSKiES thE Big intErViEw tendrils of its distribution. In geographic expanses of the Scotch, American, Indian & Irish Building brands with Synergy likes of China, Brazil and India, this is no mean feat. 20 34 CognaC & Brandy onES to watCh And, no matter their price points, the aforementioned The small, medium and massive A look into the future – and the likes of Jinro soju and Red Star baijiu – are 25 37 feverishly popular. So as society around these brands enriches, why should they not scale the value charts too? aBoUt intELLiMa The west is not the centre of the universe. From what Intellima is a market research and strategy consultancy focused on we’ve seen lately, it’s not even the centre of the drinks the global beverage, food and hospitality business. Its team comprises experienced world. The clamour for new growth has taken global quantitative and qualitative research experts. Recent projects include spirits brand brands from barren homelands to fertile plains. This development, tracking projects about speciality foods, and a large consumer behaviour is the land of giants – and their market study which has been published as a report entitled Trends in Alcoholic Drinks 2013, footing is solid and deep-routed. They available for purchase via the Intellima website (address below). will be hard to dislodge; their over-sized Intellima was started as a sister business to Wine Intelligence in 2012 as a way of shoes even harder to fill. applying techniques and experience from the wine sector into adjacent, similar business Hamish Smith sectors. For more information about Intellima, and its research philosophy, please visit Supplement Editor intellima.co.uk or contact [email protected] or [email protected]. Supplement Editor Production Editor Copy Contributor Commercial Manager Hamish Smith Jaq Bayles Nigel Huddleston Roger Betríu +44 (0)1293 590045 +44 (0)1293 590048 nigel.huddleston@virginmedia. +44 (0)1293 590043 [email protected] [email protected] com [email protected] Managing Editor art Editor Publisher Senior account Manager Christian Davis Amber Stoddart Justin Smith Carmen Poel Francesch +44 (0)1293 590047 +44 (0)7876 350166 +44 (0)1293 590041 +44 (0)1293 590042 [email protected] [email protected] [email protected] [email protected] Agile Media, Zurich House, East Park, Crawley, West Sussex RH10 6AS, UK Tel: +44 (0)1293 590040 The millionaires’ May 2013 drinksint.com 5 Intellima tells us how new brands are penetrating the annual who’s who of spirits Back Story he Millionaires’ Club is domestic brands – means the definitions Emperador brandy from the Philippines Drinks International’s are starting to blur. As in many other recording another year of phenomenal exclusive hang-out industries, the spirits world is flattening The ratio growth, up 54% to overtake both for the biggest names and becoming more integrated. ❝ Diageo’s Smirnoff and Lotte Liquor, in world spirits. The data compiled shows that only one of dropouts Korea’s second-biggest soju. TTraditionally, they tend to come in two of the top 10 spirits brands is in decline, to newcomers The world’s biggest gin is next on the types: the heavyweights on their own and even that – Pirassununga 51 cachaça list, and it’s another Philippines brand – heavily-populated patches; and the agile, – is only 1% off the pace. is relatively Ginebra San Miguel a 23.8 million-case global brands which flex their muscles in The pursuit of growth by the major even brand that outsells Gordon’s by a factor multiple markets. What they all have in western global players has focused on the ❞ of more than six to one. common is the only entry qualification BRIC nations and the emerging markets The dominance of domestic spirits in needed to get into The Millionaires’ of Asia and Africa, frequently resulting the Philippines market is underlined by Club – annual global sales of more than in a fascinating tussle for supremacy Tanduay Distillers’ Tanduay rum in the 1 million 9-litre cases. between their brands and dominant local top 10 as well. This year’s membership has seen a spirits: global marketing expertise versus While many global players’ strategies fall in numbers from 180 to 176, as local market knowledge and distribution. focus on premiumisation, Tanduay and vodka powerhouse CEDC was delayed Of the 176 brands in the club, 17 other local brands have successfully in reporting its results. In the interests of are Indian whisky brands and 10 are exploited the mainstream in their home transparency and completeness we have products local to the Japanese market. markets and regional pockets of strength listed the Polish group’s titles, along with Leading brands in South Korean soju, within them. a few other known Millionaire brands in Chinese baijiu and Philippines rum, Tanduay is a national brand but is a separate Nondisclosure List. That aside, gin and brandy all scored significant targeting the northern metropolitan the ratio of dropouts to newcomers is percentage gains for brands of already centres of Manila and Luzon as it looks relatively even. immense scale. to build sales further. This year more than any other, there Hite-Jinro’s Jinro soju again occupies Big local players are also targeting is a clear difference between the regional the top spot overall in world spirits, specific consumer groups with hip, champions and the global stars. However, with sales more than double those of the westernised young people often high on the growing importance of developing number two spirit brand. their shopping lists. Ginebra San Miguel markets to international organisations But the number two position has is positioning gin as a young person’s – some of which have acquired strong changed, with Alliance Global Group’s drink with marketing around page 6 The 6 May 2013 drinksint.com millionaires’ rULES oF ENGaGEMENt music festivals and nightclub parties, Collecting accurate data on 176 while many western gins still focus on Millionaires’ Club members is a serious the heritage, tradition and retro-chic that business. For the past three months appeals to a more mature audience. Intellima researchers have compiled Local spirits producers are also data from public company reports, segmenting their offering to appeal to stock exchange submissions, and a range of consumers. Tanduay has responses to requests. identified a role for lighter, cheaper spirits Where information from the in response to demand from younger company itself is incomplete or not consumers and a new tax regime. Its T5 available, we have deferred to reliable and San Miguel’s GSM Blue Light are secondary resources, such as company both lighter spirit brands making a pitch press releases, interviews in journals in this arena. or magazines where company officers The local clout of such producers leaves disclosed sales data. few places for the major global players at Brands have been classified as either the top table in the Millionaires’ Club list. Global or Regional. Regional brands The top 10 brands show no surprises, are confined to a limited geographic with Diageo represented by Smirnoff and area with 80% or more of volumes Johnnie Walker, and Bacardi clinging on selling in one region. To qualify as to its status as the world’s leading rum – Global a brand must sell in at least two but only just, with Tanduay’s annual sales regions with no more than 80% in any now just 200,000 cases short. one region. Brand classifications can Between places 10 and 20 in the overall change at DI or Intellima’s discretion. spirits chart, whisky is the battleground Growth percentages were calculated and, if medium-term trends continue, it from actual volume data, not the rounded volume figures published. may not be too long before some of the Dashes indicate that data was not Indian brands listed push into the top available or the brand didn’t exist.