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Market Research Report

Premiumization Strategies in Alcoholic Drinks: Innovating to drive value through brand and product enhancement

Published by	Business Insights
Published	June, 2010	Product code	124790
Content info	Pages: 161
Price	US $ 2875 PDF by E-mail (Single user license) US $ 10782 PDF by E-mail (Global license)

Introduction
Related Reports

Premiumization Strategies in Alcoholic Drinks: Innovating to drive value through brand and product enhancement published by Business Insights in June, 2010. This report consists of Pages: 161 and the price starts from US $ 2875.

Introduction

Abstract

The premium segment of the alcohol market was a major driver of growth in the past, as mass market consumers traded up, and affluent individuals sought super premium products. The recession has had an impact on both the segment and the overall market, challenging marketers to maintain and grow their brands. Behaviour has changed, with some consumers trading down, and many drinking more at home than in bars, restaurants and clubs. Yet consumers continue to desire and purchase premium alcohol drinks. And marketers continue to differentiate their premium brands through product, package and branding initiatives. This report provides an understanding of the growth and importance of premium alcohol, effective brand differentiating strategies that enabled growth, and what marketers need to do, in a challenging and competitive market, to drive consumers to their premium brands.

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
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
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: Ciroc - 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

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, 2009
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, 2009
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 Moet 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
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 Ciroc
Figure 6.71: Ciroc advertisements and Ciroc 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
Figure 6.85: Svedka vodka bottle and advertising
Figure 7.86: Forecast value and volume growth in the global alcoholic drinks industry, 2009-2014
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