Dark Spirits - US - September 2012

Published by: Mintel International Group Ltd.

Published: Sep. 1, 2012 - 136 Pages


Table of Contents

SCOPE AND THEMES
What you need to know
Definition
Data sources
Sales data
Consumer survey data
Advertising creative
Abbreviations and terms
Abbreviations
Terms
EXECUTIVE SUMMARY
The market
Figure 1: Total U.S. sales and fan chart forecast of dark spirits, at current prices, 2007-17
Market factors
Consumption patterns staying steady
Figure 2: Dark spirits consumption, January 2011-March 2012
Population growth among adults 21+ makes for larger target audience
Figure 3: U.S. population aged 21 or older, 2006-16
Figure 4: Population aged 21 or older, by race and Hispanic origin, 2006-16
Retail channels
Off-premise accounts for majority of volume sales
Figure 5: Off-Premise sales of dark spirits, at current prices, 2005-10
Figure 6: On-premise sales of dark spirits, at current prices, 2005-10
Market leaders
Volume sales concentrated among top three companies
Figure 7: Company sales of dark Spirits, 2010 and 2011
The consumer
Nearly half of adults drink dark spirits
Figure 8: Consumption of dark spirits, by type, May 2012
Relaxation, taste, and socializing primary reasons for dark spirits consumption
Figure 9: Motivation for drinking dark spirits, by gender, May 2012
Dark spirits most likely enjoyed at home
Figure 10: Locations for drinking dark spirits, by gender, May 2012
More than half of Hispanic and Asian respondents drink dark spirits
Figure 11: Consumption of dark spirits, by race/Hispanic origin, May 2012
What we think
ISSUES IN THE MARKET
How can dark spirits attract more women drinkers?
How can dark spirits be positioned to attract young consumers aged 21+?
How do Americans reconcile pursuit of healthy living with alcohol use?
INSIGHTS AND OPPORTUNITIES
Develop more uniquely flavored premixed dark spirits drinks
Develop cross-promotions/expand into other categories
Resealable packaging serves as a form of portion control
Provide nutritional information on packaging
Eco-friendly packaging may provide a point of differentiation
TREND APPLICATIONS
Sense of the Intense
Extend My Brand
2015 Trend
MARKET SIZE AND FORECAST
Key points
Dark spirits market appears to be rebounding slightly from recession
Figure 12: Total U.S. retail sales and forecast of market, at current prices, 2007-17
Figure 13: Total U.S. retail sales and forecast of market, at inflation-adjusted prices, 2007-17
Fan chart forecast
Figure 14: Total U.S. sales and fan chart forecast of market, at current prices, 2007-17
MARKET DRIVERS
Key points
Dark spirits consumption trends holding steady
Figure 15: Dark Spirits consumption trended, February 2007-March 2012
Age more than just a number to dark spirits category
Figure 16: U.S. population aged 21 or older, 2006-16
Asian and Hispanic growth potentially increases target audience
Figure 17: Population aged 21 or older, by race and Hispanic origin, 2006-16
Consumer sentiment and disposable income still reeling
Figure 18: Consumer Sentiment, March 2007-May 2012
Figure 19: Real disposable personal income, January 2007-April 2012
COMPETITIVE CONTEXT
Key points
White spirits’ connection with women hurting dark spirits
Figure 20: Ways of drinking dark spirits, May 2012
Wine is the alcoholic beverage of choice for in-home use
Figure 21: Alcoholic beverage consumption at home preferences, May 2012
Beer category taps nearly twice as much dollar sales as dark spirits
Figure 22: Total U.S. sales and forecast of beer, at current prices, 2006-16
SEGMENT PERFORMANCE—DARK SPIRITS
Key points
Whiskey/whisky largest dark spirits segment
Figure 23: U.S. volume sales of dark spirits, 2007-12
Recent growth may be good fortune for dark spirits
Figure 24: U.S. volume sales of dark spirits, 2007-12
SEGMENT PERFORMANCE—WHISKEY/WHISKY
Key points
Whiskey/whisky sales not barreling forward
Figure 25: U.S. volume sales of whiskey/whisky, 2007-12
SEGMENT PERFORMANCE—CORDIAL AND LIQUEUR
Key points
Cordials/liqueurs need more usage occasions
Figure 26: U.S. volume sales of cordials and liqueurs, 2007-12
SEGMENT PERFORMANCE—BRANDY AND COGNAC
Key points
Brandy and Cognac somewhat of an afterthought
Figure 27: U.S. volume sales of brandy and Cognac, 2007-12
RETAIL CHANNELS—OFF-PREMISE
Key points
Off-premise sales chugging along
Figure 28: Off-Premise sales of dark spirits, at current prices, 2005-10
RETAIL CHANNELS—ON-PREMISE
Key points
On-premise sales looking to bounce back from recession
Figure 29: On-premise* sales of dark spirits, at current prices, 2005-10
LEADING COMPANIES
Key points
Product diversity key to category success
Leading companies’ news and developments
Figure 30: Manufacturer sales and market share, 2010 and 2011
BRAND SHARE—CANADIAN WHISKY
Key points
Canadian Whisky sales are on ice
Figure 31: Leading brands sales of Canadian whisky, by volume, 2010 and 2011
BRAND SHARE—AMERICAN STRAIGHT WHISKEY
Key points
Segment’s sales concentrated among Jack Daniel’s and Jim Beam brands
Figure 32: Leading brands of American straight whiskey, by volume, 2010 and 2011
BRAND SHARE—SCOTCH WHISKY
Key points
Sales well-distributed throughout segment
Figure 33: Leading brands of Scotch whisky, by volume, 2010 and 2011
BRAND SHARE—AMERICAN BLENDED WHISKEY
Key points
American blended whiskey sagging due to lack of growth
Figure 34: Leading brands of American blended whiskey, by volume, 2010 and 2011
BRAND SHARE—IRISH/OTHER IMPORTED WHISKEY
Key points
Jameson makes other Irish whiskey brands green with envy
Figure 35: Leading brands of Irish/imported whiskey, by volume, 2010 and 2011
BRAND SHARE—BRANDY AND COGNAC
Key points
Top two companies account for half of the segment’s sales
Figure 36: Leading brands of brandy and Cognac, by volume, 2010 and 2011
BRAND SHARE—CORDIALS/LIQUEURS
Key points
Flavors mixing well in this segment
Figure 37: Leading brands of cordials/liqueurs, by volume, 2010 and 2011
INNOVATIONS AND INNOVATORS
Key points
Whiskey/whisky products find innovation to be a good mixer
Figure 38: Number of Dark Spirits Launches during past year, by segment
Cold economy heats up innovation process
Product innovations
Flavor
Packaging innovations
Easy-to-grip/portable
MARKETING STRATEGIES
Overview of the brand landscape
Brand analysis: Diageo
Brand analysis: Beam Inc.
Brand analysis: Brown-Forman
TV advertising
Jim Beam Red Stag
Figure 39: Red Stag, Unexpected, June 2012
Bailey’s
Figure 40: Bailey’s, “icicles,” December 2011
Crown Royal
Figure 41: Crown Royal, “Let’s party Safe,” December 2011
TYPES OF DARK SPIRITS CONSUMED
Key points
Consumers giving cordials/liqueurs and whiskies a shot
Figure 42: Consumption of dark spirits, by type, May 2012
Men of all ages tend to drink dark spirits more than women
Figure 43: Consumption of dark spirits, by type, by gender and age, May 2012
Cognac consumption highest among men and lower-income households
Figure 44: Cognac you drank in the last 30 days, by gender, January 2011-March 2012
Figure 45: Cognac you drank in the last 30 days, by household income, January 2011-March 2012
Cordials/liqueurs appeal to higher-earning households
Figure 46: Cordials and Liqueurs, by gender, January 2011-March 2012
Figure 47: Cordials and Liqueurs, by household income, January 2011-March 2012
Canadian whisky generates highest monthly consumption
Figure 48: Canadian whisky you drank in the last 30 days, by gender, January 2011-March 2012
Figure 49: Canadian whisky you drank in the last 30 days, by household income, January 2011-March 2012
Upscale-skewing bourbon whiskey produces greatest disparity among consumption levels in
men and women
Figure 50: Bourbon whiskey you drank in the last 30 days, by gender, January 2011-March 2012
Figure 51: Bourbon whiskey you drank in the last 30 days, by household income, January 2011-March 2012
Scotch whisky enjoys broad appeal
Figure 52: Scotch whisky, by gender, January 2011-March 2012
Figure 53: Scotch whisky, by household income, January 2011-March 2012
Blended whisky/rye holds strong appeal among lower income levels
Figure 54: Blended whisky or rye, by gender, January 2011-March 2012
Figure 55: Blended whisky or rye, by household income, January 2011-March 2012
Not much luck of the Irish when it comes to whiskey
Figure 56: Irish whiskey you drank in the last 30 days, by gender, January 2011-March 2012
Figure 57: Irish whiskey you drank in the last 30 days, by household income, January 2011-March 2012
Dark spirits consumption highest among wealthiest
Figure 58: Consumption of dark spirits, by type, by household income, May 2012
Millennials’ dark spirits usage may bode well for the future
Figure 59: Consumption of dark spirits, by type, by generations, May 2012
Irish whiskey consumers interested in a range of dark spirits
Figure 60: Consumption of dark spirits, by type, by consumption of dark spirits, by type, May 2012
Figure 61: Consumption of dark spirits, by type, by consumption of dark spirits, by type, May 2012
REASONS/MOTIVATIONS FOR DRINKING DARK SPIRITS
Key points
Men more likely to drink with co-workers, women with their family
Figure 62: Motivation for drinking dark spirits, by gender, May 2012
Relaxation primary motivation for all ages of men and women for drinking dark spirits
Figure 63: Motivation for drinking dark spirits, by gender and age, May 2012
Figure 64: Motivation for drinking dark spirits, by generations, May 2012
Figure 65: Motivation for drinking dark spirits, by household income, May 2012
WHERE DARK SPIRITS ARE CONSUMED AND THE POSITIONING OF SPIRITS CONSUMED
Key points
Home is where the dark spirits consumer is
Figure 66: Locations for drinking dark spirits, by gender, May 2012
Figure 67: Locations for drinking dark spirits, by household income, May 2012
Figure 68: Locations for drinking dark spirits, by generations, May 2012
Figure 69: Locations for drinking dark spirits, by motivation for drinking dark spirits, May 2012
Figure 70: Locations for drinking dark spirits, by motivation for drinking dark spirits, May 2012
Figure 71: Type of dark spirits consumed, by market positioning, May 2012
MARKET PERCEPTION OF DARK SPIRITS
Key points
Mid-range hits the target in terms of price point
Figure 72: Market position of dark spirits consumed, by occasion, May 2012
Different personality traits associated with various dark spirits
Figure 73: Perceived image of dark spirits drinkers, May 2012
Figure 74: Dark Spirits Correspondence Analysis, May 2012
PURCHASE ATTRIBUTES OF DARK SPIRITS
Key points
Familiarity is a key component of purchase decisions
Figure 75: Purchase influencers of dark spirits, by gender, May 2012
Figure 76: Purchase influencers of dark spirits, by household income, May 2012
Figure 77: Purchase influencers of dark spirits, by generations, May 2012
Brand familiarity important to men and women of all ages
Figure 78: Purchase influencers of dark spirits, by gender and age, May 2012
IMPACT OF RACE/HISPANIC ORIGIN
Key points
Hispanics, Asians most likely to drink dark spirits
Figure 79: Consumption of dark spirits, by type, by race/Hispanic origin, May 2012
Minimal variability regarding drinking locations
Figure 80: Locations for drinking dark spirits, by race/Hispanic origin, May 2012
Hispanics most likely to respond to purchase influencers
Figure 81: Purchase influencers of dark spirits, by race/Hispanic origin, May 2012
APPENDIX—CUSTOM GROUPS BY MARKET POSITION OF DARK SPIRITS
Figure 82: Consumption of dark spirits, by type, by dark spirit groups, May 2012
Figure 83: Usage of dark spirits based on market position, by gender and age, May 2012
Figure 84: Usage of dark spirits based on market position, by household income, May 2012
Figure 85: Usage of dark spirits based on market position, by region, May 2012
Figure 86: Usage of dark spirits based on market position, by generations, May 2012
Figure 87: Consumption of dark spirits, by type, by market position, May 2012
Figure 88: Motivation for drinking dark spirits, by dark spirit market position, May 2012
Figure 89: Locations for drinking dark spirits, by dark spirit market position, May 2012
Figure 90: Purchase influencers of dark spirits, by dark spirit market position, May 2012
Figure 91: Dark spirit market position, by demographics, May 2012
APPENDIX—OTHER USEFUL CONSUMER TABLES
Figure 92: Consumption of dark spirits, by type, by region, May 2012
Figure 93: Motivation for drinking dark spirits, by region, May 2012
Figure 94: Locations for drinking dark spirits, by region, May 2012
Figure 95: Purchase influencers of dark spirits, by region, May 2012
APPENDIX—TRADE ASSOCIATIONS
APPENDIX: RESEARCH METHODOLOGY
CONSUMER RESEARCH
Primary Data Analysis
Sampling
Global Market Insite (GMI)
Secondary Data Analysis
Experian Simmons National Consumer Studies
Statistical Forecasting
Statistical modelling
Qualitative insight
The Mintel fan chart
Weather analogy
APPENDIX: WHAT IS MINTEL?
Mintel provides industry-leading market intelligence
Mintel Solutions:
Mintel Oxygen Reports
Mintel GNPD
Mintel Inspire
Mintel Beauty Innovation
Mintel Menu Insights
Mintel Research Consultancy
Mintel Comperemedia

Abstract

The dark spirits category is expected to reach an all-time high of $21.4 billion in total U.S. 2012 estimated sales. The fact that this was accomplished following one of the worst recessions in the country’s history makes the accomplishment all the more impressive. However, growth was not all that strong in 2012 and was below 2011 levels, which may be cause for concern if the industry is not able to generate stronger, more sustainable growth. While dark spirits have weathered the recession better than many other categories, the fact remains that not everyone is a potential target as some people do not drink at all and those who do may be content with less potent (and more affordable) beer and wine options.

Going forward, the industry must apply lessons learned during the recession to make sure it is in position to maximize sales opportunities in the future. With this in mind, Mintel has developed insightful analysis regarding the following key issues that can make the difference between success or failure. Among the topics are:

What market drivers are likely to have the greatest impact on the dark spirits industry and how can companies and retailers convert challenges into opportunities?
Who are the most important target audiences for the dark spirits industry? What factors do consumers take into account when making a dark spirits purchase?
What is being done in terms of innovation to generate and maintain enthusiasm with regard to the dark spirits category? Which segments are most important to the market?
What are the leading companies and brands and what are they doing to build on their momentum?
How have the country’s economic struggles impacted on-premise vs. off-premise dark spirits consumption?
How much of a role do demographic factors (e.g., age, household income, gender, race) have on dark spirits drinkers’ buying habits? What are consumers’ attitudes toward the category in general and how do they affect buying behavior?

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