THE METEORIC RISE OF CRAFT SPIRIT
Author: Katie Warner
I went into my local bar the other evening and ordered a gin and tonic. Rather than being offered a choice between Gordon’s or Beefeater, I was handed a menu complete with tasting notes, an armful of different options to tantalise my taste buds, even with recommendations for accompanying tonic water. The craft spirit revolution is here and hard to ignore. It has literally ‘infused’ every marketplace from local pub, bar and club to farmers markets & supermarkets, both urban and rural, with new distilleries sprouting up everywhere. Most noticeable are the gins, but there are also new whiskies, vodkas, rums, tequilas and brandies appearing on the market every year. The majority of craft spirit brands are priced in the premium bracket with the ‘drinking less but better’ consumer trend being adopted. Following on from the craft beer explosion of the last 10 years, the craft spirits category is ascending swiftly to meet the growing demand for something more authentic and individual. Millennials, those born between 1980 and early 2000 are the driving force behind the growth, seeking to define themselves by more niche, higher quality brands with an interesting story, rather than affiliating themselves with the bigger brands of their parents era, brands that have previously lacked the emotional connection they look for nowadays.
Whereas traditionally cognac and whisky were the drinks of choice at the ‘super premium’ end of the market, now we see emerging spirits categories such as tequila, rum and newly mezcal (all previously regarded as under-premiumised spirits) adopting traditional codes of luxury and succeeding in blurring the frontiers between categories, giving them the opportunity to gain market share. In response, Cognac houses have released a clear ‘white Cognac’ to entice the millennial generation and encourage Cognac as a mixing spirit. Reinvention is the order of the day. Future focus will be on scarcity from the blending of rare liquids, experimentation with new toasted oak ageing techniques, vintage batches and smaller producers releasing single cru bottlings to show terroir distinction. Creation of yet another limited edition lead crystal decanter for a ridiculous sum of money is no longer justifiable, nor desired.
Consumer needs and expectations have taken a shift, the average drinking crowd these days is developing a sophisticated palette with a preference for unique tastes. They’re far more aware of what it is they’re drinking and want more knowledge about the product they’re consuming. Craft terms like ‘aged,’ ‘craft,’ ‘artisan’ or ‘small batch’ are useful to consumers as status indicators, but ultimately they need to be backed up by specifics, they need to be believable. Today’s savvy consumer is less likely to have the wool pulled over their eyes, no matter how exquisite the label is. Brand strategy and storytelling is now more important than ever.
With both the craft spirit and craft brewing sectors going through a period of explosive creativity, it has been no wonder that the global drinks giants are somewhat worried. The best way they have found to deal with the situation is to buy the success stories out – Sipsmith Gin bought for an alleged £50m last December by Beam Suntory as well as George Clooney’s Casamigos entering Diageos portfolio for a whopping $700 million. Many of the new distilleries won’t survive, be it for lack of differentiation or inability to adapt to market and scale up to meet demand.
For brands to ensure they stand out in such a saturated market and not become lost among the crowd, the answer lies certainly in innovation, in looking at what isn’t on the market yet or what could be done better. For instance by producing limited editions, selling in authenticity, heritage and provenance. Brands need to better understand their environments in order to thrive. There’s no ‘one size fits all’ methodology in the luxury market. Ultimately it’s a question of understanding the motivations behind the consumer that will make the difference. What constitutes ‘stand out’ for a British customer may be different for an Asian, African or Russian consumer. Haines McGregor’s skills lie in consumer intelligence and insight, in uncovering the underlying motivations of the consumer and bringing to life creatively the uniqueness of the brand. We have worked strategically and creatively for many years within various spirit and beer sectors to create engaging brands that connect emotionally with audiences.