Pricey Spirits Trend Continues

BY GLENN CAMPBELL

The cocktail culture is a growing phenomenon here in America, and there is no sign of a slowdown. All sorts of new concoctions are being created at lounges, clubs and restaurants while classic cocktails are being rediscovered and updated with new twists.

According to the Distilled Spirits Council of the United States (DISCUS), spirits sales have increased about 4 percent while sales of traditional well brands are declining. The Beer Institute provides figures that show a similar trend with beer; sales of name brands are up while sales of familiar brands are waning. The Wine Institute reports increases in wine sales up to 5 percent nationally and DISCUS figures report sales of superpremium spirits up by 2 percent.

Asked what is driving this, spirits marketing specialist, Rick Gerrish of the NH Liquor Commission says, “Generally the price segment with the most growth is the spirits that sell for $20 and up. There is a willingness among consumers to spend up. We are seeing people who were Grey Goose drinkers move up to Stoli Crystal at $59 dollars a bottle.”

Tequila is getting a facelift, too. “People are approaching tequila like fine cognac. They are willing to pay $30 to $70 for a bottle of tequila. Patron, at $57 a bottle, is one of the hottest sellers in New Hampshire,” says Gerrish. Rum, too, is making a splash. Jon Hildreth of Sydney Frank Importers says that when the firm introduced Tommy Bahama rum, it did better nationwide than when it first introduced Grey Goose.

While many assume extravagantly priced cocktails are served only in Manhattan or Los Angeles, Gerrish knows differently. He says he knows of a friend who purchased a $21 Grand Patron margarita in Manchester. Gerrish says a Louis XIII cognac sells for $200 a shot, and single malt scotches are selling for $75 a pop. Hildreth says that the founder of his company, Sydney Frank, had this thought years ago: “Give the average person the opportunity to drink as well as the rich and famous, and they will come.” And Hildreth says the founder has been proven right. At Sydney Frank, sales of ultrapremium liquors have risen consistently.

“Years ago people traded from Smirnoff to Stoli [Stolichnaya] to Absolut to Grey Goose. It is not uncommon to find drinks priced in the $10 to $13 range in New Hampshire, particularly in the Manchester area,” says Hildreth.

Gerrish says one shift has been toward flavored spirits. As Generation Y, or those born after 1977, came of age, the popularity of flavored rums and vodkas swelled. Generation Y’s taste profile is different from that of the over-30 crowd. Gerrish says the younger crowd likes spirits infused with everything from raspberry, pineapple, mango, and peach, to horseradish, onions and even scorpions. Despite drinking less, consumers are spending more, according to President and CEO of DISCUS, Peter Cressey, at the Nightclub and Bar Show in Las Vegas. Cressey says spirits lead on-premise sales. Since 2000, on-premise spirits sales have increased 58 percent, from $21 billion to $33.2 billion in 2006. And there is no end in sight.

“Today’s elegant mixed cocktails such as Cosmopolitans, Grand Margaritas, Dirty Martinis, or Mojitos, had elegant predecessors such as Pink Ladies, Grasshoppers, Brandy Alexanders, Stingers and Old Fashioneds. A few of those older cocktails are still requested on occasion and undoubtedly send bartenders searching for their drink guide. What is common to all of these cocktails is that they are overwhelmingly served at restaurants and bars. They are complicated to make and almost always require more than one spirit ingredient,” says Kevin Spillane, president of Horizon Beverage Company in Bow. He says the customer who is out to dine, socialize and enjoy cocktails is striving for an experience they can’t get at home. Spillane says, “We all tend to become more upscale in public than at home. The steady superpremium vodka drinker may be much more conservative when purchasing a brand for home consumption.”

“It’s still hard to predict how far the trend might go…when Absolut, Finlandia and Stolichnaya emerged in the 1980s, there was astonishment that customers would embrace their prices. Those items almost seem average now. In their wake, every spirits category developed brands positioned at premium levels, with successful brands from tequila to bourbon to gin. Over the past seven to eight years, brands that are priced far beyond what was once considered superpremium have been introduced, and many have been successful.

Even though we wonder at what point there is a max, I haven’t seen one yet,” says Spillane. “People want to enjoy the best in life. Even though most can’t afford the Cartier watch, the expensive yacht or the designer pocketbook, they can enjoy the finest cocktail and sit next to the millionaire at the bar while doing so,” says Hildreth.