Many thought the budget duty hike on PPSs would seriously hu
It's been an odd nine months since the premium packaged spirits market was hit with an increase in duty in Chancellor Gordon Brown's budget.
Many outsiders thought the makers of these flavoured alcoholic beverages would feel the pinch and see sales tumble.
True, the rate of growth of PPSs/FABs has slowed, which has prompted some observers (mainly manufacturers of premium packaged lagers) to think that sales were reaching a plateau.
Yet the resilience of manu-facturers has not been dented.
Nor, too, has the thirst been quenched among the 18 to 30-year-old, predominantly female, consumer group, which is the core market for most PPS/FAB manufacturers.
The confidence of manufacturers is typified by Karen Salters, marketing manager at Beverage Brands, which includes WKD in its product portfolio.
She observes: "Since the duty changes, we have seen some major launches into the PPS sector.
These include Smirnoff Black Ice and WKD Silver, with both Reef and Archers Aqua also extending their ranges.
"This level of innovation proves that the market is by no means stagnant.
It is a highly competitive marketplace, with PPS brands spending £33.6m on media last year in addition to strong trade promotions.
"PPSs remain a margin-rich product and, with the high consumer awareness generated from extensive above-the-line activity, they are an attractive proposition for the trade and still warrant chiller space."
Salters says the support package for WKD in 2003 will be £24m. She adds: "We predict continued new-product development and consumer activity from all the key manufacturers."
Although PPSs only account for around 3% to 4% of the total on-trade drinks market, compared with beer's 59%, there is no shortage of suppliers willing to try to establish a foothold.
The other year, it was estimated that around 300 PPSs, either new entrants or different flavours to existing ranges, were launched onto the market.
This underlines the fact that throughout the category's brief lifetime little more than a decade suppliers have sought to bring something different to the market or tried to take on the big boys with a "me too" PPS.
Inevitably, many brands have come and gone in double-quick time or their sales faded to a fraction of their heyday.
The original PPSs, Hooch and Two Dogs, are a distant memory, although an intrepid explorer can still find the odd outlet stocking Hooch.
Another factor affecting the sector is the fickle nature of consumers, who are continually on the lookout for a different drinking experience.
Last year, the undisputed king of the on-trade FABs was Bacardi Breezer.
Now, that mantle has been taken over by Smirnoff Ice (see graph).
Bacardi hit back at the beginning of the year by launching a first for the category a diet variant.
The diet lemon flavoured drink contains only 110 calories and the abv is unchanged from the rest of the Breezer range at 5.1%.
Bacardi clearly feels there is a need for a low-calorie drink, as research has shown that dieters account for 11% of women in the 18 to 45-year-old age category.
Atpresent, the intention is to limit sales to the off-trade.
Reef, the fourth-largest FAB in the on-trade, is also about to get a new flavour blackcurrant and raspberry which, says manufacturer Coors Brewers, was a hit during consumer trials, with 89% voicing their approval.
The launch is being aided by a £9.5m TV campaign that will run throughout 2003.
Warren Langley, brand director for FABs at Coors, comments: "Reef is growing five times faster than the category, with rate of sale up 33%, and the brand volumes up 50% year on year."
Langley is upbeat about the prospects for the category but is also scathing about some of Reef's competitors.
He said: "The FABs market is still alive and kicking despite the undoubted impact of the duty increase, and decline of the biggest player in recent years.
"A number of brands look tired in this category, where the consumer demands freshness and innovation.
It's important thatthe brands in decline don't compromise category value by overpromoting in a bid to pull in volume.
Consumers are ready for innovation, but will only respond if it genuinely meets their needs.
Diet FABs, stubby FABs and new FABs attempting to pull consumers in to mature spirit brands don't appear to excite this young, female-biased consumer base.
"Leading youth markets have successfully used the growth within Reef to take an increasing share of the highly-profitable FABs market."
If there is a message coming through, it's get the formula right and the rewards can be great.
Take VK Vodka Kick.
It was launched three-and-a-half years ago and now sells 3.4 million bottles per week.
Manufacturer GBL International claims it is the fastest-growing PPS range in the country a claim contested by Coors, which says Reef is numero uno.
GBL is pushing the boundaries even further by introducing Cavela, a range of flavoured sparkling wine drinks.
The Chesterfield company has blended sparkling Spanish wine with fruit juice to create three flavours lemon, orange and passion fruit.
Cavela, which has an abv of 5.5% and is packed in 200mlbottles, is aimed solely at the female market and was launched last Friday Valentine's Day.
GBL says Cavela has been researched and developed for the increasingly independent andsuccessful modern woman who knows how to have fun, and how to spend money.
The company sees Cavela as a "new breed of RTD (ready to drink) that will invigorate the market".
Managing director Steve Perez remarks: "RTDs have been around for a while now and are here to stay.
Cavela is a premium product and quite different to the traditional RTDs on the market.
Everyone has been asking for something new and here it is.