Whether you’re a bar manager, owner of a licensed premises, or an independent liquor retailer, there’s one trend you’ve surely noticed – customers are looking for high-quality. Premiumisation is arguably the most significant trend influencing the global alcohol market, and Spirits Platform is uniquely placed to help your business profit from it.
But first, the basics.
What exactly is premiumisation?
Not exactly sure what it means? Don’t stress! Let us explain – premiumisation in the alcohol industry refers to creating deluxe experiences for customers through luxury liqueurs and spirits, high-end cocktail recipes and exclusive events. Customers in Australia have been expecting more premium offerings for a while now, searching out beverages with more unique flavour profiles, high-quality ingredients and more appealing packaging.
Simply put, although customers are drinking less overall, when they do drink they’re drinking better quality liquor. Premium liquor offers a touch of affordable luxury, making a night at home or a night out even more special.
Why is there a focus on premium liquor?
Any veteran of the alcohol industry knows that premium drinks have been on the market for centuries – but what’s with the sudden increase in consumer interest in these premium brands in recent years?
Although premium wine has long been appreciated, we really only started to see the public interest in premium alcohol grow after the interest in craft beer went mainstream. In fact, we can attribute most of the recent growth in premium alcohol to beer and spirits, as consumers have become more open to trying new drinks. Market analysis done by IWSR Drinks has found that interest in premium alcoholic beverages will increase by 13% by 2024, whilst data analysis done by GlobalData estimates that at least 40% of the population purchases a luxury spirit at least on an occasional basis. So now we come to the question of why?
There are actually a lot of reasons that consumers are interested in premium products in recent years, some of them include:
- Younger drinkers are 54% more likely to select a premium drink. Although it may come as a surprise, when we compare the demographic of 18-34 year olds to 55+, we find only 35% of those aged over 55 are looking to purchase premium alcohol. This likely stems from a millennial desire for authentic brand experiences and ethical product sourcing – something that’s often a unique selling point of premium liquor.
- Increased interest in general health. Despite the fact that alcohol isn’t exactly healthy in any measure, consumers are interested in choosing healthier alternatives – even in their alcohol selection. We see that mainly in the demand for low-proof drinks and low-sugar beverages like the classic Italian Aperitivo, not to mention a general focus on responsible drinking.
- The pandemic. The hottest topic on everyone’s lips, the pandemic and resulting lockdowns have had an undeniable effect on the consumer’s desire for higher quality products. With people not being able to go to their local pubs, clubs and bars, more customers were buying premium drinks to enjoy at home – and despite the world opening up, it seems the trend is here to stay.
- Globally, incomes are increasing. Middle class salaries are going up, allowing customers to access more premium quality alcohol, with places like China quickly becoming the biggest market for premium wine and liquor.
- People are drinking less overall. 47% of people have reduced their drinking, and although that may sound alarming for the local bottle shop, wholesaler or licensed restaurant it actually means that people can afford to drink higher quality liquor when they do choose to drink.
Premiumisation for the alcohol industry certainly looks like a trend that’s here to stay, so with that being said, let’s have a look at three ways you can leverage the premiumisation trend to grow your business:
Tap into the thirst for authenticity
It’s hard to argue against the fact that consumers are more advertising savvy than ever before, and as a result of this, they’re interested in more authentic brands. This means that consumers want brands with rich histories, provenance and a focus on craftsmanship. Essentially, customers like companies that are transparent with them because it means they can trust that the product or service they receive is reliable, trustworthy and high quality. The food and beverage industry is no exception.
In fact, we at Spirits Platform can’t undersell how important it is for companies to showcase genuine, authentic brands. To help the businesses we work with understand the brands we distribute, we offer them the Spirits Academy. Spirits Academy is a complimentary training academy that helps you understand the stories behind the most significant and up-and-coming spirit and liqueur brands (think Cointreau and The Macallan) and their relevance to consumers today.
Interested in our Spirits Academy? Mark Hickey heads up spirits Academy with support from Josh O’Brien, Andy Buntine, and Danilo Migiorini. To learn more about Spirit Academy programs, contact Mark Hickey on 0420 941 853.
Create premium, exclusive experiences
As an independent Australian business representing a collective of family-owned brands, we understand that small businesses can sometimes struggle, especially when competing with well-known, big name venues and retailers. So premiumisation is a way that small businesses can stand out from competition by creating a meaningful experience for their customers both on and off premises.
For venues, we recommend investing in a cocktail menu with a focus on premium ingredients that will surprise and delight customers, ensuring an adventurous experience that will inspire those customers to return. Other strategies include hosting tailored consumer tasting events and brand activations, which makes customers feel like they’re a part of an exclusive community and positions your business as a premium venue.
For the off-premise space, customer tastings and unique gifts with purchase offers are great ways to create a premium experience for customers. Not to mention these are both excellent ways to drive consumer awareness for your business!
Unique premium brands in every spirit category
The trends towards premiumisation and authenticity have also led to an explosion of craft spirits producers in almost every spirit category. With this proliferation of premium brands, it’s essential to pick top performers for key categories like whiskey and gin.
Whiskies are currently booming as a category, and with more customers interested in whiskey, premium brands are getting some serious attention. Since older, high-end whiskies are increasingly difficult to source, customers are more invested in learning about and finding their next exclusive whiskey experience. And this trend isn’t limited to Scotch either – we’re seeing increased interest across the board, with customers looking for premium whiskey from all over the world (including right here in Aus!).
Despite a slow start in the craft-alcohol market, gin is currently the fastest-growing spirit category in Australia. The pandemic saw most customers reach for familiar favourites, but after drinking the same drink during lockdowns world-over, gin is experiencing an unexpected boom. And with premiumisation trending across all alcohol categories, it’s not hard to imagine that customers reaching for a bottle of high quality gin during their next stop at the liquor store or ordering a fancy gin cocktail at the bar.
The trend doesn’t stop at whiskies and gins, we’re noticing significant growth in premium beverages in other categories too, including; cognac, tequila and liqueurs. Stocking up on some premium brands across all categories is a sure way to ensure you’re creating an exclusive, exciting experience for your customers.
As the younger generations become more interested in well-crafted, premium spirit offerings, it’s important your business starts thinking about how to incorporate premiumisation into your business offering. Premiumisation is not only a great way to set yourself apart from the competition, but also a great way to learn more about the alcohol you’re selling and the incredible stories that come from these premium level brands.
Premiumisation is an opportunity for your business to find new growth opportunities. If you’re looking for a solid partner committed to helping your business thrive, please get in touch with one of our team members so we can work together to add a premium edge to your business.
Spirits Platform is a leading alcohol distributor in Australia, but the spirit in our business runs deeper than liquid in a bottle. We are an independent Australian business representing a rich collective of family-owned brands. We’re proud of our independence and passionate about the brands we represent. If you’re interested in viewing our product portfolio please head to the link below.