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Dark Rum, Cognac and Brandy - UK - April 2009
Table of Contents

Issues in the Market

Future Opportunities

Cultivating cocktails

RTD possibilities in the off-trade

Endorsement works

Something from the trolley, sir?

Finding the right mix

That’s not my name…

Stimulating use

Cognac image boost?

Pushing provenance and authenticity

Market in Brief

Mojito momentum

Sales fall in real terms

Brandy/Cognac takes bulk of sales

An ageing customer base

Recent growth in off-trade sales driven by deals and duties

Price rises to hit European brandies

Major spirits players fight it out

Off-trade growth reflects general trends in market

Key to future is increasing ways that dark spirits are used

Internal market environment

Key points

Easy on the sauce

‘Vodka fatigue’ setting in?

A drop of the good stuff

Consumers watching their waistlines

Heavy discounting in the off-trade

Pubs going out of business

Link between brandy, gin and vodka drinkers

Cocktail crowd prime target market for dark spirits

Shaken not stirred

Spirit of the Caribbean

Never show your true age

Shrouded in mystery

Broader Market Environment

Key points

Here come the boys

‘Haves’ and ‘have nots’ up and down

Alcohol excessively dutiful

Failing harvests squeeze producers

Phylloxera subsidies phased out

Competitive Context

Key points

Dark spirits in context

A fluid market

Cider points the way?

Connecting to food

The vodka juggernaut

Flavoured possibilities?

Cocktail base

Potential for premium power in rum and brandy

Strengths and Weaknesses in the Market

Strengths

Playing the heritage card
Boost from gifting and special occasions
Financial muscle counts
Colour gives possibilities
Aspirational element to products
Tremendous latent potential

Weaknesses

At the mercy of the elements
New money threatens low yield markets
Brandy becomes less competitive on price
Vulnerable to competition?
An old-fashioned image…
…and reliance on older consumers
Ad budgets need a boost

Who’s Innovating?

Key points

Short measures in product launches

In pursuit of the premium dream

Techniques of the Caribbean

Premium from the inside out

Showing your age

Make me look younger

The golden age of colour

Own label delivers value

Global trends

Sweet and clear
Some like it hot
For ladies that latte

Market Size and Forecast

Key points

Engine of growth loses momentum

Future of the market

Factors used in the forecast

Segment Performance

Key points

Rum stars as Cognac misses out on seasonal boost

Brandy (excluding Cognac and Armagnac)

Subsidies withdrawal to push up prices

Recession prompts launch of budget products and downtrading

Cognac and Armagnac

Cognac misses out on traditional festive bonanza

Discounting prevalent

Own label gets in on the act

VS Cognacs dominate

Brand owners try to encourage wider use

Manufacturers try to build pub business

Dark rum (excluding golden rum)

A shift in attitudes

Still plenty of scope for growth

Golden rum

Cocktail culture and provenance driving sales

Own-label penetration to grow?

Channels to market

Key points

Off-trade grows as on-trade fades

Brandy

Cognac/Armagnac

Dark rum

Golden rum

On-trade issues

Off-trade issues

Market Share

Key points

Key brand analysis

Three Barrels outperforms brandy sector

Three Barrels (First Drinks)
Other brands
Own label
On-trade market shares

Fortunes of Cognac/Armagnac sector dictated by major VS brands

Courvoisier (Beam Global)

Martell (Pernod Ricard)

Remy Martin (First Drinks)

Own-label

On-trade market shares

Golden variants driving rum market growth

Morgan’s Spiced (Diageo)

Captain Morgan (Diageo)

Lamb’s Navy Rum (Halewood International)

Morton’s OVD (First Drinks)

Mount Gay (First Drinks)

Other brands

Own-label

Companies and Products

Brand map

Bacardi-Martini

Beam Global

CL World Brands

Diageo

First Drinks Brands

Halewood International

LMVH

Pernod Ricard

J Wray and Nephew

Others

Brand Elements

Brand map

Courvoisier

What the brand is trying to achieve

What the consumer thinks

Captain Morgan

What the brand is trying to achieve

What the consumer thinks

Three Barrels

What the brand is trying to achieve

What the consumer thinks

Havana Club

What the brand is trying to achieve

What the consumer thinks

Brand qualities of dark rum and brandy brands

Courvoisier most authentic

Experience of dark rum and brandy brands

Courvoisier most recently drunk, but Captain Morgan joint most tried

Brand intentions for dark rum and brandy brands

Courvoisier, Rémy Martin have highest retention

Brand momentum for dark rum and brandy brands

Lamb’s Navy losing most ground, others mainly gaining

Brand satisfaction for dark rum and brandy brands

Rémy Martin has highest excellent satisfaction

Brand commitment to dark rum and brandy brands

Courvoisier, Rémy Martin have most loyal customers

Round up

Brand Communication and Promotion

Key points

Education leaves rum stranded

Morgan’s spices up the seasons

Shaking up Christmas cocktails

Waving the West Indies flag

Cognac tops the ad bill

Remy goes for the heart

Modern Martell for loyalists

Hennessey for the luxury lifestyle

Rum and brandy are good sports

The Consumer – Frequency and Usage of Rum

Key points

Rum holding its own

Rum must beware migration towards less frequent drinking

There go the girls

The Consumer – Frequency and Usage of Brandy

Key points

Brandy in danger of being abandoned

Luxury with traditional northern roots

Brandy champions for women

The Consumer – Attitudes towards Dark and Golden Rum

Key points

(Dark) rum leaves a bad taste in the mouth

Young palates put off by rum

Rum falls off the radar

Rum is all at sea

The Consumer – Attitudes towards Cognac and Brandy

Key points

Brandy is in poor taste

Women turned off by taste

Ditch the fuddy duddy image

Snob value reserved for after dinner occasion

The Consumer – Target Groups for Dark and Golden Rum

Key points

Targeting the consumer attitudinally

Mixing Enthusiasts (12%)

A rum deal (88%)

The Consumer – Target Groups for Brandy and Cognac

Key points

Purists (10%)

A celebration tipple (10%)

Turned off (81%)

Appendix

Consumer research

ACORN

Advertising data

Abbreviations

Appendix – Internal Market Environment

Appendix – Who’s Innovating?

Appendix – The Consumer: Frequency and Usage of Rum

Appendix – The Consumer: Frequency and Usage of Brandy

Appendix – The Consumer: Attitudes to Dark and Golden Rum

Appendix – The Consumer: Attitudes to Cognac and Brandy

Appendix – The Consumer: Typologies