Market Watch, April 2016

Demand for cocktails is exploding and yet the liqueurs category is shrinking This puzzling anomaly is partly due to the rise of flavored vodkas and whiskies as well as the advent of whisk e y based liqueurs Positioned somewhere between full fledged spirits and low alcohol liqueurs these hybrid products are intended for mixing The runaway successes of Fireball Jack Daniels Tennessee Honey and Wild Turkey American Honey have helped to blunt traditional liqueur sales in some on premise establishments Also putting a damper on sales are mixologists like Ashley Resa the 26 year old beverage manager at the six unit Porkchop restaurant and bar chain in Chicago Resa uses few commercial liqueurs We make every thing in house she says expressing the locavore leanings of many young mixologists A fresh squeezed shot of flavor tastes better and customers appreciate the effort Other bars in my market are doing the same thing For its brunch cocktails Porkchop washes Jim Beam Maple whiskey with bacon fat to make the McGriddle 10 Resa also infuses Angels Envy Bourbon with green apples and cinnamon sticks 5 a 2 ounce pour Her Rock Rye 12 features Templeton rye whiskey house made lavender bitters and rock candy while the Meet Your Maker 13 mixes Makers Mark 46 Bourbon passion fruit and lime juices and basil Theres hardly a liqueur on the menu My generation wants infusions Resa says Still StrongLast year eight of the top 10 liqueur makers showed sales declines No 2 player Jägermeister was off almost 9 percent to 177 million nine liter cases while No 4 Southern Comfort was down 7 percent to 104 million cases according to Impact Databank Volume for the top 10 brands decreased by an aggregate 28 percent to 97 million cases Nonetheless liqueurs remain formidable Sales last year totaled 19 million cases not far behind Bourbon and Tennessee whis keys total of 195 million cases according to Impact Databank The Distilled Spirits Council of the United States pegs the categorys revenues at about 24 billion annually behind only vodka 58 billion and Bourbon 29 billion Overall liqueurs outsell rum 23 billion Tequila 23 billion and Scotch 21 billion in the United States Beam Suntory markets category leader De Kuyper 13 to 15 a 750 ml bottle and senior marketing director Brendan Lynch concedes that new products like Fireball have probably hurt us in some states where dark spirits are increasingly being consumed neat and not in cock tails He adds that high end bars mixing their own flavor infusions are not really De Kuyper bars We do better in a large chain like TGI Fridays where bartenders are mixing drinks in volume To keep sales flowing Beam Suntory is continually conjuring up new recipes including some developed through bartender contests These are posted on De Kuypers website as part of The Cocktail Project which Lynch says gets more than 100000 visitors a month Drinks include the Pumpkin Butter Martini which calls for Pinnacle Pumpkin Pie vodka De Kuyper Buttershots Schnapps and apple cider In store promotions meanwhile feature the Game Day Peach Sour a combination of Makers Mark Bourbon De Kuyper Peachtree Schnapps and a splash of sour mix At Sidney Frank Importing Co chief marketing officer Marcus Thieme likens Fireballs rise to the emergence of Jägermeister back in the 1990s He fears that Jägermeister 20 a 750 ml bottle hasnt caught on with the millennial generation Our 50 MARKET WATCH MARKETWATCHMAG COM APRIL 2016Liqueurs are still important Tyson Buhler from New York Citys Death Co pictured makes the St Hubertus Key cocktail with Jägermeister While mainstream liqueurs face challenges from competing products and iconoclastic mixologists the category remains formidable BY H LEE MURPHYIN TRANSITIONMW0416_