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Premiumization Strategies in Alcoholic Drinks: Innovating to Drive Value through Brand and Product Enhancement Product Image

Premiumization Strategies in Alcoholic Drinks: Innovating to Drive Value through Brand and Product Enhancement

  • Published: June 2010
  • Region: Global
  • 161 Pages
  • Scripp Business Insights

FEATURED COMPANIES

  • Cîroc
  • Courvoisier
  • Dos Equis
  • Heineken
  • Jameson Irish whiskey
  • Patron tequila
  • MORE

Due to rising affluence and increasing levels of health consciousness, growth in alcohol consumption has slowed in Western markets in recent years, while the sales of brands perceived as ‘premium quality’ have risen. Meanwhile in the developing world, wealthier consumers are following the same trends, whilst lower-income consumers are increasing their consumption of beer and other branded alcoholic drinks as they are increasingly able to afford them. Consumption occasions have has also changed. In markets that traditionally have a strong on-trade focus such as the UK, people are drinking more at home than in bars, restaurants and clubs – a trend that was established by the time of the 2007-2010 global financial crisis, but that was also exacerbated by its impact on incomes.

This report will evaluate the growth and importance of premium alcoholic drinks across beer, cider, flavoured alcoholic beverages (FABs), spirits and wine. It will provide insight into effective premiumization strategies and make recommendations on how premium brands can succeed in an economically challenging and competitive market.

Key findings...

Over the next 10 years, READ MORE >

Premiumization Strategies in Alcoholic Drinks
Executive summary
Market overview
Consumer drivers of premiumization
Premiumization through product attributes
Premiumization through brand attributes
The evolution of premiumization strategies
Future outlook

Chapter 1 Introduction
Introduction
The scope of the report
Methodology

Chapter 2 Market overview
Summary
Introduction
The evolution of premiumization
Growth trends in premium alcohol
Value and volume trends
Growth variations within categories
On-premise versus off-premise
Upscale NPD analysis
Premium development fell in 2009 due to the downturn
Premium NPD is focused on spirits and RTDs

Chapter 3 Consumer drivers of
premiumization
Summary
iv
Introduction
Economic factors
Consumer confidence is still low
Personal income has been hit by the recession
Alcohol spending is lagging behind incomes in developed markets
Spending on alcoholic drinks is concentrated among the wealthy
Social factors
The developing world middle class is poised for massive growth
Middle-class values support premium alcohol purchasing
‘Luxury’ products are increasingly available to mass consumers
Psychological factors
Individualism presents a valuable marketing target
The importance of descriptors
Three key attributes are associated with premium alcohol consumption
Ego gratification
Pleasurable experience
Educated choice

Chapter 4 Premiumization through product
attributes
Summary
Introduction
Pleasurable experience
Enhanced taste
Unique flavors and ingredients
Sensory experience
Packaging
Unique shapes and materials
Eco-friendly design
Technical innovations
Educated choice
Manufacturing process
Craft production
Organic ingredients
Health benefits

Chapter 5 Premiumization through brand
attributes
Summary
Introduction
Ego gratification
v

Exclusivity
Brand name
Endorsement
Self-expression
Educated choice
Brand story
Authenticity/provenance
Value for money
Private label
Ethical values

Chapter 6 The evolution of premiumization
strategies
Summary
Introduction
Case study 1: Courvoisier-Repositioning by leveraging brand heritage
Case study 2: Cîroc - Reviving growth through celebrity endorsement
Case study 3: Jameson Irish whiskey – Focus on ‘younger’ on-premise
consumers
Case study 4: Russian Standard – Global expansion based on heritage and
craft
Case study 5: Dos Equis – Inspiration through advertising
Case study 6: Heineken and Samuel Adams – Maturity leads to loss of cachet
Heineken
Samuel Adams
Case study 7: Patron tequila – Creating a super-premium niche segment
Case study 8: Svedka –Offering quality for a lower price

Chapter 7 Future outlook
Summary
Introduction
Volume growth and premiumization will clash
Continued lagging in on-premise sales
Re-creating on-premise experiences at home
Enhancing the on-premise experience
The consumer focus will shift towards value for money
Self-expression will partly displace conspicuous consumption
‘Cheap chic’ will gain momentum
The democratization of luxury has devalued ‘premium’
Delivering on brand promise
China and India offer opportunities, but present major obstacles
vi
Appendix
Index
References

List of Figures

Figure 2.1: The evolution of premiumization
Figure 2.2: Value and volume growth in the global alcoholic drinks industry, 2004-09
Figure 2.3: Global alcoholic drinks price growth by category, 2004-2014
Figure 2.4: Global alcoholic drinks volume growth versus price growth, 2004-2009
Figure 2.5: On-premise and off-premise category trends, 2004-2014
Figure 2.6: Share of upscale launches as % of total alcoholic drinks launches, 2006-2009
Figure 2.7: Sector share of upscale alcoholic drinks launches (%,) 2006-2009
Figure 3.8: Key consumer drivers of premiumization
Figure 3.9: Consumer confidence 2006-2010
Figure 3.10: GDP at purchasing power parity (PPP) in $ per capita, selected major economies,2004-2014
Figure 3.11: US alcoholic beverages over/under-spending by household economic status, 2009
Figure 3.12: Trends in global middle class growth
Figure 3.13: Maslow’s hierarchy of needs
Figure 3.14: How the hierarchy of needs determines consumption behavior
Figure 3.15: How the trend towards individualism encourages premium product consumption
Figure 3.16: Key attributes of upscale alcoholic drinks launches, 2006-2009
Figure 3.17: Key product attributes in upscale alcoholic drinks launches, 2006-2009
Figure 3.18: The three key attributes associated with premium alcoholic drinks consumption
Figure 3.19: Ego gratification product attributes in upscale alcoholic drinks product launches, 2
Figure 3.20: Naked Chase Pure English apple vodka from Chase Distillery
Figure 3.21: Aka Budo variant of TaKaRa Oishii Chu-Hi from Takara Shuzo
Figure 3.22: Jefferson’s Presidential Select Bourbon from McLain & Kyne Ltd
Figure 3.23: Pleasurable experience product attributes in upscale alcoholic drinks product launches, 2009
Figure 3.24: L'Amateur David Leclapart Champagne and The Glenlivet XXV Scotch whisky
Figure 3.25: Educated choice product attributes in upscale alcoholic drinks product launches, 2
Figure 3.26: Zaya Gran Reserve Rum and Finsbury Grain Vodka
Figure 4.27: Product-level aspects of premiumization
Figure 4.28: Belvedere Intense vodka from Moët Hennessy and Ravenswood Winery’s slogan
Figure 4.29: Samuel Adams Utopias
Figure 4.30: 10 Cane rum and Tanqueray Rangpur
Figure 4.31: Bulldog gin
Figure 4.32: ORO Brut Reserva Cava and Gold POP Disco
Figure 4.33: O2 sparkling vodka and Krait Prestige champagne lager vii
Figure 4.34: Le Rituel par Christian Louboutin de Piper-Heidsieck
Figure 4.35: U'Luvka vodka, Crystal Head vodka, Absolut Masquerade vodka and Solerno Blood
Orange liqueur
Figure 4.36: Summer Draft beer
Figure 4.37: Stella Artois pouring ritual and glass
Figure 4.38: Veuve Clicquot DesignBox and Full Circle wine in a plastic bottle
Figure 4.39: Coors Light cold activated can from MillerCoors
Figure 4.40: Ty Ku liqueur
Figure 4.41: Tito's Handmade vodka
Figure 4.42: Hendrick’s gin and Pur Spirits
Figure 4.43: Last Drop Finest Aged 1960 Blended Scotch Whisky
Figure 4.44: Prairie Organic vodka and Purus vodka
Figure 4.45: Benromach Speyside organic single malt scotch
Figure 4.46: Biodynamic Beta-Delta wine
Figure 4.47: Stampede Light Plus and Select 55 beer
Figure 4.48: White Lotus vodka
Figure 5.49: Brand-level aspects of premiumization
Figure 5.50: Suntory The Owner’s Cask
Figure 5.51: Glenmorangie Single Malt Scotch Whisky varietals
Figure 5.52: Blackbird Vineyards’ wines
Figure 5.53: Danny DeVito limoncello and Trump super-premium vodka
Figure 5.54: Celebrity Cellars wines
Figure 5.55: Johnnie Walker Striding Man Society
Figure 5.56: Three Olives vodka
Figure 5.57: Colorado Native beer and Snap Tag
Figure 5.58: Nuvo L'Esprit de Paris sparkling liqueur and p.i.n.k vodka
Figure 5.59: Thomas H. Handy Sazerac rye whiskey
Figure 5.60: Double Cross vodka
Figure 5.61: Sam’s Club Rue33 vodka and Costco’s Kirkland tequila
Figure 5.62: Rodney Strong sustainability practices
Figure 5.63: 360 vodka
Figure 5.64: Stiletto Vodka
Figure 6.65: Pass the Courvoisier record cover
Figure 6.66: Courvoisier the future 500
Figure 6.67: L’Essence de Courvoisier
Figure 6.68: Courvoisier Exclusif and Courvoisier cocktails
Figure 6.69: Le Nez de Courvoisier at Charles de Gaulle airport
Figure 6.70: Sean Diddy Combs for Cîroc
Figure 6.71: Cîroc advertisements and Cîroc Nights on Facebook
Figure 6.72: Jameson Irish Whiskey
Figure 6.73: Jameson outdoor projection advertisement and television advertisement
Figure 6.74: Jameson silver bottle
Figure 6.75: Russian Standard bottles
Figure 6.76: Russian Standard beauty pageant promotion
Figure 6.77: Russian Standard Nightlife Tour promotion
Figure 6.78: Dos Equis “Most Interesting Man” advertisement
Figure 6.79: Dos Equis Most Interesting Man online and Dos Equis Most Interesting Academy
Figure 6.80: Heineken Draught Keg
Figure 6.81: Heineken television commercial, 2010
Figure 6.82: Sam Adams lager
Figure 6.83: Patron tequila range
Figure 6.84: Patron travel retail display viii
Figure 6.85: Svedka vodka bottle and advertising
Figure 7.86: Forecast value and volume growth in the global alcoholic drinks industry, 2009-2
Figure 7.87: Global alcoholic drinks forecast volume growth versus price growth, 2009-2014
Figure 7.88: Global alcoholic drinks forecast on-trade volume sales (liters of pure alcohol m), 2009- 2014
Figure 7.89: Perrier-Jouet sensitive journey
Figure 7.90: Examples of ready-to-drink alcoholic beverages
Figure 7.91: Perrier-Jouet champagne bar
Figure 7.92: Dewar’s craftsmanship
Figure 7.93: Courvoisier connoisseurship
Figure 7.94: Gran Tierra Chilean wine
Figure 7.95: Jack Daniel’s advertisement
Figure 7.96: Wenjun white spirits

List of Tables

Table 2.1: Global alcoholic drinks market value & value forecast by country, ($bn), 2004-2014
Table 2.2: Global alcoholic drinks market volume & volume forecast per category, liters pure alcohol (m), 2004-2014
Table 2.3: Global alcoholic drinks market share of throat by category (liters pure alcohol), 2004- 2014
Table 2.4: Global alcoholic drinks average pricing and weighted pricing growth ($/liter alcohol), 2004-2014
Table 2.5: US spirits market premiumization and growth (%), 2007-2009
Table 2.6: Global beer segment share of throat (% by volume), 2004-2014
Table 2.7: Region share of upscale alcoholic drinks launches (%), 2006-2009
Table 2.8: Sector share of upscale alcoholic drinks launches (%), 2006-2009
Table 3.9: Alcoholic drinks spending as percentage of GDP, by country (%), 2002–2012
Table 3.10: Middle class population size (m) & share of global total (%), 2009-2030
Table 3.11: Top 20 descriptors in upscale alcoholic drinks launches (%), 2006-2009
Table 3.12: Top 10 fastest growing descriptors in upscale alcoholic drinks launches (%), 2006- 2009
Table 4.13: Selected examples of process claims in premium products
Table 5.14: Selected examples of celebrity-endorsed brands
Table 5.15: Selected examples of premium brand stories

- Courvoisier
- Cîroc
- Jameson Irish whiskey
- Russian Standard
- Dos Equis
- Samuel Adams
- Heineken
- Samuel Adams
- Patron tequila
- Svedka

Note: Product cover images may vary from those shown

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