A bit special

In the drinks industry we never seem to tire of categorising things. There are the endless categories we put drinks into - be it simply beer, wine and spirits or, worse, standard, premium and super-premium. There are also sub-categories to endure - speciality beers and genuine imported beers anyone?

Perhaps my favourite of these sub-categories is speciality spirits. There seems to be no set qualification to join this club. Essentially it is a category for brands (often top-selling ones) that don't really fit anywhere else, like Malibu (not really a rum) and Southern Comfort (not really a whiskey).

But in recent years there have been big brands belonging to niche markets that have demanded to be included - Baileys from the otherwise modest cream liqueurs sector is one. Similarly, drinks that are starting to get bigger and move beyond the typical niche liqueurs market demand inclusion as speciality spirits - sambuca being the best example.

Over the next three pages The Publican analyses this category, focusing on the main brands. This will be followed next week by a closer look at the overall liqueurs and shooters market.

Speciality spirits currently face a problem in pubs. The trend is growing for long drinks and away from straight "on the rocks" serves. In top-end bars people want cocktails, while in pubs customers are looking for something a bit more challenging than the "mix with cola" serve.

AC Nielsen's figures up to the end of March 2006 highlight this problem, showing a five per cent year-on-year decline for the sector.

Speaking to brand owners, the common strategy is to tackle this by driving towards more effective mixer and cocktail options for their brands. This is the case even in sectors that wouldn't immediately leap to mind as particularly mixer or cocktail-friendly, such as cream liqueurs.Southern Comfort

Ask a random drinker what they know about Southern Comfort and the chances are most could tell you it comes from New Orleans. But ask what Southern Comfort actually is and you might get some more interesting answers. Few people, if any, could tell you exactly what is in it.

And that is just how brand owner Brown-Forman wants to keep it. What we do know is that it is Heron-blended American whiskey mixed with citrus fruits indigenous to New Orleans and spices which used to be brought into the American port city by sailors. But the fact is, it has over 100 ingredients and the recipe remains secret.

What is important to Southern Comfort is its heritage and provenance and that is something it is increasingly looking to use to appeal to consumers.

The UK is the second biggest market in the world for the brand after the US, which is not surprising after enjoying six consecutive years of growth. According to AC Nielsen statistics published in September last year it is the third fastest-growing spirits brand in the UK on-trade, after Smirnoff and Jack Daniel's.

Despite this the UK team behind Southern Comfort has announced a new brand strategy - by introducing the "SoCo" brand nickname. Deliberately focusing on younger drinkers, Brown-Forman hopes consumers will soon start to call for a "SoCo" with the ease with which they call for a "JD" when they want a Jack Daniel's. The push to introduce the SoCo brand call is being driven through its Fat Tuesday party nights and work at big events like Mardi Gras and the Big Chill.

And this is perhaps indicative of the problems speciality spirits face. Even a brand with healthy growth wants to reinvigorate its image to consumers.

Coupled with this, Southern Comfort is looking, like many of its speciality spirits stable mates, to introduce new mixability opportunities. Using bar consultant Alex Turner, the brand is running bar education roadshows to teach bartenders about the cocktail and long drink opportunities with such an enigmatic product.

The marketing and sales teams have said they hope this new brand image and positioning will lead to 400,000 nine-litre case sales of the brand by 2010.

Malibu

Ask a random drinker what they know about Southern Comfort and the chances are most could tell you it comes from New Orleans. But ask what Southern Comfort actually is and you might get some more interesting answers. Few people, if any, could tell you exactly what is in it.

And that is just how brand owner Brown-Forman wants to keep it. What we do know is that it is Heron-blended American whiskey mixed with citrus fruits indigenous to New Orleans and spices which used to be brought into the American port city by sailors. But the fact is, it has over 100 ingredients and the recipe remains secret.

What is important to Southern Comfort is its heritage and provenance and that is something it is increasingly looking to use to appeal to consumers.

The UK is the second biggest market in the world for the brand after the US, which is not surprising after enjoying six consecutive years of growth. According to AC Nielsen statistics published in September last year it is the third fastest-growing spirits brand in the UK on-trade, after Smirnoff and Jack Daniel's.

Despite this the UK team behind Southern Comfort has announced a new brand strategy - by introducing the "SoCo" brand nickname. Deliberately focusing on younger drinkers, Brown-Forman hopes consumers will soon start to call for a "SoCo" with the ease with which they call for a "JD" when they want a Jack Daniel's. The push to introduce the SoCo brand call is being driven through its Fat Tuesday party nights and work at big events like Mardi Gras and the Big Chill.

And this is perhaps indicative of the problems speciality spirits face. Even a brand with healthy growth wants to reinvigorate its image to consumers.

Coupled with this, Southern Comfort is looking, like many of its speciality spirits stable mates, to introduce new mixability opportunities. Using bar consultant Alex Turner, the brand is running bar education roadshows to teach bartenders about the cocktail and long drink opportunities with such an enigmatic product.

The marketing and sales teams have said they hope this new brand image and positioning will lead to 400,000 nine-litre case sales of the brand by 2010.

The brand that got the cream

• On-trade distribution for Baileys is 98 per cent (AC Nielsen to Jan 06)
• Baileys is the biggest brand within the cream liqueur category in the UK on-trade, with a 93 per cent share (AC Nielsen, Jan 06)

When it comes to the cream liqueur sector, it's Baileys against the rest of the drinks world

Behemoth. It's a big word describing big things. Baileys is a behemoth of the drinks world. It dominates the cream liqueurs category in the same way that Guinness does the beer sector. You will be hard-stretched to find a pub that doesn't stock it - 98 per cent on-trade distribution is a frightening figure.

Not only does it sell well but it has a habit of wiping the floor with its competition. After all, last year it put paid to one of the bigger drinks brand launches of the recent years. Allied Domecq's Tia Lusso was a cream liqueur targeted at younger drinkers. It had significant advertising and marketing budget thrown behind it, but it only lasted three years. And the reason it failed was not down to the quality of the product - it was thanks to Baileys' dominance of the market. So strong is the behemoth that it was effectively able to price Lusso out of the market through an aggressive discounts strategy - particularly in the off-trade.

But despite the presence of Baileys the world of cream liqueurs is looking distinctly volatile. According to AC Nielsen statistics, the cream liqueur category in the on-trade declined 11 per cent in the year to the end of March 2006. The market has seen the loss of Lusso, while Bacardi-Martini scrapped the launch of Kalyr, its fruit-flavoured cream liqueur, after two years of testing.

Even Baileys hasn't had