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“2009 was not a good year for multinational companies. The 2010 Millionaires ranking saw total volumes of international brands on the list fall by 5% while domestic/local brands saw growth of 6%, selling over 400 million 9-litre cases.” says Euromonitor International senior alcoholic drinks analyst, Jeremy Cunnington.
Click here to download a complimentary copy of the Millionaires Club 2010 supplement.
The Millionaires supplement is a ranking of spirits with sales of over one million 9-litre cases across all retail channels. In the third year of Euromonitor International’s Millionaires research, the 2010 list includes a record breaking 162 brands.
The 2010 listing continues to gain new breadth and depth with 17 new brand entries, including brands from Colombia, Turkey and most notably the soju producers of South Korea. It also shows the strength and power of spirits consumption in Asia-Pacific as domestic/local brands on the list, which are almost entirely sold in the region, accounted for over 40% of total brand volumes.
As predicted in last year’s supplement, international brands performed poorly in 2009. Due to the effects of the recession, consumers’ trading down and the decline of on-trade consumption, total volume sales of international brands on the list has fallen. Pernod Ricard remains the company with the most brands on the Millionaires list despite losing two from the 2009 list – Presidente brandy and, more surprisingly, Luksusowa vodka.
However, two of its stand-out brands were Indian whiskies which continued to benefit from a rapidly growing category and a booming Indian economy. Second-placed United Spirits increased the number of brands on the list up two to 19 with its Bagpiper Indian whiskey becoming the leading whiskey brand in the world.
Diageo sits in an increasingly distant third place with 14 brands (down one) with only two of its rum brands benefiting from strong growth in its core markets (North America for Captain Morgan, Venezuela for Cacique) along with Bells in the UK. Bacardi continued to suffer from its over-reliance on a limited number of major markets, specifically in the US and Spain, with only two of its brands, Eristoff vodka and William Lawson blended scotch, recording growth.
While the picture painted in volume terms in 2009 was relatively bleak for international brands, 2010 is likely to be far more positive, due to the emerging markets of Latin America, Asia-Pacific and Eastern Europe. According to Jeremy Cunnington, “Signs of economic recovery in the first half of 2010 will undoubtedly help international brands bounce back.
However, many core markets for these brands, especially in Western Europe, could still hold back growth as governments and consumers continue to restrict spending to reduce their high levels of debt”.
Click here to download a complimentary copy of the Millionaires Club 2010 supplement:
The Drinks International Millionaires Club is an annual listing of distilled spirits brands with sales of a million 9-litre cases or more but differs from Euromonitor International’s research in that it includes sales in all channels, such as duty free/travel retail.
Research is conducted independently by Euromonitor International and brands are classified under the following guidelines: Domestic/local (90% or more of volumes sold in a particular country); Regional (80% or more of volumes sold in a particular region); International (sold in at least two regions and no more than 80% in any one region). www.drinksint.com
Trading down was a key factor in the growth of domestic/local brands which posted an increase of 6% in 2009. However, the negative impact of trading down for international brands can be seen in a number of markets around the world, particularly the US, a key market for a number of premium and super-premium vodka brands.
Brands such as Absolut, Grey Goose and standard vodka Smirnoff, suffered declines as consumers traded down to economy level variants such as Burnett’s, Three Olives and Svedka. Trading down to less premium brands was also indicative of another trend taking place during the recession – the switch from on-trade to off-trade consumption.
These lesser premium spirits are invariably sold in the off-trade, while more premium brands such as Grey Goose are consumed more in the on-trade. This switch to off-trade consumption can be further seen by the performance of liqueur and bitter brands, most of which declined or remained static in their volume sales, with only the Aperol brand seeing any substantial growth.