Alcoholic drinks: Spirits trends and innovations

Spirits sales are benefiting from premiumisation and the cocktail boom

In the fourth part of our special feature on alcoholic drinks we look at the key trends and innovation in the on-trade spirits market, which is riding high on the wave of the cocktail boom.

Spirits was the only drinks category to record both volume and value growth last year – with volumes up 1.5 per cent and value up an impressive 6.6 per cent according to CGA data.

“People are becoming more adventurous when it comes to spirits, they do really see it as the affordable category at the end of a hard week so while footfall in the on-trade is down, when people are coming out they are willing to spend more on something they see as premium and spirits are massively benefitting from this,” says Phil Tate, chief operating officer at CGA Strategy.

Last year, there were two clear trends driving the spirits category: premiumisation and cocktails.

Premiumisation

The UK bar scene has undergone a bit of revolution when it comes to spirits - over the last two years, the average back bar has increased the number of brands it stocks by 25 per cent and the majority of these are premium brands.

Last year, the premium segment of every sub-category of the spirits sector recorded double digit growth.

“Although people may be short of money, there has been an increase in consumers who are willing to trade up to premium brands with drinkers taking a lot more time and care to look into what they are drinking,” says Crispin Stephens, trade marketing manager UK for Jack Daniel’s.

“After all, spirits are still seen as a relatively inexpensive treat in comparison to other larger priced items like electronic goods or holidays and consumers are therefore prepared to pay more for premium spirits that can be savoured and enjoyed.”

The drive towards premiumisation has also seen the emergence of craft spirits and micro-distilleries, a trend which Tate predicts will pervade in 2014.

Cocktails

With consumers looking for something a little bit special on their night out, and willing to pay more for something they consider to be value for money, cocktails are experiencing an unprecedented boom in the UK.

According to a report form Celler Trends- which distributes brands including Jägermeister, Luxardo, Suntory whiskies – spirits consumed in cocktails now account for at least 6 per cent of the total spirits market.

Cellar Trends estimated that the number of on-trade outlets serving cocktails has hit 30,000 and is likely to reach 40,000 over the next couple of years. It estimates that the volume of spirits, liqueurs, syrups and bitters used in cocktails will hit 10 per cent this year and could reach 50 per cent by 2017.

Stephens agrees that demand for cocktails is only like to increase in the coming years. “The growing cocktail culture seen in high-end and premium accounts will filter down to the mainstream, leading to a demand for well-priced and well-made drinks for a more everyday market,” he explains.

Within the cocktails segment itself, several prominent trends have emerged:

Wine-based cocktails

With many wine drinkers turning to cocktails for a more refreshing fruity drink, demand for wine-based cocktails is on the up.

“Wine spritzer cocktails are much lower ABV than traditional cocktails and offer a great option for sunny lunches or early parts of the week,” says Andrew King, chief executive of Funkin. “You can even use lower-ABV wine like a muscato for a really low alcohol long drink.”

Matt Greenwood, Product Innovation and Standards manager at cocktail bar Dirty Martini, says operators are also experimenting by using vermouths and fortified wines. “The range of cocktails being developed with interesting vermouths and the use of sherries and ports will be predominate on a number of the top cocktail bars menus this year,” he says.

Vintage cocktails

Another noticeable trend has been the rise of vintage spirits and cocktails inspired by the prohibition era – a trend which has been particularly beneficial for whiskey.

“TV shows such as Man Men and Boardwalk Empire have resurrected the vintage glamour and sophistication of urban American culture, leading to a resurgence of classic American whiskey cocktails and drink serves, such as the Old Fashioned which is currently the second most popular cocktail for men, as people are inspired by the culture that they see in these programmes,” says Stephens.

He adds that whiskey cocktails are not limited to the classics, with bars and consumers willing to experiment with new flavours and serves. “Today’s whiskies offer unique flavour profiles, and the variety of taste characteristics on offer means they can be used in a variety of cocktails or served neat with ice and, of course, have a wide appeal,” he explains.

Exotic spirits

The Mexican spirit Mezcal, which is similar to tequila, is proving a cocktail favourite amongst consumers looking for more challenging flavours,

“Mezcal will be on many bars cocktail menus later this year,” says Greenwood. “It is featuring prominently in some of the top bars already but I see it having a similar impact that absinth had a few years back and how Pisco was received last year.”

King says that Brazilian cachaça could also prove popular as operators gear up for the World Cup this summer. “Our Brazilian mixer, which was launched in March and combines a tropical blend of mango, passion fruit, orange juice and guarana seeds, is already a best seller,” he notes.

Theatre of serve

With theatricality a key part of cocktail’s appeal, bars are looking to add a bit of pizazz to the cocktails they serve. One thing that many operators are experimenting with is creative use of ice – with bartenders increasingly using ice balls and ice columns to add drama to their drinks.

“Japanese bartending and this style will be replicated in many more bars in the UK,” says Greenwood. “The equipment to mould the perfect ice ball and create an ice column is more readily available thanks to business like The Cocktail Kingdom and I see this taking off this year.”

He adds that UK operators could follow the New York bar trend of simple cocktails with minimum fuss, but well executed, elegant garnishes are likely to remain an important part of the UK cocktail serve.

The need for interesting glassware, vessels and sharing options to serve cocktails is also expected to remain a trend this year. “Customers are influenced with how well drinks are presented and quirky and unusual glassware adds to their cocktail experience, as much as old school bartenders may disagree, it is a fact that most customers drink with their eyes,” Greenwood explains.

Summer drinks

London has experienced a fad for gin and tonic menus of late, with operators offering specific gin and tonic menus that pair different gins with specific tonics and garnishes.

Greenwood says he expects that other spirit brands will try and pick up on this trend in the coming year, particularly as the weather turns warmer and people seek out longer serve, refreshing drinks.

“I can also see many bas coming up with a range of cocktails designed for the summer season as more and more bars are taking advantage of seasonal produce that may not be readily available all year round,” he says.

King says that demand for summer refreshment is also driving growth in sharing cocktails and pitcher serves, which are proving popular for groups of customers who want to sit al fresco and avoid queues at the bar.

Pre-made products

For bars that can’t afford to invest in the staff training and ingredients needed to produce quality cocktails from scratch, pre-made mixers are becoming an increasingly attractive option.

Cellar Trends estimated that serves of pre-mix cocktails will increase by 15 per cent every year over the next five years, with a number of suppliers now offering cocktail mixers, purees and syrups to the on-trade.

King says the availability of pre-made mixers has resulted in a boom in nostalgia cocktails, with Pina Colada experiencing a particular comeback.

Greenwood says that bars are also increasingly experimenting with bottled cocktails to reduce serve times.

“Bottled cocktails were a bit of a trend last year and with the highly successful opening of the critically acclaimed White Lyan - that delivers an excellent pre bottled cocktail range on its menu - and LCC’S new concept – The Craft Cocktail Company - which seems to be only focusing on pre bottled cocktails - I can see this category growing in strength to strength this year,” he explains.

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