Raising the Bar

New developments in alcoholic spirits are bringing sales and excitement back to center store.

Elaborate on-premise mixed cocktails and craft beers may have shaken the supermarket alcoholic beverage category, but thanks to a dizzying array of new products and line extensions of old favorites, it is once again happy hour in the supermarket spirits aisle.
According to the Summer Beverage Study conducted by BFG Communications, beer is still the No. 1 consumed-at-home alcoholic beverage, accounting for 47% of consumption, followed by vodka (11%), whiskey (8% ) and rum (7%).

“Our study found that outside the home some females are more likely to try margaritas and other mixed drinks because they don’t want to make it themselves,” says Kyle Langley, chief research officer at Hilton Head, S.C.-based BFG Communications.

According to Langley, supermarkets can increase their sales of spirits by cross-merchandising them with ancillary products. “Adult beverages are more than just a taste profile, but really a state of mind,” he says. “Within the supermarket, when you are promoting these items on end caps or in-aisle, are you promoting just the product or also the seasonal state of mind?”

“Today’s consumers are looking for convenience in their busy lifestyles, but they don’t want to sacrifice quality,” says Lisa McCann, brand manager, Malibu, for Purchase, N.Y.-based Pernod Ricard USA. In 2010 the rum brand introduced ready-to-drink cocktails in Rum Punch, Caribbean Cosmo and Tropical Sea Breeze varieties, and this year added Melon Margarita and Cosmo Light, which has only 75 calories per serving.
“Understanding the insight that consumers are looking for convenience, we used the pouch as it is easy to carry, easy to pour and it keeps the liquid cool when stored in a refrigerator or cool box,” she says. “The material keeps the freshness of the liquid, and finally, our pouches are more environmentally friendly than the standard glass or PET packaging.”

Pernod Ricard is also relaunching its Frïs vodka brand. While most vodkas use heat to remove impurities, Frïs uses a patented continuous distillation process and then freezes the vodka to 14 degrees. According to Pernod Ricard officials, the process allows impurities to be frozen and extracted so that only the purest flavor remains. The brand features new packaging and flavors including Frïs Citrus Freeze and Frïs Orange Freeze, which are being introduced in September and Frïs Whipped, launching in 2013. “We are thrilled to unveil our stunning package and updated range of flavors under the Frïs trademark,” says Jacq Dertadian, brand manager Frïs at Pernod Ricard. “Building on the momentum of the previous success of Frïs, we are confident the refresh of our package design and flavors will further bolster our brand.”

“Flavors are very hot in the marketplace and we continue to work on new product development and line extension,” says Gus Bozzo, director of the grocery channel for Brown-Forman Corp., the Louisville, Ky.-based distiller of Southern Comfort, Jack Daniel’s, Woodford Reserve, Early Times and other brands. Brown-Forman’s line extension efforts include Southern Comfort Bold Black Cherry, Southern Comfort Fiery Pepper, Early Times Fire Eater, Early Times Black Archer and Jack Daniel’s Tennessee Honey.

“Jack Daniel’s Tennessee Honey is a major hit in the U.S. and recently passed over 500,000 cases after being out a little over a year,” Bozzo says. “Tennessee Honey has also helped expand Jack Daniel’s fan base because it is very popular with women as well as Hispanics and African-Americans. Of course, the original flavored whiskey—Southern Comfort—is enjoying a resurgence which to some degree is media fueled and is showing growth both with base brand and flavor extensions.”

Lifting spirits
Bozzo says Brown-Forman is working with grocery retailers to improve spirits category sales. “We encourage operators to treat the category less as a convenience category and more as a routine or core category with a greater breadth and depth of assortment,” he says, adding Brown-Forman research shows that “of our current buyers only 27% of their whiskey purchases are being satisfied in grocery, a leakage to other channels of 73%. We are working with retailers on simplifying the shopping experience for whiskey. We encourage operators to cross-promote spirits out of department with other categories that encourage spirits participation, like mixers for tequila to make margaritas or palomas, or a whiskey display in the magazine or  book aisle as a high percentage of usage is during quiet time activity like reading.”

According to industry experts, supermarkets can use their spirits departments to compete against the liquor “warehouse” big box stores that have cropped up in recent years.

“Grocery can capitalize on a number of unique components, starting with links to food items through strong cross merchandising programs,” says Mark Schulte, senior vice president, customer marketing at execution, for Norwalk, Conn.-based Diageo. “For example, try featuring limes and tonic next to Tanqueray Gin or cola with Captain Morgan rum. Additionally, the grocery channel can further capitalize on trip frequency. This could be done through heavy steering within the store through a commitment to signage and merchandising, even creating a store-within-a-store feeling, while focusing on premiumization to maximize value.”

Diageo’s brands include Tequila Don Julio, Godiva Spirits, Zacapa Rum and Ketel One Vodka.

“When it comes to vodka, as we see the mixology trend grow across the country, we are beginning to see consumers take the concept of using fresh ingredients in cocktails and apply that to drinks they enjoy in the comfort of their home,” Schulte says. “This includes using higher quality spirits, fresh juices for mixers and fresh produce for garnish.”

Rum is also gaining in popularity, and as a result consumers are becoming more aware of the different varieties available, Schulte says. “In recent years the cocktail scene has seen an interest in punches, most of which have strong ties to rum,” Schulte says. “This trend is particularly significant for grocery store shoppers due to their likelihood to entertain at home. Creating punches has proven to be an easier and more effective way of entertaining since they can maintain the taste of great cocktails without the hassle of creating individual drinks.”

While many spirits brands can trace their history back hundreds of years, Ole Smoky Tennessee Moonshine was established in 2009, when Tennessee changed its laws to allow the licensed production of whiskey and other spirits across new counties. The Gatlinburg, Tenn.-based company currently produces three products: Ole Smoky Original Moonshine, 100 proof “sippin’ moonshine;” Moonshine Cherries, fresh maraschino cherries soaked in Ole Smoky Original Moonshine; and Apple Pie Moonshine. All are packaged in traditional 750 ml Mason jars and have a suggested retail in the range of $20 to $25.

“Our products are handmade in small batches the way it’s been done for hundreds of years here in the Smokies,” says Joe Baker, proprietor. “We are packaged in Mason jars because that is the way it’s always been done.”

In good spirits
Officials  have let the Genie out of the bottle—and put him in the can.

The Ft. Lauderdale, Fla.-based company has taken the innovative step of marketing spirits packaged in 12-ounce aluminum cans under the Genie The Spirit In A Can brand name. Varieties include White Rum, Blended Scotch Whiskey, Sake, Vodka, Blended Whiskey, Gin, Cognac, Bourbon, Tequila and Brandy. The line has a suggested retail of $5.00 per can and is 80 proof, with the exception of Sake, which is 34 proof, and Tequila, which is 70 proof.

The entire line is also available for private label, as long as the retailer allows the manufacturer to be identified on the back of the can.

“We bring the product from Scotland, Canada, Tennessee, Kentucky or Mexico to one plant overseas for canning and then we import it back to the States,” Reynald Grattagliano, owner of Scottish Imports tells Grocery Headquarters. “That is because in the U.S. there is no company that does hard liquors in a can and they cannot get the permits to do it.”  For more information, visit www.geniethespiritinacan.com.

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