The 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 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 mixology community.
However, many big name brands have been losing ground as interest in newer products takes hold. Of the top 10 liqueur brands, seven declined in 2016, according to Impact Databank. 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 different 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 introduction of new premium labels focused on single flavors,” says Tim Carter, senior brand director of brand marketing for mixables at Beam Suntory.
Still, Carter is optimistic about the future. “While the category experienced slight declines last year, we’ve seen an encouraging uptick and renewed interest in liqueurs as mixologists and consumers revisit classic cocktails and explore new ways of incorporating liqueurs into their drinks,” he notes.
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 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 Databank, 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 eighth-largest liqueur, according to Impact Databank.
“Consumers are drinking better, which means our portfolio is benefiting,” says Campari America vice president of marketing Melanie Batchelor. The company now has four brands among the market’s top 10 best-selling super-premium liqueurs, 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, according to Impact Databank.
Mark Stuart, manager and events coordinator at Buster’s, notes that those brands are popular now because of their reputations within the mixology community. “Bartender culture 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, Aperol and St-Germain comprise the fastest-growing liqueur segment at his stores. “The cocktail renaissance of recent years has really invigorated the category,” he adds.
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 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 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 Campari, gin and sweet vermouth—has been wholly embraced by mixologists and consumers alike, a development that Batchelor attributes to American consumers’ palates evolving to crave bitter flavors. She also notes a movement toward ower-alcohol cocktails—a trend that has bolstered the popularity 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. Batchelor says the company has recently created a dedicated on-premise 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 encouraging 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 the Rusty Nail and developing creative drinks, from a simple Drambuie Collins to cold-brew brunch cocktails.” William Grant & Sons launched new packaging for Drambuie late last year, bringing back the original red cap design to honor the brand’s 272-year history. “Bartenders feel a connection with the brass and crimson colors of Drambuie, and we wanted to give that back to them,” Massey explains.
Bacardi’s St-Germain, which grew 2.6 percent in 2016 to 116,000 cases, has been closely aligned with the mixology community since its introduction in 2007. “The brand was built with bartenders in mind and has evolved with their feedback and usage,” says Cherie Koster, St-Germain senior brand manager. “Inspiring cocktail creativity within this community is key to the brand’s success.”
Bringing It Home
Koster adds that an increasing number of consumers are creating high-quality, craft cocktails at home, inspired by drinks they’ve had out at bars. To encourage such consumers to use St-Germain, the brand released a cocktail recipe book, “How to Drink French Fluently,” this past fall. Top mixologists from around the country contributed recipes for the book. Julie Reiner of New York City’s Clover Club created the Flapper’s Delight, comprising St-Germain, London Dry gin (brand not specified), simple syrup, lime juice, muddled mint and club oda. 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 opportunity 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 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 partnership 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 Facebook 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.”