Posted on | May 23, 2013
Written by | Kristen Wolfe Bieler
There was a time—not long ago—when many industry experts were convinced that high-end consumer spending would never return. “Luxury” had become a dirty word and ultra-value was en vogue.
Those days are officially over. Recent data reveals that the premium spirits and Champagne categories have nearly tripled in value over the last decade to an astounding $72 billion. This, in spite of a global economic downturn.
“In the U.S. there is a very large group of people who appreciate the finer things and are prepared to pay for it,” says Bryan Fry, President & CEO, Pernod Ricard, USA. Whether it’s because consumers see wines and spirits as affordable luxuries compared with other goods, or that people are “drinking less, but drinking better,” the trend towards premiumization is showing renewed signs of growth.
Pernod Ricard is wasting no time in answering the call, growing the ultra-premium side of their already high-end portfolio. “We have one of the finest prestige portfolios in the business and plan to be doing more in the high-end segment going forward, with Champagne, Cognac and Whisky,” Fry shares. Recent months have seen the launch of high end line extensions for fast-growing Irish siblings—Jameson, Midleton
Whisky on the Rise
“If you look at how luxury consumer goods are sold, they all have strong stories about craftsmanship and history to back up the price,” says Fry. “We take the same approach with single malt Scotch. If you pay $200 for a bottle of whisky, you want to share the story about how it was made, and why it is special.” The company’s whisky division reported double-digit sales growth in many markets in recent years.
“Single malt has huge potential,” says Wayne Hartunian, VP Whiskies & Cognac for Pernod Ricard. “It is the fastest growing and most profitable spirits category, and has been able to significantly grow value without impacting the pace of growth.” The Glenlivet—still far and away the market leader—is a great example of this. Growing at twice the category rate, it currently contributes more value growth to the single malt category than any other brand. The Glenlivet is growing faster than it ever has, especially with its
Jameson, too, is seeing an explosion of growth not only with its premium offerings. “As the Irish Whiskey category continues to develop at a fast pace, there is clearly a strong trade-up dynamic in place,” says Hartunian. “Volume is coming from multiple sources—mid-tier Irish whiskey consumers, North American small batch whisky consumers and Scotch consumers. The Jameson higher marques have a very strong heritage story and craft credentials that make them highly appealing to these consumers.”
One of the most exciting new launches in the spirits industry is Absolut Elyx. The ultra-premium, small batch vodka will capitalize on the strong brand equity of Absolut—the most iconic vodka brand in the world. Made from single-estate wheat that is manually distilled in an old copper still, Absolut Elyx is pure and elegant. Perhaps its most distinguishing factor is its texture—silky, smooth and mouth-filling. Mathias Westphal, Global Brand Director for Absolut, describes it as “the finest expression of the expertise, creativity and passion that
The trade-up trend extends into the Champagne category as well. Pernod Ricard’s portfolio—led by Perrier Jouet and G.H. Mumm—is on fire. Perrier Jouet’s new spring POS was designed to reinforce the brand’s prestigious image and rich heritage. Designed by Tord Boontje, the world famous London-based artist, Perrier Jouet’s “Enchanting Tree” is a gold flute-tree holding up to six Champagne flutes and decorated with gold leaves and white anemones.
Moving forward, Pernod Ricard USA is committed to ensuring that the firm remains a leader not only in multiple categories but also multiple ways—line extensions, brand new products and high-end offerings that delivery quality and packaging in synch with their price tags. Plus, with their distribution network is primed to make their portfolio accessible to both on- and off-premise accounts from coast to coast, Pernod Ricard USA is positioned to satisfy the aspirational thirst of Americans as they continue to embrace luxury.
Putting The Power Back In Powers
While Jameson is clearly the Irish whiskey engine of Pernod-Ricard, Powers has also been enjoying double-digit growth and is well-positioned for a higher market profile—with the ability to enhance the Irish category overall. The Powers calling card has always been reliance on single pot still production, which, while less efficient and more time- and labor-intensive, yields greater depth and complexity. In particular, the plan for Powers is to emphasize this production point of distinction, as well as to return the brand to its historic roots as a higher-proof spirit, as it was when exported for much of the 20th century. Arriving this July, replete with new packaging, the revamped Powers Gold Label (which is roughly three-quarters single pot still) will sport 43.2% ABV (86.4 proof) and a $30 SRP (up from $23).
The jump in quality is palpable, and meriting the higher tag, as the whiskey still expresses the signature Irish softness and accessibility, but with a lovely sweet caramel nose and fuller body. The palate impression is richer, longer and shows a touch of spice. It makes a strong case for Irish whiskey as a sipping spirit.
Reinforcing the Powers makeover are two smaller-production expressions poised to reward the Irish aficionado looking for an elevated experience, and whiskey sippers looking for new paths. Powers John’s Lane, introduced this March, honors the brand’s original distillery in Dublin. It is 100% single pot distilled and aged a minimum of 12 years, mainly in first-fill bourbon casks; bottled at 92 proof, it is both potent and complex, with the earthy aromas and mature character to compare favorably with other whiskey rivals—not just Irish—at its $69 price point. And coming in July, when the new Gold Label hits, Powers Signature Release (SRP $45) represents another 92 proof, 100% pot still bottling, but is unaged, therein clearly pushing the Irish whiskey envelope.
Absolut’s ultra-premium expression is clean and well-rounded with a light, grainy fragrance and hints of aniseed. Extremely smooth and silky, it has a mouth-coating creaminess with subtle nut notes. The finish is mellow and warm, with notes of nuts and spice that linger. SRP: $49.99/1L
Midleton Barry Crockett Legacy
This single pot still Irish Whiskey (aged in American oak) showcases an elegant nose of vanilla and charred oak filled out with hints of lime, green berries, pears and sweet peppers. On the palate, it is complex and smooth with cinnamon- and vanilla-accented flavors of pepper, fresh citrus and mandarin orange. SRP: $240
Aromatic with spice, wood and toffee, this ultra-smooth Jameson expression explodes on the palate with flavors of fudge, toffee, leather, vanilla and nuts. The finish is long and complex. SRP: $84.99
The rich taste of pot still whisky comes through in this bottling, defined by sweet honey notes, spicy nuts and a creamy texture. The peppery finish lingers nicely on the palate. SRP: $59.99
2004 BELLE EPOQUE BRUT
From some of the best vineyards in the Champagne region, Perrier- Jouët’s Belle Epoque Brut is bright and floral, with citrus blossom notes and flavors of pear, almonds and pineapple. SRP: $140