As it’s the 10th anniversary of The Power 100, we decided to sift through the masses of data collated over the years and provide a retrospective look at the top trends over the last decade. It has been a period epitomised by transformation
in the drinks industry and this can be examined under four broad categories: globalisation, consolidation, the recession and innovation. Each category exemplifies a key trend that has led to increased competition and value in the
wine and spirits industry as a whole.
Whilst alcohol has had a global presence for centuries, the influx of trade treaties and multinational companies over the last 10 years has aided in the commercialisation of alcohol brands and played a large part in the proliferation of local brands entering the global market.
Brands such as Jägermeister, Grey Goose and Russian Standard Vodka all began as regional brands that gained momentum through various distribution deals and acquisitions and have grown exponentially to become the international brands we now see the world over.
Vodka and gin brands have particularly benefitted from this globalisation, due to the relatively short time it takes to distil the spirit. This has contributed to a saturated vodka market and a reduction in premium pricing for brands such as Smirnoff and Absolut, who are now competing with newer brands like Cîroc and Skyy.
A direct consequence of globalisation was the move towards consolidating the market, resulting in a spate of large international mergers and acquisitions occurring over the last decade. This saw some of the leading brand owners including Fortune Brands, Allied Domeq and more recently Beam Global being acquired to create drinks brand powerhouses such as Pernod Ricard and Beam Suntory.
These global drinks firms have the resource and finance to grow, develop and manage an array of wine and spirits brands, which has increased the number of firms with brands in every major drinks category, rather than a series of smaller
independent brand owners. This is highlighted by the fact that Diageo, Pernod Ricard, Bacardi Martini and Beam Global/Beam Suntory have dominated the brand owner leader board over the last decade.
The global recession had a profound impact on the drinks industry between 2008 and 2011. Every company and brand was affected by the depressed economy and the resulting changes in consumer behaviour. The top 10 saw dramatic losses
in terms of total score, with Johnnie Walker, Bacardi, Hennessy and Absolut all amongst the biggest fallers in the Power 100, 2010.
But through adversity comes opportunity and many brands were able to capitalise on the stagnant market and attract consumers with attractive value propositions, including Eristoff, Svedka and Russian Standard.
Finally, innovation became a key theme within the mature white spirits sector - vodka, gin and white rum struggled to compete with the more fashionable dark, aged spirits. Innovation came in the form of flavoured variants with Smirnoff extending their existing flavours range with more unusual combinations such as white grape, caramel kiss and fluffed marshmallow and Gordon’s Gin introduced Gordon’s Crisp Cucumber and Gordon’s With A Spot of Elderflower.
Whilst flavoured variants were already common brand extensions for white spirits, dark spirits and liqueurs are also testing the waters the likes of Jack Daniel’s Honey, Jägermeister Spice and Captain Morgan Spiced rum.
What does the future hold?
In the last 10 years our panel of experts have provided a wealth of knowledge and insight into the wine and spirits industry, and as we look to the next 10 years, we asked them what trends they expect to see. Here are some of the topics and trends they highlighted:
- Irish and American whiskey to capture market share from Scotch whisky
- China’s growth will moderate
- Latin America will offer the biggest opportunity for growth
- Beam Suntory, Campari and Proximo Spirits are expected to acquire more brands
- More innovation as sophisticated consumers widen their repertoire
- More brands will target the female demographic