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02.2008

Massachusetts Beverage Business

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Article By: Aimsel Ponti

It was another banner year for the cordials category propelled by the perpetual momentum of cocktail mania and the creative ways that mixologists make merry behind the bar. And once again, Massachusetts grabbed the top spot for retail spending for cordials and liqueurs to the tune of 333 million dollars and landed in the number eight spot for consumption.

According to figures from the 2OO7 Adams Handbook, there was an overall growth in 2OO6 of 3.2% for the category with imports claiming the lion's share. Leading the pack for domestics were the DeKuyper Cordials, Southern Comfort and Hiram Walker Cordials.

As for imports, Jagermeister again reigned supreme with a staggering growth of 19.1%. Baileys also faired well with a 4.2% increase. It will be interesting to see how Kahlua shakes things up next year given their launch of two new flavors along with ramped up promotional campaigns.

We'll start at the top with DeKuyper Cordials as they led the pack with an increase of 2.8%. Their "Bump It Up" program combined with the launch of three new tropical flavors - as well as pomegranate and red apple liqueurs - were certainly contributing factors. "I think that we've truly started innovating again and launching new products on a regular basis," says Amy Underwood, Senior Brand Manager at Beam Global Spirits. "We are out there with relevant messages that make sense and communicate how to use our products to consumers and bartenders. It's really exciting to see the needle move. We don't have flavors for the sake of having flavors, there really is a legitimate market behind every flavor we have." Looking ahead, Underwood says that in addition to launching some new flavors in 'O8, DeKuyper is also partnering with the Flair Bartender Association (FBA). "We're going to become a major sponsor and be working with them throughout the year. One of the competitions is going to be called the DeKuyper Blue Blazer Challenge, scheduled for May in Las Vegas," states Underwood. "It's like a dance routine except it's with mixing cocktails. It's high energy and creativity and fun . . . and believe me, these people express themselves in their flair bartending." Move over, Tom Cruise!

Although the Starbucks Liqueurs line saw a decline in growth this past year, Stacey Simmons, Senior Brand Manager for Starbucks at Beam Global Spirits isn't concerned. "In general with most new brands, you'll see a bit of a dip after the initial launch. That's to be expected. But we still feel extremely good about the way business is going. We're very excited about what we accomplished not only in year one, but in years two and three as well. Some notable accolades were bestowed upon Starbucks Liqueurs from the Beverage Tasting Institute (BTI). They received awards for the Best Tasting Coffee Liqueur and the Best Tasting Cream Liqueur. "We're very happy because BTI is very well respected in the spirits category in general. They're an independent professional taste testing panel," explains Simmons. "It helped to really reinforce the preiumness of our product."

As much as Starbucks is synonymous with coffee, such is certainly the case with Godiva's link to chocolate. Senior Brand Manager for Godiva at Diageo, Jennifer Long, explains how consumers are seeking what she calls "affordable luxuries" in their everyday purchases: "Godiva, the ultimate chocolate liqueur, is a luxury that consumers want to treat themselves to for everyday occasions." Never ones to rest on their laurels, Godiva is moving forward with the launch of Godiva Caramel Milk Chocolate liqueur. "The flavor is inspired by the Godiva Milk Caramel Embrace, and combines rich, creamy caramel and smooth milk chocolate," says Long. The corresponding cocktail is the Carameltini. Long says their focus in moving forward is all about mixability, or as they like to say, "mixing decadence".

The Hiram Walker Cordials line maintains a strong hold on the number three spot for domestic liqueurs. Cort Kinker, Hiram Walker Cordials Brand Manager for Pernod Ricard USA comments, "What has been hot for us has been our Peppermint Schnapps, where we are the #1 producer, and Triple Sec, where we are likewise the #1 producer. Cocktails have continued their stellar growth, and our Triple Sec continues play a part in the growth of margaritas," says Kinker. This past summer the brand launched several new flavors in their Flavortini line: Pomegranate, Pear, Pink Grapefruit, Tangerine, and Mango Schnapps. "Our newly introduced - and consumer and bartender preferred - Melon Liqueur is expected to be a big success once the natural taste of the product is sampled," adds Kinker. His lips were sealed as to what lies ahead, but rest assured there will be new flavor launches in the coming months. The only real area of concern lately for the brand has been with flavored brandies. "Flavored brandies have been a bit challenging for us this year. With an aging consumer base, we are looking for ways to bring in new consumers," explains Kinker. They still however lead the pack with their Blackberry, Peach and Apricot brandies.

Southern Comfort saw an increase of over 6% in growth and maintained their number two spot for domestic cordials. More than any other factor, there's been one cocktail in particular that's driven their numbers up. "We are continuing to benefit from broad consumer acceptance of the SoCo & Lime drink. This particular phenomenon started in the Northeast about ten years ago but has gathered steam and is becoming very relevant out west and in many of our global markets" says Campbell Brown, Vice President, and Director Southern Comfort Americas. Looking to 2OO8, SoCo plans to go forward with their multi-media approach. "We will continue to develop new advertising for the brand that leverages exciting music and graphic treatments of groups of friends enjoying SoCo in various settings," Brown remarks. Demographically speaking, Southern Comfort targets young adults in the 21 to 29-year-old range with a focus on more intimate settings. "Typically we give a greater focus to environments and situations where smaller groups of friends gather. This is a brand that has a strong appeal across age groups and sexes and we like to support that by developing promotional mechanisms that put a spotlight on the group versus the individual," says Brown.

Heaven Hill Distilleries was the first to bring a pomegranate liqueur to market in the form of PAMA - and they made their mark with resounding results. The Adams Handbook reports that sales of over 5O,OOO cases in 2OO6 earned it a Rising Star Brand Award. "PAMA and pomegranate right now are on fire. I think it's only going to get bigger until the next thing comes along. It will probably cycle for a year or two. Everyone right now is into pomegranate. It's the hot flavor that everybody wants to try," remarks David Boyle, Vice-President of National On-Premise Accounts for Martignetti Companies. "The past year for PAMA has been outstanding. PAMA is growing in leaps and bounds thanks to mixologists, bartenders and consumers embracing the versatility and flavor of the product," says Reid Hafer, Senior Brand Manager of PAMA for Heaven Hill Distilleries. Hafer also acknowledged the brand's need to grow in the minds of consumers and how there is still tremendous opportunity in this area. Hafer also thinks that the flavor is in it for the long haul. "PAMA would not be around if we felt the pomegranate was a passing interest," he says. As for usage, there's no shortage of options. "It is a great element for complex drinks or for a simple tonic drink with lemon. Further, martinis, margaritas and Mojitos all benefit from a sweet splash of PAMA," remarks Hafer. Their media campaign continues with ads in magazines like vanity fair, bon appetit and marie claire and they'll continue to utilize scent strips in select publications. PAMA is also honing in on the romance of February 14. "PAMA and the pomegranate are seductively styled and flavored. So, the brand will take an approach towards Valentine's Day. The program combines holiday-themed ads in lucky, elle and bon appetit with unique mixed drinks, POS, web-advertising and tasting opportunities where legal across the country," Reid comments.

imports

Grand Marnier, the fifth most popular of the imports, continued to enjoy a steady rise in sales. "We've got about 13 years of consecutive growth on Grand Marnier," says JC Iglesias, Business Director of the Grand Marnier Group for Moet Hennessy USA. Iglesias points to the classic drinks continuing popularity as well the brand's solid reputation. "We have a role to play because we are a differentiated product within cordials and liqueurs. We're not triple sec. We add more depth and richness and complexity and that uniqueness is really what helps us," Iglesias says. The focus lately has been two fold. The first one is experiential consumer programs. "We did a tour around the country in 21 different cities doing comparative tastings of margaritas with and without Grand Marnier and had phenomenal results," remarks Iglesias. The other focus has been on working with bartenders. "The brand has a very long standing relationship and affinity with the bartenders specifically," says Iglesias. He goes on to explain that bartenders in their role as gatekeepers are huge contributors to the growth and popularity of the brand. As for specific drinks, Iglesias identified not only the margarita, but a host of others: "One of the earliest cocktails for Grand Marnier is something called a Red Lion and it's actually a gin based cocktail. We're getting a fair amount of traction on that. The other one that works really well for us is the Sidecar. I've seen people do Grand Fashioned which is Grand Marnier, muddled oranges and bitters; sometimes with a little bit of bourbon."

The number four import, Hpnotiq, earned a 1.7% increase in sales in 2OO6. "Hpnotiq had a great year seizing on a growing base of consumers still encountering the product for the first time. In addition, we had great success with National Accounts and awareness among mixologists and bartenders," explains Justin Ames, Senior Brand Manager of Hpnotiq for Heaven Hill. Ames also points to the growth of martinis and the popularity of exotic fruit flavors. The brand supported cocktails and bartenders through the Hpnotiq Bartender IQ & VIP Recipe Contest. "The program rewards bartenders for their knowledge of Hpnotiq with a $25 cash card and entry into a Las Vegas VIP trip. The goal is to continue to build on the brand awareness of the flavor and versatility," says Ames. The foot will remain on the accelerator this year as well.

Sidney Frank's legacy lives on via the leading import Jagermeister. The 19.1 % increase speaks for itself. It's no secret that its biggest fans are the over 21 college and beyond set - although it wasn't always in the forefront of consumer's minds. "I'd never heard of Jagermeister until the mid '8Os when I was tending bar. I tell people that's now a case buy. It's still a shooter brand. You can't say to somebody, 'have a Jagermeister and tonic, have a Jagermeister and Coke' - it doesn't work," says David Boyle of Martignetti Companies. Dennis Iannelli, from Bauer Wines agrees with Boyle on this point: "It's not really utilized as a mixed drink or it's not even utilized as an after dinner cordial. It's basically a shot and a shooter." However, Rich Daly from Andover Liquors points to the ubiquitous Jaegerbomb cocktail (Jaegermeister and Red Bull) as a major factor in the brand's continued success. Bauer Wines owner Susan Fortuna says she knows it's a hot seller, just not with her clientele. "We don't sell a lot but it's popular with the college age kids. I don't see anyone over 3O buying it," she remarks.

"This past year has been a really exciting year for Baileys" says Yvonne Briese, Brand Manager of Baileys for Diageo. Baileys sits in the number two position for imports and recently rolled out two new flavors; Baileys Hint of Mint Chocolate and Baileys Hint of Caramel. "They are on fire. I think those two brands are absolute winners. They've been very successful with what they're trying to do and I see them both as growth opportunities," remarks Martignetti's David Boyle. Briese reports that the key growth drivers of the brand are the two-fold approach of advertising and sampling. She goes on to say that there is a huge mass appeal to the brand. "It is the quintessential liqueur. It's hard to find somebody who doesn't like Baileys." Briese also says that it's key for the brand to promote new ways for it to be served. "Consumers are always looking for something interesting. Sometimes they need a little bit of a nudge." To that end Baileys rolled out a new cocktail this past summer called The Baileys Shiver and has plans to pursue it further this year. "It is basically just Baileys and ice in a blender. It's just a nice refreshing tasting product. It cuts down the sweetness just a little bit and the delivery is everything you expect Baileys to be."

"Our Disaronno continues to maintain category leading investment in national cable TV advertising and that really has been the key driver of the brand's growth. It's also attributed to the high levels of awareness that the brand enjoys," says Michelle Beauchamp, Senior Brand Manager of Disarrono for Bacardi USA. The brand landed in the number 7 spot this past year with a 6.3% increase. "As you know, Disarrono has a very unique flavor profile and consumers have been discovering its versatility in the mixed cocktail. So what we're seeing is a lot of consumers enjoying Disarrono cocktails like the Disarrono Sour and the Disarrono Cosmo," says Beauchamp.

The target audience for Disarrono, explains Beauchamp, is males and females ages 25 to 34. She adds that people are willing to pay a premium for it as it's the original amaretto and its recipe goes back to the Renaissance times of 1625, which is where the romance comes in. "The story is that a student of Leonardo de Vinci's was commissioned to do work on a fresco for the Adoration of the Magi in Saronno, Italy, and he was quite taken with the innkeeper's daughter. He asked her to pose for the fresco. She did and actually her image remains on that fresco to this day so, as a thanks to him, she created Disarrono and that's the origin of the brand."

The bottle and what's inside are creations from Robert Cooper, St. Germain Elderflower Liqueur, which launched in March of last year. The brand took home the "Double Gold" and "Best in Show" awards at the 2OO7 San Francisco World Spirits Competition. Cooper is a third generation distiller, former owner of Chambord and current president of Cooper Spirits International. "It's been amazing how well received it's been. Ultimately I created this product not just for top bartenders and enthusiasts of the cocktail culture but also for consumers at large," says Cooper. It all started about eight years ago in London when a bartender served Cooper a cocktail that would set him on the quest that would ultimately become St. Germain. "I asked him what is in this and he said elderflower and I thought he was lying to me. He went on to explain to me that it's a flower that tastes like a fruit," explains Cooper. The bartender apparently had been making a simple syrup with handpicked elderflowers on a very small scale. "Little did I know how difficult it would be to produce a liqueur made from these flowers," says Cooper.

"It was really my desire to create an amazing sort of product that was produced based on classic production methods that really led to the difficulties. I could have slapped together an elderflower liqueur much in the way that the multi-nationals slap liqueurs together - and done it and turned it around in 18 months - but that's not what I set out to do. I set out to create a liqueur that was based upon the fresh flowers that had a very low sugar content," tells Cooper. It took him three years to find a source of the fresh flowers that was significant enough to make a commercial product. Eventually he was introduced to a group of French farmers who had been harvesting the flowers for decades and some of them still used old bicycles to collect them. It did however take Cooper and his team three harvest seasons to perfect the process. "One of my production team members suggested that we try this idea that he had come up with and it basically allows us to gently press the flowers without pulling too much flavor out of them and it allows us to do it very rapidly to maintain the freshness of the flowers so that they're not sitting too long in solution. The second I tasted the maceration after that third harvest I just knew that was it and that's what we're drinking today."

Cooper also is credited with designing St. Germain's bottle, each of which is individually numbered and includes the vintage date. "I was looking for inspiration in a lot of different places; vintage perfume bottles, antique liqueur and cordial bottles from France particularly. It's also inspired by the Art Deco period which coincides with the period of time in France that I think is very in line with the spirit of the brand, that sort of innovative; creative era in the early 19OOs through the 193Os when there was a lot of creativity emanating the Saint Germain des Pres area with existentialists and a lot of incredible modern art coming from there at the time." Cooper points out that although his liqueur's name was originally inspired by the neighborhood in Paris it was also very much influenced by a visit to a chapel near the harvest site. "A lot of the classic cocktail bartenders are adverse to working with new products because they want to align themselves with products that have stood the test of time, that have had longevity, and so they shy away from anything new because they don't want to be seen as climbing aboard some flash in the pan or not really aligning themselves with things that really have a ton of integrity," says Cooper. "I just tell people that it's really well made, the drinks are amazing, it's got integrity, it's a new classic and it's the answer to all of the world's problems."

Drambuie continues to tap into its rich history as a means of modernizing and contemporizing the Scottish spirit. "During the last two years the consumer outreach has been centered around the Drambuie Pursuit Contest. Ten teams will be selected to go Scotland and participate in it - a race across the Scottish countryside re-tracing the steps of Bonnie Prince Charles," outlines Michelle Beauchamp, who is also Drambuie's Senior Brand Manager for Bacardi USA. Beauchamp also explains how the brand was first bestowed upon the fabled McKinnons. "During that pursuit, when the British were chasing Prince Charles across the countryside, he actually handed off the recipe to the McKinnon family; the secret recipe for Drambuie." Drambuie goes back to 1745 when said prince failed to reclaim his throne from the British and ended up on the run. "The modern day adventurer is the kind of consumer we're looking to connect with, it's tied directly to the essence of the brand," says Beauchamp who adds that this campaign will continue throughout 2OO8.

"Our goal for Drambuie is to generate product trial and adoption by adult males ages 25 to 34 and these are males who consider themselves modern day adventurers."

It was a mid-November afternoon when I and a handful of other writers broke bread with acclaimed spirits writer Gary Regan at Eastern Standard Restaurant in Boston. Regan was on a multi-week Bacardi USA sponsored tour and his mission was to introduce the world to his new B&B/Benedictine cocktail creation: the TAMI. Regan regaled us with tales of starting the tour at the legendary bar where B&B was born some 7O years ago: The 21 Club in Manhattan. "Before we get on the plane to go to France, I was being a clever bastard and I invented this drink in my head. I gave the ingredients to the bartender and he made it up and it did not work. I had called for too much B&B and it took over the drink," recalls Regan. His next stop was in Fecamp, Normandy, where he toured the B&B distillery. All the while, Regan was trying to perfect his failed B&B cocktail attempt that took place back at The 21 Club. While on the trip, Regan was asked by a Bacardi USA representative which direction he thinks the brand should head and he offered up a surprising response: "We're going to teach people to throw B&B down the drain." Two days later in Paris, while dining at Maxine's, Regan perfected his formula and the TAMI came to life. "I'd reformulated it to make it three parts Cognac, one part sweet vermouth, one dash of Angostura bitters per drink and then the B&B we just put half an ounce in the glass, whirl it around, coat the interior so we're rinsing the glass with B&B and then you discard the excess." Regan says that The Benedictine Palace represents Tradition and Modernity, Art and Industry. "So I juggled them about and TAMI was born on the 18th of October of 2OO7 at Maxine's," quips Regan.

Brandy Toth, Field Marketing Manager for Bacardi USA, also chimed in on the brand. "B&B has such an amazing story, an amazing recipe. It adds so much to the drink repertoire and we're really trying to get people to recognize that it's a fantastic brand that's been around for a long time, not like the flavor-of-the-month vodka.

Earlier last year Kahlua, the number three import, launched two new flavors; Kahlua French Vanilla Coffee Liqueur and Kahlua Hazelnut Coffee Liqueur. Although he points to some initial confusion, David Boyle at Martignetti gives both extensions of the line the thumps up. "I think they're hot - I just think people don't know what to do with them. People are expecting a coffee flavored liqueur. So when I say to somebody 'Kahlua Hazelnut, Kahlua French Vanilla' people are taken aback. But once they try it, they love it." Susan Kilgore, Kahlua Brand Director for Pernod Ricard USA comments on the results so far: "They have been extremely well received by the trade and consumers. These two flavors are the most popular coffee flavors in the US so they are a natural line extension for the number one selling family of coffee liqueurs."

The brand's most recent ad campaign is called Explore Your Curiosity. They also hope to boost consumer interest in another way. "Kahlu;a recently introduced new packaging that leverages the iconic Kahlua bottle and color palette, one of the most recognized packages in the spirits industry. The new packaging redesign builds on the existing equity of Kahlua by introducing premium metallic accents, along with Meso-American cues that evoke the brand's heritage," says Kilgore. 2OO8 brings with it the launch of Raspberry White Russian Ready-to-Drink and Drinks-to Go. You can also expect iced blender drinks this summer and some other new initiatives that are still classified as "hush, hush".

retail snapshots

"Some of the hotter products would be limoncello. There are also various other ones, such as cream limoncello and flavores. The raspberry flavored limoncello (Sonia di Sorrento cream limoncello) has been a new, hot rage," reports Rich Daly, Manager of Andover Liquors. "The other thing that's been kind of hot is the PAMA pomegranate liqueur. Then we just got in this biscotti liqueur (Faretti Biscotti Famosi Liqueur). It's delicious," says Daly, who also mentions that the martini madness in all of its many forms continues to drive his sales in the cordials category.

Over at Bauer Wine & Spirits in Boston, owner Susan Fortuna also points to the popularity of martinis. "It seems that certain drinks become popular in bars. When they were doing the chocolate martinis, all of a sudden you'll see people wanting Godiva chocolate liqueur or cre;me de cacao or different things like that that sort of make a hit in a bar scene. People want to make them at home when they're having a party and say 'this would be something cool and different to do and we'll make a special martini.' So we'll start to see spikes in certain liqueurs." Howie Rubin, also from Bauer Wine & Spirits, offers his take on the past year. "One of the better liqueurs that we sell a ton of is the Belle de Brillet. It's a pear cognac liqueur. The other one that does well is Diabolique made by a local chef [Robert Fathman] and the one we have is the bourbon spice liqueur." Rubin also gives the thumbs up to PAMA. "We had a huge summer with it. That's something you can have during the summer with a little sparkling water or something or you can put it in some vodka and make a pomegranate martini so that's done really well for us." Rubin also agreed with Rich Daly on the consistent performance of limoncello and he singles out Limone from the Island of Sardegna.

on-premise commentary

A conversation with Deneen Scully, bartender at The Bristol Lounge at Boston's Four Seasons Hotel, reveals her clientele's love for the classics as well. "Pretty much what I think is happening is things are going very classic, back to all the classic cocktails. Most places are really working on that: fresh flavors, just going back to making everything fresh - new ingredients that are really old ingredients," says Scully. As to what's a consistent customer favorite, that was an easy one for Scully to answer. "We do a Boston Uncommon. It's a hot coffee drink that we do every year and it's pretty popular. It has Baileys and Frangelico and coffee."

until next year . . .

It's clear that the passion for flavor and the love of traditional cocktails has spilled over from 2OO6 into 2OO7. 2OO8 will no doubt continue to paint from this palette while also exploring new territory by way of new flavor launches and the wizardry of local mixologists. Next year at this time it will be very revealing to check the status of Kahlu;a's new flavors, the revival attempts of B&B and Drambuie, how St. Germain makes out and of course, whether Jagermeister logs another explosive year. Until then, keep the flavor wheel spinning and stay on a steady course with creative cocktails.

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