What’s the next big spirit? That’s the question always on the minds and lips of many spirit connoisseurs, marketers, wholesalers, mixologists and bartenders. The spirits industry is something of a fashion business, and no one wants to be left behind. The real question is: What’s the next vodka?
The bottom line: Vodka is the next vodka. It is by far the dominant spirit category, accounting for 28.9 percent of the market in 2007 on a case basis, according to the 2008 Liquor Handbook, published by Cheers parent The Beverage Information Group (BIG). To give some perspective, consider that total whiskey—American straight, American blended, Canadian, Scotch, Irish and all others combined—ranked second with 24.9 percent market share; rum was third with 13.9 percent of the market. So, it’s doubtful another category will surpass vodka’s sheer volume any time soon.
That said, some spirits are growing quickly. Irish whiskey is projected to jump 15.2 percent this year, tequila 4.2 percent, rum 2.4 percent, according to BIG analysis. Working with BIG manager of information services Eric Schmidt, along with select trend-setting and trend-tracking beverage professionals, Cheers drilled down further to identify six small but emerging spirits categories. Some of these are what we call “sliver spirits,” sub-segments of spirit categories that are growing; others are bona fide categories. What they have in common is that they’re each attracting attention and generating excitement thanks to new products with intriguing stories and unique flavor profiles.
While it’s highly unlikely any of these will ever exceed vodka’s volume, they certainly will spice things up behind the bar, driving guest interest and drink sales. If you don’t know them yet, here’s your chance.
Cachaça: Much Cachet
Highly mixable, and now benefitting from the popularity of the Mojito, rum is a darling at the bar. Beyond the well-known light rums, various expressions—rhum agricoles such as Depaz, Rhum Clément, Rhum J.M, Neisson and LaFavorite, and aged rums from Bacardi, Appleton Estate, Brugal, Flor de Caña and Cruzan, among others—are gaining popularity as guests seek new cocktail and sipping experiences. “Rum grew 4.6 percent in 2007, and we expect it to expand in 2008,” says Schmidt, who projects a 2.5 percent annual compound growth rate through 2012.
Akin to rum is Brazil’s sexy native spirit, cachaça, which is distilled from unrefined sugar cane juice. Cachaça grew 240 percent since 2002 to reach 80,000 cases, according to Schmidt, who analyzed data from the Brazilian government and suppliers. “It should break 100,000 cases this year,” he projects, noting that cachaça is the third largest spirit worldwide.
“Cachaça will benefit from the equity cocktail, the Caipirinha, much the way light rums are benefiting from the Mojito,” observes Ryan Magarian, founder of drinks consultancy Liquid Relations in Portland, Ore. “But the spirit is a bit raw, so it’s not for sipping.”
More brands and more marketing will drive cachaça, according to Noah Rothbaum, spirits writer and author of The Business of Spirits: How Savvy Marketers, Innovative Distillers & Entrepreneurs Changed How We Drink (Kaplan Publishing, 2007). There’s no shortage of either: Among the most recognizable brands are Leblon, in which Bacardi USA has an interest, Ypióca, Pitú, Cachaça 51, Água Luca and Beliza Pura, with recent splashes made by Cuca Fresca, Cabana and Sagatiba, which launched Velha, a cachaça aged two years in oak earlier this fall.
Often invoking the sensual and fun aspects of the spirit, much of cachaça marketing combines targeted promotions and grassroots efforts. Launched in 2005, Leblon, for instance, creates buzz with its “Caipirinha” music video by Jinga Boogie and its brand ambassadors. Sagatiba, which debuted in 2006, is sponsoring film and fashion events in select cities.
Christy Pope, a partner in Manhattan-based drink development group Cuff & Buttons, sees a rise in refined, premium-style cachaças. “As it’s refined for the American palate, you run the risk of taking the true character out of the spirit. But it’s also one way to get people into it.”
Gin: Style Mavens
The juniper-infused spirit that originated with the Dutch was wholeheartedly embraced by the English when the British government allowed it to be distilled without a license in the early 18th century. Gin then drove the early American cocktail scene, declined and now is on the rise again in the U.S. Schmidt cites 2007 as the second year of growth for the category, which was up 1.5 percent, and anticipates a 1.3 percent gain in 2008.
London Dry is the prevalent style, reflected in the market dominance of Tanqueray, Bombay Sapphire, Beefeater and Seagram’s, but now imbibers have a choice in what’s being called New Western Dry gins. These gins tend to be less juniper-forward, with more herbaceous and botanical qualities, and include boutique brands such as Hendrick’s, Martin Miller’s, Right and Aviation. Other emerging styles include New Amsterdam, a Dutch-style straight gin, and Plymouth, which is a Designation of Origin; the gin is made without the more bitter botanicals common in London Dry styles. In September, Bols launched Bols Genever in New York and San Francisco, a new bottling of the traditional malt-wine-based, juniper infused spirit from Holland.
“Gin is becoming stylistically diverse, and I see a turnaround in how people are thinking about gin,” notes Chad Solomon, Pope’s partner at Cuff & Buttons. “If you present it properly, and explain it, people like it! New Western Dry is an entirely new category, and it’s limitless. We can now bring new people to gin.”
Playing off tradition is Bluecoat American Dry Gin, with its juniper and citrus profile; Tanqueray Rangpur highlights Rangpur limes; Hayman’s Old Tom Gin, launched in the U.S. in September by Haus Alpenz, brings back the sweeter London Dry style with which most classic cocktails were originally created. Flavored renditions also are emerging, such as Rogue Spruce, and a truly new interpretation is G’Vine, which is grape-based.
“I’ve staked my life on the notion that gin is going to explode,” says Magarian, who is a partner in Aviation Gin. “But we have to educate the consumer and the bartender, and get out from under the false perceptions people have about gin.”
Pisco: From Peru, with Love
While Cognac manufacturers work to gain imbibers by highlighting mixability, and brandies mine their loyal fan base, our panel sees real potential for Pisco if it can draw attention. The unaged brandy migrated north from the port city of Pisco, Peru to become all the rage in San Francisco, but when a political uprising in Peru in 1968 caused production to cease, Pisco essentially disappeared from the U.S. drink scene. That is, until entrepreneurial distillers in both Peru and Chile jump-started the industry in recent years, and brands began making their way north again.
“Pisco has a great history and great cocktails, but it needs a big marketing push for people to understand what it is,” says Rothbaum.
Such a push is on, at least from Barsol, one of almost a dozen Peruvian Piscos now exported to the U.S. While much of the brand’s marketing is grass roots, Barsol and other labels are benefiting from what Magarian calls Pisco’s “equity cocktail,” the Pisco Sour. “That drink is just the tip of the mixability iceberg for this spirit,” he says. “You can mix infinitely with Pisco, but you have to understand it first.”
Peruvian Pisco must be pot distilled, bottled at the proof at which it comes off the still and only can involve seven grape varieties. Chilean Pisco is mass produced and therefore less expensive, although the popular Pisco Control from Chile does offer a premium aged Pisco, Guarda. “Pisco has great aromatics, but it also has a great story and ties into the local angle that everyone looks for today,” notes Pope.
Rye: A Resurgence
Straight whiskey sales rose for the sixth consecutive year in 2007, reaching 14.7 million 9-liter cases. Interest in special bottlings, small batch and single barrel offerings of the all-American spirit continues to grow, as does interest in whiskey cocktails.
Rye whiskey generated sales of only 50,000 cases, according to BIG estimates, but is lauded as one of the most exciting things in whiskey today. Driven by interest in the original preparation of the Old Fashioned, Manhattan, Sazerac and other classic cocktails, sales of the soft, smooth and often spicy spirit are growing. Rye’s flavor is derived from its mash abill, which must be at least 51 percent rye (for bourbon, it must be at least 51 percent corn). BIG’s Schmidt sites control state data that reveals rye sales are up 30.7 percent in that market in 2007, with Beam, Old Overholt, Templeton and Wild Turkey posting gains.
“Rye was extinct, and now there are more brands on the market and in the pipeline, which is so exciting,” says Solomon.
In cocktail-centric New York City, Chicago and San Francisco, brands such as Buffalo Trace’s Sazerac Rye and Heaven Hill’s Rittenhouse are enjoying renewed popularity among mixologists. Wild Turkey’s late 2007 introduction of Russell’s Reserve Rye, which is aged six years, caused a stir, according to the brand’s global director at Pernod Ricard USA, Andy Nash. “We take what Jimmy and Eddie Russell do and add a year, bringing proof down to 90, which make it a more approachable product,” he says.
“Rye is spicier, dryer and has more character, so it really has potential, but the growth will really be mixology driven,” observes Magarian.
“Rye is back and it won’t disappear again,” observes Rothbaum. “Its popularity is part of the return of American boutique whiskey makers, and it will only get more interesting. Time was when distillers only made rye two days out of the year. Those days are over.” Whiskey fans are savoring the current offerings and eagerly awaiting new releases and new renditions, such as Beam Global’s ultra-premium (ri)1, which has been tasted in select cities.
Liqueurs: Call of the Wild
Overall liqueur sales were down in 2007, but certain brands are making noise and BIG’s Schmidt expects an uptick for the category this year. “There’s been a shift in the types of flavors coming onto the market,” he says. The inclusion of Pomegranate and Red Apple in the DeKuyper line, the seasonally-inspired Pumpkin Spice addition to the Hiram Walker family and the exotic Açaí Berry addition to the Bols portfolio marks a new direction, as do numerous new brand introductions.
“There’s clearly an incredible market for unique flavors, as demonstrated by St-Germain,” says Magarian, referring to the elderflower liqueur that launched in 2007. “Brands like that are bringing intense flavors to the mass market, and bartenders are really innovating with them.”
Forty-three liqueurs launched in 2007—35 in 2006—and many newcomers are making headlines. On the Asian-inspired front are ginger-flavored Domaine de Canton, Soho Lychee Liqueur, Zen Green Tea Liqueur and sake-based Ty Ku. Cream liqueurs making their debut in recent years are Café Boheme, which blends vodka, coffee and cream, and the truly unique Castries Peanut Rum Creme. Spirit-based liqueurs attracting new attention include Castle Brands’ Celtic Crossing, a blend of Irish whisky, Cognac and honey, and the only bourbon-based liqueur, Wild Turkey American Honey, which relaunched under its new name and package last fall. Heaven Hill’s Pama Pomegranate Liqueur was an instant hit when it launched in 2006, and antioxidant-packed açaí berry now is finding its way into liqueurs such as Veev Açaí. On the specialty front, offerings range from Danny DeVito’s Limoncello to Vermont Organic Maple Liqueur and Faretti Biscotti Famosi Liqueur. Cointreau Noir, which blends sweet and bitter orange with Rémy Martin Cognac, debuted in July, positioned to be enjoyed neat or on ice.
“There’s a lot of room for more artisanal, handcrafted, not-as-sweet liqueurs, especially those that get to the essence of the fruit or other ingredients,” says Pope.
Welcome Back: Absinthe Returns
When absinthe was deemed legal in the U.S. in May, 2007—it was banned in 1912 for its supposed hallucinogenic effects—a collective exclamation of joy went up from cocktail geeks nationwide. The high-proof spirit involving grand wormwood was hailed as a crucial missing piece in the classic cocktail repertoire. While much is written about the resurrection of the absinthe drip and how to set up the perfect la louche, as well as cocktails including the absinthe-and-Champagne drink known as Death in the Afternoon, the real big news is the influx of absinthe brands.
An estimated 24 absinthe brands hit the market in the past 18 months. Brands such as Lucid, Pernod and La Fée are in the traditional, anise-forward style, while labels including Mata Hari reflect the more mixable, bohemian style. An additional seven absinthes are expected to launch in the next few months.
“Absinthe is definitely on the table again. It’s a truly unique product that requires education of guests and bartenders,” notes Pope. “The market is being flooded with brands, which is good because it draws attention, but there will ultimately be a shakeout.”
“When I give radio interviews, people always call in and ask about absinthe—what it is, whether it will really make them hallucinate,” observes Rothbaum. “There’s so much interest in it and its history; there’s a lot of education needed on absinthe, which is actually a great opportunity for bartenders.”