Beam Suntory is putting a new focus on at-home bartending through its online and social media initiative, The

Cocktail Project. The new push

helps educate consumers on how to make simple cocktails like the Jalapeño Margarita (pictured), made with Tequila and orange liqueur.

T
Premium Proliferation

Staying
he popularity of cocktails has been a boon to the overall
spirits industry, but it’s been a mixed bag for liqueurs.
The liqueurs category has seen steady declines since
2012, and it fell by 1.5 percent in 2016, according to Impact
It’s easy to get lost in the “catch-all” category that is liqueurs,
which is why newer brands with niche audiences and no real
direct competition seem to be faring the best. Since its launch

POWER
Databank. Even so, some niche brands have shown solid
growth. Bacardi USA’s St-Germain elderflower liqueur and
Campari America’s Campari and Aperol aperitifs grew by
double digits from 2014 to 2015. All three brands are poised
to continue that streak thanks to their alignment with the
Despite overall sales declines, mixology community.
the liqueurs category remains a force However, many big name brands have been losing ground
in the industry BY SALLY KRAL as interest in newer products takes hold. Of the top 10 liqueur
brands, seven declined in 2016, according to Impact Data-
bank. Beam Suntory’s DeKuyper—category leader since 2013
when it overtook Jägermeister—dipped 2.7 percent to 2.11 million
nine-liter cases in 2016. As a brand touting dozens of differ-
ent flavors and styles at an average price point of $10 a
750-ml., DeKuyper faces perhaps the most competition of any
major player. “The flavor landscape is becoming increasingly
competitive, driven by brand proliferation and the introduc-
tion of new premium labels focused on single flavors,” says
Tim Carter, senior brand director of brand marketing for
The mixology boom has benefited mixables at Beam Suntory.
PHOTO BY VIRGINIA ROLLISON
in 2010, RumChata has grown to become the category’s
second-biggest cream liqueur behind Baileys and the
seventh-largest liqueur overall. After surging from 17,000 cases
in 2010 to 525,000 cases in 2015, the brand cooled a bit last
year, posting 1-percent growth to 530,000 cases, according to
Impact Databank. It’s one of the top-selling liqueurs at Texas
retail chain Twin Liquors, where it’s priced at $21.99 a 750-ml.
Baileys Original Irish Cream liqueur ($20 to $25 a750-ml.) is
also a big seller at Twin Liquors, as well as at Julio’s Liquors in
Westborough, Massachusetts, and Buster’s Liquors & Wines in
Memphis, Tennessee. After years of declines, Baileys grew
1 percent in 2016 to 1.27 million cases, according to Impact Data-
bank, thanks largely to its new Pumpkin Spice flavor extension.
At Twin Liquors, Buster’s and Julio’s, the pricing sweet spot
for liqueurs is around $25 a 750-ml., indicating a consumer
preference for premium brands. Even Grand Marnier orange
liqueur, priced in the $30-to-$35 range, continues to be a
top-seller. The brand, acquired by Campari America last spring,
has seen small but steady growth in recent years as the market’s

artisanal liqueurs like Campari,

which is essential to the Negroni.
The brand’s Negroni Week event
(pictured) is now in its fifth year.
Still, Carter is optimistic about the future. “While the cate-
gory experienced slight declines last year, we’ve seen an
encouraging uptick and renewed interest in liqueurs as mixol-
ogists and consumers revisit classic cocktails and explore new
ways of incorporating liqueurs into their drinks,” he notes.
eighth-largest liqueur, according to Impact Databank.
“Consumers are drinking better, which means our portfolio
is benefiting,” says Campari America vice president of market-
ing Melanie Batchelor. The company now has four brands
among the market’s top 10 best-selling super-premium liqueurs,

52 M A RKE T WATCH | MA R KETWATC HM AG.C OM | APRIL 2 017 AP R I L 2017 | M AR KETWATC H M AG.C OM | M ARKET WATC H 53
 including Grand Marnier, Campari, Frangelico and Aperol.
Joe Fisher, spirits buyer for Julio’s Liquors, says herbal and
bitter liqueurs are doing increasingly well, and that trend is
right in Campari America’s wheelhouse. The company’s bitter
aperitifs Campari ($27.99 a 750-ml.) and Aperol ($24.99)
grew 24 percent and 32 percent, respectively, in 2015, accord-
ing to Impact Databank.
Mark Stuart, manager and events coordinator at Buster’s,
The Flapper’s Delight cocktail (above left), developed by Julie Reiner
for St-Germain, features the elderflower liqueur, gin, lime, mint and notes that those brands are popular now because of their repu-
club soda. Classic cocktails like the Rusty Nail (above right), made tations within the mixology community. “Bartender culture
with Drambuie and Scotch, have enjoyed a resurgence lately. has driven consumers to seek out particular liqueurs,” he says.
Twin Liquors president David Jabour cites the same trend,
noting that mixology-friendly brands like Fernet-Branca,
LIQUEURS CONSUMPTION IN THE
Aperol and St-Germain comprise the fastest-growing liqueur
UNITED STATES—1996-2016 segment at his stores. “The cocktail renaissance of recent years
(millions of nine-liter case depletions) has really invigorated the category,” he adds.
22.5
Mixable And Marketable
As cocktails continue to be in high demand, liqueur brands
strongly tied to specific cocktail recipes have a competitive
edge. There’s perhaps no other liqueur for which that trend
20.0 is more true than Campari. “The brand was stagnant in the
United States for decades, and then it surged in the past five
years on the strength of the Negroni and the return of classic
cocktails,” Batchelor says. “It recently reached 110,000 cases
in the U.S. market after being stuck at around 50,000 cases
17.5 just a few years ago.”
This June, thousands of bars worldwide will participate in
the fifth annual Negroni Week, during which participating
bars and restaurants donate a portion of their Negroni sales
to charity. The bitter, spirit-forward cocktail—comprising
15.0 Campari, gin and sweet vermouth—has been wholly embraced
’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 by mixologists and consumers alike, a development that
Calendar Years
Batchelor attributes to American consumers’ palates evolving
Source: IMPACT DATABANK ©2017
to crave bitter flavors. She also notes a movement toward

54 M A RKE T WATCH | MA R KETWATC HM AG.C OM | APRIL 2 017

 TOP 10 LIQUEUR BRANDS IN THE U.S. MARKET1
(thousands of nine-liter case depletions)
Percent Change2
Rank Brand Company Origin 2013 2014 2015 2016E 2015-2016E
1 DeKuyper Beam Suntory Inc. Domestic 2,255 2,175 2,166 2,108 -2.7%
2 Jägermeister Mast-Jägermeister U.S. Germany 2,190 1,935 1,767 1,686 -4.6
3 Baileys Diageo North America Ireland 1,332 1,299 1,262 1,274 0.9
4 Southern Comfort3 Sazerac Co. Domestic 1,186 1,122 1,044 1,000 -4.2
5 Kahlúa Pernod Ricard USA Mexico 893 852 820 810 -1.3
6 Hiram Walker Pernod Ricard USA Domestic 827 786 758 726 -4.3
7 RumChata Agave Loco Brands Domestic 420 512 525 530 1.0
8 Grand Marnier3 Campari America France 488 488 491 488 -0.7
9 Kinky Prestige Wine & Spirits Group Domestic 425 430 428 417 -2.7
10 Bols Lucas Bols USA Domestic 400 392 400 412 3.0
Total Top 104 10,416 9,991 9,662 9,451 -2.2%
1
Includes bitters, anis/pastis and spirits-based aperitifs
2
Based on unrounded data
3 Acquired in 2016
4 Addition of columns may not agree due to rounding.
Source: IMPACT DATABANK ©2017

lower-alcohol cocktails—a trend that has bolstered the popu-

larity of the Aperol Spritz, a blend of Aperol, Prosecco and soda
water. “This cocktail has been a huge hit in Europe for years
and is just now catching fire in the United States,” she says.
The acquisition of Grand Marnier has bolstered Campari
America’s on-premise presence, as the orange liqueur is often
included in Margarita recipes, as well as other cocktails. Batch-
elor says the company has recently created a dedicated on-prem-
ise sales organization and a trade marketing unit to continue
fostering the company’s relationship with bars and bartenders.
Another spirit tied to a classic cocktail recipe is Drambuie,
which William Grant & Sons acquired in 2014. The Rusty
Nail, featuring Drambuie and Scotch whisky, hasn’t seen the
same enormous growth as the Negroni, but brand manager
Kate Massey says Drambuie is focusing its effort on encour-
aging bartenders to make modern drinks. “Drambuie has a
long history with bartenders,” she explains. “For many, it
was one of the first spirits they used when learning their
craft. We’ve engaged that community of bartenders and
mixologists with the challenge of using Drambuie in a way
that’s unique to their personal style. They’re taking it beyond
DeKuyper, the market’s leading liqueur brand since 2013, offers
the Rusty Nail and developing creative drinks, from a simple dozens of flavors, allowing the brand to benefit from the rise in both
Drambuie Collins to cold-brew brunch cocktails.” William new drinks and classics. The Derby Fizz (pictured) blends DeKuyper
Grant & Sons launched new packaging for Drambuie late Orange Curaçao liqueur with Jim Beam Rye whiskey, lemon and soda.
last year, bringing back the original red cap design to honor
the brand’s 272-year history. “Bartenders feel a connection Bringing It Home
with the brass and crimson colors of Drambuie, and we wanted Koster adds that an increasing number of consumers are creat-
to give that back to them,” Massey explains. ing high-quality, craft cocktails at home, inspired by drinks
Bacardi’s St-Germain, which grew 2.6 percent in 2016 to they’ve had out at bars. To encourage such consumers to use
116,000 cases, has been closely aligned with the mixology St-Germain, the brand released a cocktail recipe book, “How
community since its introduction in 2007. “The brand was to Drink French Fluently,” this past fall. Top mixologists from
built with bartenders in mind and has evolved with their feed- around the country contributed recipes for the book. Julie
back and usage,” says Cherie Koster, St-Germain senior brand Reiner of New York City’s Clover Club created the Flapper’s
manager. “Inspiring cocktail creativity within this community Delight, comprising St-Germain, London Dry gin (brand not
is key to the brand’s success.” specified), simple syrup, lime juice, muddled mint and club

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Many fast-growing liqueurs only offer single flavors, usually positioned at a super-premium price point. St-Germain in particular has won
favor with mixologists nationwide, and events like the St-Germain Jazz Age Lawn Party (pictured) help build the brand with consumers.
soda. The brand is also releasing a new 375-ml. bottle this
month. It’s priced at $19.99, compared to $35.99 for the
750-ml. size. “It’s the perfect size and the right price point to
encourage new consumers to explore using the brand at
home,” Koster explains.
Beam Suntory is targeting the at-home bartending trend
too. “Recognizing that on-premise trends increasingly
influence off-premise consumption, we’ve seen a big oppor-
tunity to simplify cocktail-making at home, which can be
inherently intimidating,” Carter says. “We launched The
Cocktail Project website (Thecocktailproject.com), which
is an educational resource that shows how our liqueurs can
be used in both classic and inventive ways. This resource,
along with DeKuyper’s seasonally relevant social media
content, provides simple cocktail solutions, removing the
barrier for our consumers who want to mix drinks at home.”
Fisher at Julio’s says that simplifying at-home cocktailing
for consumers is crucial. “Two liqueurs specifically that have
done well are Domaine de Canton ginger liqueur and Ancho
Reyes chili liqueur,” he notes. “Both have added neckers to
their bottles that offer quick and easy drink recipes to make
at home. That’s especially important with some of the rather
unique flavors that are in some liqueurs. If more companies
made it easier for the average consumer to know how to use
their liqueurs, sales would be higher. All too often a customer
58 M A RKE T WATCH | MA R KETWATC HM AG.C OM | APRIL 2 017
comes in and wants to make a certain drink, but doesn’t know
what to do. Simple drink ideas are a great way to increase the
realized versatility of a product, which increases sales.”
RumChata has had success on this front by partnering with
other spirits brands. “RumChata has teamed up with Jack
Daniel’s Tennessee Fire and Jack Daniel’s Tennessee Honey,”
says Tom Maas, brand founder and master distiller. “That part-
nership came about organically from the bartender and consumer
trend of mixing RumChata with Jack Honey to create a Honey
Chata and with Jack Fire for a Cinnamon Toast.”
Maas adds that social media is the brand’s strongest
marketing tool. “Recently, the RumChata Caribbean Cream
cocktail, made with RumChata, Jack Daniel’s Tennessee
Honey and coconut vodka, had more than 34,000 likes and
was shared more than 20,000 times on the RumChata Face-
PHOTO BY CRAIG BARRITT/GETTY IMAGES FOR ST. GERMAIN
book page,” he says. The brand also runs a successful YouTube
channel that garnered 7.9 million views last year, according
to Maas.
While much of Campari’s success is in the on-premise, the
brand recently made moves in the at-home consumption realm
with the release of the 26-percent abv pre-mixed Campari
Negroni ($39.99 a 1-liter) in select U.S. markets. “The premium
ready-to-drink category is gaining steam in the United States,
and the Negroni is the perfect cocktail to take advantage of that
trend,” Batchelor says. “The response has been fantastic.” mw