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Spirits: The Consumer - US - September 2011

Spirits: The Consumer - US - September 2011

As the economy continued to wane in 2010, consumers favored off-premise spirits purchasing for the third straight year. But there were a number of bright spots: after two years of declining sales, high-end spirits rebounded. This has been driven by shoppers’ growing awareness of sophisticated spirits and a trend toward mixing cocktails at home.

Retailers—along with spirits suppliers—also took greater advantage of online and mobile media as a low-cost marketing vehicle that provides direct interaction with customers. On-premise, bars, and restaurants have become savvier about controlling inventory levels, eliminating poorly turning SKUs and creating attractive promotions that do not erode margins.


£2,534.48

The distilled spirits market is analyzed by the following segments:

White spirits

  • Vodka
  • Rum (although rum is often dark as well, for the purposes of this report, Mintel has included all rum in the white spirits segment)
  • Gin
  • Tequila

Dark spirits


Scope and Themes


What you need to know


Definition


Data sources


Sales data

Consumer survey data

Advertising clips

Abbreviations and terms


Abbreviations

Terms

Executive Summary


Market factors


Market drivers


Performance by category and price segment


Qualities of leading brands, by category


Advertising and marketing strategies


Spirits consumption


Spirit brand choices


Mixing preferences


Reasons for drinking spirits


Price sensitivity and purchasing motivators


Spirit drinking preferences


Where spirits are consumed


Race and Hispanic origin


Insights and Opportunities


Natural and organic spirits


Figure 1: Square One Basil Vodka

Organics carry premium pricing


“Diet” cocktails


Inspire Insights


Trend: “Guiding Choice”


Trend: “Mood to Order”


Market Factors


Key points


Spirits experiences modest growth


Figure 2: Spirits revenue, January 2011

Figure 3: Spirits volume, rates of increase, January 2011

Figure 4: Spirits market share among all alcolohic beverages, by sales,January 2011

Figure 5: Spirits market share among all alcolohic beverages, by volume, January 2011

Easing retail sales restrictions


Sunday “blue laws”

In-store tastings

Supermarket sales


Market Drivers


Key points


Economic indicators


Figure 6: ICS, January 2006-February 2011

Figure 7: Gross domestic products, Q1 2011-Q1 2009

Figure 8: personal income and outlays

Employment Outlook Remains Grim


Figure 9: Percentages of unemployed adults aged 16+, 2001-11

Population changes by ethnicity


Figure 10: Population by race and Hispanic origin, 2006-16

Competitive Context


Cooking the premium goose


North America dominates premium spirits market


Performance by Category and Price Segment


Key points


Vodka dominates


Figure 11: U.S. spirits performance, by category, 2010

Figure 12: Industry market share, by category, 2010

Premium brands resurge


Figure 13: U.S. suppliers gross revenue, by price category, 2010

Figure 14: Price categories, by brand and segment, per 9-liter case, 2010

Figure 15: Spirits performance, by category and segment, 2010

Qualities of Leading Brands, by Category


Key points


Top 10 spirits brands, in sales


Figure 16: Top 10 Spirits brands, off-premise, non-liquor store sales channels, May 2011

White spirits


Vodka

Figure 17: Absolut Wild Tea

Figure 18: Stoli Citros

Smaller imported vodkas

Rum

Figure 19: Captain Morgan’s Lime Bite

Gin

Figure 20: Seagram’s Extra Dry Gin

Figure 21: Tanqueray’s Rangpur

Tequila

Dark spirits


Whiskey


American whiskey


Figure 22: Heaven Hill’s Trybox Series

Blended American whiskey


Figure 23: Barton Distilling’s Kentucky Gentleman

Imported whiskey


Canadian

Scotch

Irish whiskey

Figure 24: U.S. Sales of Jameson Irish Whiskey, by Number of 9-Liter Cases

Japanese whiskey

Cordials and liqueurs


Cream liqueurs

Brandy and Cognac


What’s the difference?


On-premise vs. Off-premise


Key points


Figure 25: On-premise vs. off-premise sales by year

On-premise continues to decline


Specialty liquor stores

Supermarkets

Drug and convenience stores

Warehouse Clubs

Bars and restaurants cut costs


Inventory management

Beverage promotions

Figure 26: Leading chains with adult beverage sales*

Innovations and Innovators


Spirits en vogue


Figure 27: Sample of consumer spirits purchases at texas-area retailers

Beyond Texas


Cocktail couture


Bitters, tonics and other ingredients


Classic cocktails


Home consumption


Marketing Strategies


Key points


Retailers and suppliers shift strategies, focus on digital


Retailers and social media


Suppliers increase media spending


Figure 28: U.S. Top 10 Advertised distilled spirits brands

A holistic approach


Diageo on mobile


Figure 29: mobile version of thebar.com from diageo

Vodka


Absolut

Smirnoff

Figure 30: Rapper Sean “Puffy” Combs

Ciroc: Rapping about vodka

Figure 31: Ciroc Vodka, “Perfectly Smooth,” December 2010

Three Olives

Figure 32: Three Olives Vodka, “Cowboys,” June 2011

Rum


Bacardi

Figure 33: Bacardi, “Together,” May 2011

Captain Morgan

Figure 34: Captain morgan, “Spiced Rum,” June 2011

Malibu

Tequila


Patrón

José Cuervo

1800 Tequila

Gin


Tanqueray

Bacardi Bombay Sapphire

Whiskey


Jim Beam

Jack Daniel’s

Figure 35: Jack Daniel’s, “Tennessee Honey,” April 2011

A Hispanic version of Studio 7

Maker’s Mark

Johnnie Walker

Jameson

Other spirits


Kahlúa

Figure 36: Kahlúa,“More Intriguing,” November 2010

Jägermeister

Spirit Consumption


Key points


Rum and vodka trump other spirits


Figure 37: Types of spirits consumed, May 2011

Women drink whiskey


Figure 38: Types of spirits consumed, by gender, May 2011

True favorites


Tequila

Figure 39: Types of spirits consumed, by age, May 2011

Figure 40: Types of spirits consumed, by income, May 2011

Vodka consumption and frequency


Cheap alternatives

Figure 41: Vodka consumption frequency, by gender, October 2009-December 2010

Figure 42: Consumption frequency, by age, October 2009-December 2010

Rum consumption and frequency


Beginners to advanced

Figure 43: Rum consumption frequency, by gender, October 2009-December 2010

Figure 44: Rum consumption frequency, by age, October 2009-December 2010

Figure 45: Rum consumption type, by gender, October 2009-December 2010

Figure 46: Rum consumption type, by age, October 2009-December 2010

Spirit Brand Choice


Key points


Absolut is consumers’ favorite vodka


Figure 47: Brands of vodka, by gender, October 2009-December 2010

“Young adult brands” dominate rum


Older consumers

Figure 48: Brands of rum, by gender, October 2009-December 2010

Figure 49: Brands of rum, by age, October 2009-December 2010

Both sexes like Patrón and José Cuervo tequila


Figure 50: Leading brands of tequila, by gender, October 2009-December 2010

Figure 51: Brands of tequila, by age, October 2009-December 2010

Men have more expensive taste in gin


Older consumers like different brands

Figure 52: Leading brands of gin, by gender, October 2009-December 2010

Figure 53: Brands of gin, by age, October 2009-December 2010

Both genders savor whiskey


The classic cocktail movement

Figure 54: Leading brands of whiskey, by gender, October 2009-December 2010

Young males love Jägermeister


Figure 55: Leading brands of cordials and liqueurs, by gender, October 2009-December 2010

Figure 56: Brands of liqueurs/cordials by age, October 2009-December 2010

E&J and Paul Masson trump the brandy category


Figure 57: Leading brands of brandy and armagnac, by gender, October 2009-December 2010

Cognac


Figure 58: Leading brands of Cognac by gender, October 2009-December 2010

Figure 59: Brands of Cognac, by age, October 2009-December 2010

Mixing Preferences


Key points


Straight talk or creamy jargon


Age and income


Figure 60: How spirits are consumed, by gender, May 2011

Figure 61: How spirits are consumed, by age, May 2011

Figure 62: How spirits are consumed, by income, May 2011

Reasons for Drinking Spirits


Key points


Do people drink to get drunk more than they admit?


Excuses for drinking


More money, more occasions


Figure 63: Why consumers drink spirits, by gender, May 2011

Figure 64: Why consumers drink spirits, by age, May 2011

Figure 65: Why consumers drink spirits, by income, May 2011

Price Sensitivity for Spirits


Key points


The premium and mid-range dominate


Brand loyalty


Figure 66: Price sensitivity among spirit drinkers, May 2011

Figure 67: Response to discounts and promotions among spirit drinkers, May 2011

Purchasing Motivators


Key points


Young adults experiment


The aspirational class


Figure 68: Factors behind choosing a particular spirit, by age, May 2011

Figure 69: Factors behind choosing a particular spirit, by household income, May 2011

Spirit Drinking Preferences


Key points


Women like mixing cocktails


Figure 70: Spirit drinking preferences, by gender, May 2011

Preferences by age


Figure 71: Spirit drinking preferences, by age, May 2011

Middle-income groups more discriminating


Figure 72: Spirit drinking preferences, by income, May 2011

Where Spirits are Consumed


Key points


More men drink in bars


Figure 73: Where spirits are consumed, by gender, May 2011

Older consumers are a key demographic


Figure 74: Where spirits are consumed, by age, May 2011

Impact of Race and Hispanic Origin


Key points


Ciroc is like Air Jordans


Hispanics like trying new things


Rum and tequila


Figure 75: Types of spirits consumed, by race and hispanic origin, May 2011

Mixing preferences


Figure 76: How spirits are consumed, by race and hispanic origin, May 2011

Hispanics rarely drink alone


Figure 77: Why consumers drink spirits, by race and hispanic origin, May 2011

Brands vs. thrift


Figure 78: Spirit drinking preferences, by ethnicity, May 2011

Blacks drink at home


Figure 79: Where spirits are consumed, by race and hispanic origin, May 2011

Cluster Analysis


Gregarious Budgeters


Characteristics

Demographics

Opportunity

Recession-proof Drinkers


Characteristics

Demographics

Opportunity

Anti-social Home-imbibers


Characteristics

Demographics

Opportunity

Cluster characteristic tables


Figure 80: Spirits clusters, May 2011

Figure 81: Reasons why distilled spirits are consumed, by spirits clusters, May 2011

Figure 82: Important liquor/distilled spirit brand attributes by spirits clusters, May 2011

Figure 83: Attitudes toward distilled spirits by spirits clusters, May 2011

Figure 84: Where distilled spirits are consumed most often by spirits clusters, May 2011

Cluster demographic tables


Figure 85: Spirits clusters, by gender, May 2011

Figure 86: Spirits clusters, by age, May 2011

Figure 87: Spirits clusters, by household income, May 2011

Figure 88: Spirits clusters, by race, May 2011

Figure 89: Spirits clusters, by Hispanic origin, May 2011

Cluster methodology


Appendix—Other Useful Tables


Motivations behind choosing which spirit to buy


Figure 90: Factors behind choosing a particular spirit – brand always drunk, by gender, May 2011

Figure 91: Factors behind choosing a particular spirit – brand always drunk, by age, May 2011

Ingredient quality


Figure 92: Factors behind choosing a particular spirit – ingredient quality, by gender, May 2011

Figure 93: Factors behind choosing a particular spirit – ingredient quality, by age, May 2011

Low price


Figure 94: Factors behind choosing a particular spirit – low price, by gender, May 2011

Figure 95: Factors behind choosing a particular spirit – low price, by age, May 2011

Price promotions, such as buy one get one


Figure 96: Factors behind choosing a particular spirit – price promotion, by gender, May 2011

Figure 97: Factors behind choosing a particular spirit – price promotion, by age, May 2011

Free samples


Figure 98: Factors behind choosing a particular spirit – free samples, by gender, May 2011

Figure 99: Factors behind choosing a particular spirit – free samples, by age, May 2011

Recommendation from a friend or family member


Figure 100: Factors behind choosing a particular spirit – recommendation from a friend/family member, by gender, May 2011

Figure 101: Factors behind choosing a particular spirit – recommendation from a friend/family member, by age, May 2011

Distilling process


Figure 102: Factors behind choosing a particular spirit – distilling process, by gender, May 2011

Figure 103: Factors behind choosing a particular spirit – distilling process, by age, May 2011

Country of origin


Figure 104: Factors behind choosing a particular spirit – country of origin, by gender, May 2011

Figure 105: Factors behind choosing a particular spirit – country of origin, by age, May 2011

A new flavor


Figure 106: Factors behind choosing a particular spirit – a new flavor, by gender, May 2011

Figure 107: Factors behind choosing a particular spirit – a new flavor, by age, May 2011

Less important factors: Influence at the moment of purchase


Bartender recommendation


Figure 108: Factors behind choosing a particular spirit – bartender recommendation, by gender, May 2011

Figure 109: Factors behind choosing a particular spirit – bartender recommendation, by age, May 2011

A waitress/waiter recommendation


Figure 110: Factors behind choosing a particular spirit – waiter recommendation, by gender, May 2011

Figure 111: Factors behind choosing a particular spirit – sales associate recommendation, by age, May 2011

A sales associate recommendation at the store


Figure 112: Factors behind choosing a particular spirit – sales associate recommendation, by gender, May 2011

Figure 113: Factors behind choosing a particular spirit – sales associate recommendation, by age, May 2011

An interesting-looking bottle or special packaging


Figure 114: Factors behind choosing a particular spirit – interesting packaging, by gender, May 2011

Figure 115: Factors behind choosing a particular spirit – interesting packaging, by age, May 2011

A brand everybody orders at a popular bar or restaurant


Figure 116: Factors behind choosing a particular spirit – a brand everybody orders, by gender, May 2011

Figure 117: Factors behind choosing a particular spirit – a brand everybody orders, by age, May 2011

Sponsor promotion, such as a model working for a spirits company handing out drink cards or samples


Figure 118: Factors behind choosing a particular spirit – sponsor promotion, by gender, May 2011

Figure 119: Factors behind choosing a particular spirit – sponsor promotion, by age, May 2011

Advertisements I have seen in magazines, TV, or online


Figure 120: Factors behind choosing a particular spirit – tv or online advertisements, by gender, May 2011

Figure 121: Factors behind choosing a particular spirit – TV or online advertisements, by age, May 2011

Billboard advertisements


Figure 122: Factors behind choosing a particular spirit – billboard advertisements, by gender, May 2011

Figure 123: Factors behind choosing a particular spirit – billboard advertisements, by age, May 2011

Social media advertisements


Figure 124: Factors behind choosing a particular spirit – social media advertisements, by gender, May 2011

Figure 125: Factors behind choosing a particular spirit – social media advertisements, by age, May 2011

Appendix—Trade Associations


  • Absolut Spirits Company (USA)
  • American Beverage Licensees
  • Applebee's International Inc.
  • Bacardi U.S.A. Inc.
  • Beam Global Spirits & Wine
  • Beefeater
  • Brinker International Inc.
  • Brown-Forman
  • Buffalo Wild Wings Inc.
  • Bureau of Economic Analysis
  • Campbell Soup Company
  • Constellation Brands, Inc.
  • Costco Wholesale Corporation
  • Darden Restaurants Inc.
  • Diageo North America
  • Discovery Channel
  • Distilled Spirits Council of the United States
  • E.&J. Gallo Winery
  • ESPN, Inc.
  • Facebook, Inc.
  • Fortune Brands, Inc.
  • Godiva Chocolatier
  • Google, Inc.
  • Heaven Hill Distilleries Inc.
  • Kantar Media
  • Legal Sea Foods Inc.
  • Lehman Brothers Holdings Inc.
  • Marriott International, Inc.
  • Maxxium Worldwide B.V.
  • Moët Hennessy USA
  • Morton's Restaurant Group, Inc.
  • MySpace.com
  • National Association of Beverage Importers
  • Nordstrom
  • Organic Trade Association
  • OSI Restaurant Partners, Inc.
  • P.F. Chang's China Bistro Inc.
  • Pernod Ricard USA
  • Red Bull North America, Inc.
  • Red Robin Gourmet Burgers Inc.
  • Reuters Group PLC
  • Rite Aid Corporation
  • Royal Caribbean Cruises Ltd.
  • Ruby Tuesday Inc.
  • SAM's Club
  • Skyy Spirits LLC
  • Starbucks Corporation
  • Suntory Group
  • The Cheesecake Factory Incorporated
  • The New York Times Company
  • Twitter, Inc.
  • U.S. Bureau of Labor Statistics
  • U.S. Bureau of the Census
  • University of Michigan, The
  • US Department of Labor
  • Walgreen Co
  • Weight Watchers International Inc.
  • William Grant and Sons Distillers Ltd
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