Emerging Flavors in Alcoholic Drinks

7/30/2019 Emerging Flavors in Alcoholic Drinks

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Emerging Flavors in AlcoholicDrinksKey flavor trends in beer, vodka, gin, liqueurs, rum and flavored alcoholicbeverages

Reference Code: BI00049-004

Publication Date: March 2011


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About the author

Victoria Sidebottom has nearly a decades experience of researching consumer markets, specializing in

developing consumer insight analysis and brand insight case studies. She has worked on projects for

institutions such as the National Coffee Association of the USA and EBSCO Information Services, and has

also contributed to a variety of consumer goods focused publications, including Marketing Week, Contagious

magazine, Stagnito New Products magazine and Foodbev.com.

Disclaimer

Copyright 2010 Business Insights Ltd

This report is published by Business Insights (the Publisher). This report contains information from reputable

sources and although reasonable efforts have been made to publish accurate information, you assume sole

responsibility for the selection, suitability and use of this report and acknowledge that the Publisher makes no

warranties (either express or implied) as to, nor accepts liability for, the accuracy or fitness for a particular

purpose of the information or advice contained herein. The Publisher wishes to make it clear that any views

or opinions expressed in this report by individual authors or contributors are their personal views and

opinions and do not necessarily reflect the views/opinions of the Publisher.


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Table of Contents

About the author 2

Disclaimer 2

Executive summary 11

Beer 11

Flavored Alcoholic Beverages (pre-mixed drinks) 11

Vodka 12

Liqueurs 13

Gin 13

Rum 14

Chapter 1 Introduction 15

Market overview 15

Definitions 16

Chapter 2 Beer 17

Summary 17

Introduction 17

Flavor trends 18

Regional analysis 19

Segment analysis 19

Breakdown of key flavor types 20

The top 20 flavors in beer 22

Growth flavor types 23Growing: Citrus 23

Growing: Ginger 25

Growing: Berry 26

Falling: Malt 28

Innovation trends 29

Craft beer makers innovate with flavors 29

Traditional flavor revivals 29


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Experimenting with hop varieties 30

Session friendly beers with subtle flavors 30

Women friendly beer flavors 31Beer giants female focused efforts 32

Females targeted with fruit beers 32

Female brewers 33

Conclusions 34

Chapter 3 Flavored Alcoholic Beverages 35

Summary 35

Introduction 35

Flavor trends 36


Segment analysis 37


The top 20 flavors in flavored alcoholic beverages 39

Growth flavor types 40

Growing: Soft fruit 40

Growing: Citrus 41

Growing: Sweet 42

Falling: Berry 43


Energizing alcoholic drinks that do not court controversy 45

Positioning flavored alcoholic beverages for at-home drinking 46

Natural ingredients and plant extracts 47

Targeting the flavor experimenter 47

Attracting the male drinker 47

Conclusions 49

Chapter 4 Vodka 50

Summary 50

Introduction 51

Flavor trends 51



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Segment analysis 53


The top 20 flavors in vodka 55

Growing: Apple/Pear 56

Growing: Citrus 57

Growing: Sweet 58

Falling: Berry 59


Better for you vodkas 61

Vodka infusions offer more natural flavorings 62

Creative savory flavors 64

Vodka designed for food pairings 65

A flavor backlash 66

Conclusions 68

Chapter 5 Liqueurs 69

Summary 69

Introduction 69

Flavor trends 70Regional analysis 70

Segment analysis 71


The top 20 flavors in liqueurs 73

Growing: Berry 74

Growing: Citrus 75

Growing: Spicy 76

Falling: Sweet 77


Stressing the heritage of flavors 79

Reformatting flavors in line with artisanal roots 80

Keeping ingredient mix a secret 80

Herbal liqueurs boost drinking experience 81

Liqueur flavors for celebrations 82


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Using ethical ingredients 83

Conclusions 84

Chapter 6 Gin 86

Summary 86

Introduction 86

Flavor trends 87


Segment analysis 87


The top 20 flavors in gin 90Growing: Botanicals 91

Growing: Floral 92

Growing: Nut 93

Falling: Generic fruit; exotic fruit 94


Bridging traditional with contemporary style 95

Lighter gins encourage new drinkers to the sector 96

Using fresh fruit from cold distillation 97

The healthy Mediterranean diet 98

Conclusions 99

Chapter 7 Rum 100

Summary 100

Introduction 100

Flavor trends 101


Segment analysis 102


The top 20 flavors in rum 104

Growing: Citrus 105

Growing: Spicy 106

Growing: Anise; botanicals 107

Falling: Sweet 107


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Combining rums from multiple islands 109

Going back to American roots 110

Big brand offers own take on craft rum 110

Conclusions 111

Chapter 8 Conclusions 113

Key motivations for accepting flavor innovation 114

The Long-term Loyalist, Category Novice and Experimenter 115

Appendix 117

Methodology 117

Secondary research 117

Glossary/Abbreviations 117

Bibliography/References 118


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Table of figures

Figure 1: The beer flavor wheel was developed to help describe beer flavors 18Figure 2: Leading flavor types (%) for new product launches in beer, 200710 21

Figure 3: Citrus beers have grown in popularity due to their exotic but safe image 24

Figure 4: A desire for nostalgic products is fueling ginger beers growth 26

Figure 5: Berry flavored beers offer a seasonal addition to the beer category 27

Figure 6: Declining flavor categories for new product launches in beer (percentage point

change), 2007-10 28

Figure 7: Fruit flavored beers aimed at female drinkers 33

Figure 8: Leading flavor types (%) for new product launches in flavored alcoholic beverages,

2007-10 37

Figure 9: Soft fruit is a popular flavor type for Flavored Alcoholic Beverage launches 40

Figure 10: Manufacturers have capitalized on the popularity of citrus flavors with novel flavored

alcoholic beverage launches 42

Figure 11: Cocktails often inspire flavored alcoholic beverage sweet flavors 43

Figure 12: Declining flavor categories for new product launches in FABs (percentage point

change), 200710 44

Figure 13: Ypioca Guarana contains guarana for its energizing properties 46

Figure 14: Mikes Hard Lemonade is focused on the male Flavored Alcoholic Beverage drinker48

Figure 15: Leading flavor types (%) for new product launches in vodka, 2007-10 53

Figure 16: Apple and pear vodkas have been launched in specific fruit varieties 57

Figure 17: Citrus flavored vodkas have appeared in premium variations 58

Figure 18: Intense and subtle flavors can be tasted in sweet vodka varieties 59

Figure 19: Declining flavor categories for new product launches in vodka (percentage point

change), 200710 60

Figure 20: Healthy vodkas are emerging, including herbal and aai infused varieties 62

Figure 21: Skyy Spirits has produced a successful vodka infusions line 63

Figure 22: Savory flavored vodkas are emerging in vodka 64Figure 23: Leading flavor types (%) for new product launches in liqueurs, 200710 72

Figure 24: Berry flavored liqueurs are growing in popularity 74

Figure 25: Citrus flavored liqueurs have a strong global following 75

Figure 26: Spicy flavors add an interesting taste sensation to liqueurs 77

Figure 27: Declining flavor categories for new product launches in liqueurs (percentage point

change) 200710 78

Figure 28: Emphasizing heritage for new flavors 80


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Figure 29: Keeping brand ingredients and processes a secret appeals to consumers 81

Figure 30: New herbal flavors include hibiscus, jasmine and wild fennel 82

Figure 31: Aphrodope claims to contain aphrodisiac ingredients 83

Figure 32: Ethically produced ingredients are a growing trend in liqueurs 84

Figure 33: Leading flavor types (%) for new product launches in gin, 2007-10 88

Figure 34: The arms race in gin for the most number of botanical flavors 91

Figure 35: Floral notes add differentiation to gin brands 92

Figure 36: Nutmeg can add a winter seasonal flavoring to gin 93

Figure 37: Declining flavor categories for new product launches in gin (percentage point

change) 200710 94

Figure 38: Oxley Classic English Dry Gin uses a unique cold distillation method 97

Figure 39: Gin Mare capitalizes on the image of the healthy Mediterranean diet 98Figure 40: Leading flavor types (%) for new product launches in rum, 200710 103

Figure 41: Citrus adds a tangy note to rum 105

Figure 42: Spicy flavors offer an exotic, intense flavor element to rum 106

Figure 43: Anise and botanical flavor types have grown in popularity in rum 107

Figure 44: Declining flavor categories for new product launches in rum (percentage point

change), 200710 108

Figure 45: Banks Five Island Rum incorporates rum from different countries 109

Figure 46: Bacardi Reserva Limitada presents a premium offering from a major brand 111

Figure 47: Consumers can be categorized into three types with differing flavor demands 116


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Table of tables

Table 1: Global alcoholic drinks market size by category ($bn), 200914 15

Table 2: Regional share of beer launches (%), 2007-10 19

Table 3: Leading flavor types in global beer launches (%), 2007-10 20

Table 4: Top 20 flavors in global beer launches, 2007-2010 22

Table 5: Regional share of flavored alcoholic beverage launches (%), 2007-10 36

Table 6: Leading flavor types in global flavored alcoholic beverage launches (%), 200710 38

Table 7: Top 20 flavors in global flavored alcoholic beverages launches, 2007-2010 39

Table 8: Regional share of flavored vodka launches (%), 200710 52

Table 9: Leading flavor types in global vodka launches (%), 200710 54Table 10: Top 20 flavors in global vodka launches, 2007-2010 55

Table 11: A guide to vodka taste based on gradings 67

Table 12: Regional share of liqueur launches (%), 200710 70

Table 13: Leading flavor types in global liqueur launches (%), 2007-10 71

Table 14: Top 20 flavors in global liqueur launches, 2007-2010 73

Table 15: Regional share of gin launches (%), 200710 87

Table 16: Leading flavor types in global gin launches (%), 200710 89

Table 17: Top 20 flavors in global gin launches, 2007-2010 90

Table 18: Regional share of rum new product launches (%), 2007-10 101

Table 19: Leading flavor types in global rum launches (%), 200710 102

Table 20: Top 20 flavors in global rum launches, 2007-2010 104


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Executive summary

Beer

The largest growing flavor types in global beer launches in the 2007-10 period were citrus, ginger and

berry, while the biggest falling was malt. The growth of soft drinks-like flavors at the expense of more

traditional beer flavors is indicative of manufacturer attempts to attract new consumers (particularly

women) and compete against ciders and flavored alcoholic beverages.

New trends in flavors in the beer category combine both traditional and modern elements of. Craft beer

makers particularly are introducing many novel flavors, such as savory flavors. Another key trend is

very traditional brewing styles and flavors, and the use of old style ingredients and other flavorings. In

addition, efforts are being made to experiment with different hop varieties to create different flavored

beers.

At the same time, the Asian influence on the beer market is also changing perceptions of what beer is

a move away from the idea of a highly traditional, pure product unchanged in centuries. In short,

Japanese and Chinese consumers are less resistant to changes in flavors and the format of what beer

should be, and their influence will spread westwards.

Flavored Alcoholic Beverages (pre-mixed drinks)

The most popular flavor categories in new flavored alcoholic beverage launches in 2010 were citrus,

cocktail and exotic fruit, while the fastest growing flavors for the 20072010 period were soft fruit, citrus

and sweet flavors.

The category is relatively new, meaning that consumers have fewer preconceived ideas of what flavors

should be available, in contrast to other alcoholic drinks categories. In addition, there are no well known

base flavors to the drinks, so manufacturers are free to produce a wide range of flavor mixes in their

products.


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New trends to emerge in flavored alcoholic beverages include energizing drinks targeted at older, stay

at home consumers, and the user of much less sweet flavors. In addition, more natural and plant

extract flavors such as chili are appearing in flavored alcoholic beverages to give brands an air of

healthiness.

The drive towards more botanical and less sweet flavors is part of an clear move to attract more male

drinkers. We are seeing more masculine packaging and marketing and flavored alcoholic beverages

positioned as a refreshing, often summer focused, alternative to beer.

Vodka The leading flavor types in new vodka launches in 2010 were citrus, sweet and berry, and the fastest

growing flavor types of the 20072010 period were apple/pear, citrus and sweet flavors. Because citrus

and berry flavors are reasonably mature now, manufacturers are now marketing specific fruit varieties

and linking flavors with regions to give more of a sense of authenticity. A key trend is that subtle flavors

are gaining traction with the emergence of infused flavor vodkas instead of syrup flavored vodka

brands.

Good-for-you vodkas are also becoming popular, leading manufacturers to infuse their products with a

variety of healthy ingredients, such as aai berries. Vodka already carries a perception of being a

slimmers drink and manufacturers are pushing it as a healthier alternative to more sugary or calorific

drinks.

Savory vodkas have become a hot trend although these are more novelty for the most part and unlikely

to have anything like the impact of sweeter, fruit-based flavors.

Flavored vodkas are also being marketed specifically as an accompaniment to specific foods and as a

key ingredient in various homemade recipes..

There has been a flavor backlash in some vodka circles: as with other products, a counterreaction to

innovation and experimentation is a move by traditionalists to purer and higher end products. Plain

vodka is promoted as being flavorsome enough on its own without adding additional ingredients and


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there are significant numbers of new, super premium vodkas competing on the basis of who is the most

pure/filtered etc.

Liqueurs

Berry, citrus and spicy were the strongest growing flavor categories in new liqueur launches in the

period 20072010. Berry flavors have a strong female focus, with growing flavors like cranberry

attractive due to their positive health profile. Citrus flavor types have a more gender neutral target, but

have a strong leaning to the summer months as refreshing beverages. Meanwhile, spicy flavors are up

and coming and include chili and pepper, which offer interesting tasting notes that contrast well to

sweet flavorings. The sweet flavor type itself is falling out of favor, as consumers increasingly demand

more sophisticated flavors.

Liqueur manufacturers are looking to the past for flavor inspiration. Heritage flavors are being revived

for modern tastes, while well-known liqueurs are being reformatted to be more true to their original

concoctions. Manufacturers are sensing that liqueurs may come back into fashion as a retro or cult

choice.

Ethical products have filtered into the liqueur sector: organic, fairtrade and locally grown ingredients

featuring increasingly in new products, thereby aiming to attract the green consumer to their brands.

Gin

Botanicals and floral were the strongest growing flavor categories from 2007 to 2010, while generic fruit

and exotic fruit were the flavor types seeing the highest falls.

Traditional flavors still have a strong in gin, and non-standard flavors have failed to take off as

consumers do not perceive them to complement the products traditional flavorings of juniper and

herbal/botanical infusions.

Lighter gins seen by manufacturers as key to attracting new consumers especially lightening the

flavor profile with floral or less strong botanical flavors.


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New production methods are being introduced to bring new flavors to gin, including the use of cold

distillation which enables fresh fruit to be used instead of dried fruit.

Healthier gin ingredients also bring an opportunity option of attracting health conscious consumers to

the sector. For example, one brand aims to exploit the appeal of the Mediterranean diet by using

ingredients grown in this region in its gin.

Rum

In 2010, exotic fruit, citrus, spicy and sweet were the leading flavor types in new rum launches, while

the largest growing flavor types of the 2007-2010 period were citrus, spicy, anise and botanical.

The rum sector is becoming increasingly consolidated, with a few brands accounting for a high

proportion of the market. One of the ways in which smaller producers are hitting back is to band

together and produce blended offerings that offer something different to the competition.

There are small rum producers in the US that are attracting the attention of rum commentators by

offering unique tasting rums to rival their larger competitors. These players are attempting to bring rum

production back to its roots in the US through micro-distilling.

Larger rum producers are aiming to capitalize on the resurgent interest in craft rums by releasing rums

that have ultra-premium characteristics and an appealing production story.


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Chapter 1 Introduction

Market overview

Given the intense competition for market share in the alcoholic drinks sector, manufacturers are under

constant pressure to establish product differentiation. Having seen little or no experimentation in the not so

distant past, flavor innovation has become a key means both to differentiate and drive penetration among

new audiences. This is particularly relevant to the large but more mature categories such as beer, and the

small but faster growing sectors such as vodka and rum (see Table 1). New flavors can provide the impetus

to boost a stagnating category, or create interest in an up and coming sector that consumers have not delved

into as much.

Table 1: Global alcoholic drinks market size by category ($bn), 200914

Category 2009 2010 2011 2012 2013 2014 CAGR200914

Beer 526.3 531.1 537.1 543.9 551.8 560.2 1.3%

Vodka 48.1 49.7 51.4 53.1 54.9 56.7 3.4%

Liqueurs 30.1 30.8 31.4 32 32.7 33.3 2.1%

Rum 25.6 26.7 27.8 29 30.2 31.4 4.2%

FABs 22.4 22.4 22.4 22.5 22.6 22.8 0.3%

Gin & Genever 14.4 14.7 15.1 15.4 15.8 16.2 2.4%

Others 473.5 480.6 488.5 497.1 506.4 516.1 1.7%

Total 1,140.4 1,155.8 1,173.6 1,193.0 1,214.3 1,236.7 1.6%

Source: Business Insights BUSINESS INSIGHTS

Manufacturers are looking outside their own sectors to see what flavors are emerging and gaining popularity.

Cross pollination among drink category flavors is prevalent as marketers seek out what is on-trend in other

sectors which could also work for them.


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A key source of innovation for the alcoholic drinks industry is soft drinks. In the past five years, soft drinks

manufacturers have innovated heavily in natural products, functional products and, a combination of those

two trends, integrating superfruits and more exotic botanicals into their products. In alcoholic drinks, we are

seeing similar trends emerge into the mainstream flavors such as cranberry are popular as they have both

a better for you appeal and the right balance of sweetness and depth. For similar reasons, citrus flavors

remain popular, although we are seeing more differentiation where previously lemon or orange

predominated now manufacturers are distinguishing what type of lemon, or using less common citrus flavors

such as lime.

Definitions

This report will look at the impact of flavor innovation in the alcoholic drinks market and will analyze flavor

trends in the following alcoholic drinks categories:

Beer;

Flavored alcoholic beverages;

Vodka;

Liqueurs;

Gin;

Rum.


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Chapter 2 Beer

Summary

The largest growing flavor types in global beer launches in the 2007-10 period were citrus, ginger and

berry, while the biggest falling was malt. The growth of soft drinks-like flavors at the expense of more

traditional beer flavors is indicative of brewer attempts to attract new consumers (particularly women)

and compete against ciders and flavored alcoholic beverages.

New trends in flavors in the beer category combine both traditional and modern elements of. Craft beer

makers particularly are introducing many novel flavors, such as savory flavors. Another key trend is

very traditional brewing styles and flavors, and the use of old style ingredients and other flavorings. In

addition, efforts are being made to experiment with different hop varieties to create different flavored

beers.

At the same time, the Asian influence on the beer market is also changing perceptions of what beer is

a move away from the idea of a highly traditional, pure product unchanged in centuries. In short,

Japanese and Chinese consumers are less resistant to changes in flavors and the format of what beer

should be, and their influence will spread westwards.

Introduction

Beer is the largest alcoholic drinks category in the world, accounting for global sales of $531.1 billion in 2010.

However, growth is relatively weak, with an estimated compound annual growth rate (CAGR) of 1.3%

between 2009 and 2014.

Introducing flavored beers, both familiar flavors and more exotic variants, has been an attractive means of

boosting sales. Brewers have sought to attract new drinkers to the category as well as inspiring the interest

of existing frequent beer drinkers.


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Flavor trends

In the 1970s, Morten Meilgaard developed the Beer Flavor Wheel, showing the various flavor traits different

types of beer could have. The wheel, shown in Figure 1, was subsequently jointly adopted as the flavor

analysis standard by the European Brewery Convention, the American Society of Brewing Chemists, and the

Master Brewers Association of the Americas. Flavored beers are designed to both adhere to the charts

tasting notes, and add other taste elements to the beer tasting experience that are not included in this chart.

In this way, both traditionalist beer drinkers and newcomers to beer are encouraged to experiment with the

new flavors that are constantly being added to the beer category.

Figure 1: The beer flavor wheel was developed to help describe beer flavors

Source: beerflavorwheel.com BUSINESS INSIGHTS


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Regional analysis

Europeans are the most prolific drinkers of beer in the world. In 2010, Europe saw the highest proportion of

beer products being launched, with 44% of new launches occurring here (see Table 2). This was

considerably more than the next leading region for beer launches, North America, which accounted for just

over a fifth of new launches (22.6%). However, beer launches have been less plentiful elsewhere and have

fallen in Asia Pacific and the Middle East & Africa. The challenge for brewers is to try and boost beer sales in

regions where the product is less successful, and introducing novel flavors is a key way they can do this.

Table 2: Regional share of beer launches (%), 2007-10

2007 2008 2009 2010 Percentage pointchange 200710

Europe 40.3% 41.9% 47.9% 44.0% 3.7%

North America 21.7% 20.4% 17.7% 22.6% 0.9%

Asia Pacific 28.2% 27.6% 17.9% 21.1% -7.1%

Latin America 7.8% 9.6% 15.1% 11.4% 3.7%

Middle East & Africa 2.1% 0.4% 1.4% 0.8% -1.3%

Source: Product Launch Analytics BUSINESS INSIGHTS

Segment analysis

Traditional beer flavorings such as malt and bitter are the backbone of the beer category. However,

brewers are adding novel ingredients to beer that offer different flavor sensations in order to attract new

consumers to the market. While flavored beers are still in the minority in the category, they are growing in

popularity.

Flavor trends in beer launches in the 2007 to 2010 period were dominated by flavors that consumers were

already familiar with. Brewers used flavors synonymous with other categories, such as soft drinks, from citrus

and berry, to other fruit and sweet flavor types. This is shown by examining both the leading flavor types of

the period, and in the fastest growing flavor types in new beer launches (as shown below). Brewers are


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attempting to attract consumers with flavorings familiar to them, but sufficiently new to the beer category to

garner their interest.

Table 3: Leading flavor types in global beer launches (%), 2007-10

Flavor type 2007 2008 2009 2010 Percentage pointchange 200710

Citrus 14.5% 15.7% 20.4% 23.3% 8.8%

Sweet 13.0% 15.0% 15.2% 16.1% 3.1%

Berry 4.7% 4.3% 3.0% 9.8% 5.1%

Malt 22.1% 19.5% 21.5% 9.8% -12.2%Ginger 0.4% 2.8% 1.4% 6.2% 5.9%

Exotic fruit 4.9% 3.8% 3.0% 5.2% 0.3%

Apple/pear 2.5% 1.8% 2.2% 4.7% 2.2%

Soft fruit 4.7% 2.8% 1.7% 4.1% -0.6%

Spicy 3.7% 4.8% 5.0% 3.1% -0.6%

Chocolate 3.5% 4.6% 2.5% 2.6% -0.9%

Source: Product Launch Analytics and Business Insights analysis BUSINESS INSIGHTS

Breakdown of key flavor types

Berry: blackberry, blackcurrant, blueberry, boysenberry, cranberry, elderberry, forestberry, huckleberry,

loganberry, marionberry, raspberry, sourberry, strawberry, and wheatberry

Citrus: Bitter Orange, Blood Orange, Citrus, Grapefruit, Lemon, Lemonade, Lime, Orange, Tangerine,

Yuzu

Ginger: ginger, gingerbread

Malt: barley malt, chocolate malt, barley, malt


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Figure 2: Leading flavor types (%) for new product launches in beer, 200710

Source: Product Launch Analytics and Business Insights analysis


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The top 20 flavors in beer

The table below presents a detailed picture of the top 20 flavors in beer. What is particularly noticeable is the

range of sweet flavors at the bottom of the table brewers introducing flavors such as chocolate, cola and

licorice into beer. At the top of the table, we would expect to see more diversity coming through in the future

as brewers look to identify more specific lemon flavors, or lemon fusion flavors (i.e. lemon and another flavor,

such spice or ginger).

Table 4: Top 20 flavors in global beer launches, 2007-2010

Flavor type Flavor 2007 2008 2009 2010 Percentagepoint change

07-10

Citrus Lemon 4.0% 6.9% 5.0% 10.4% 6.3%

Malt Malt 14.2% 12.2% 11.3% 9.3% -4.9%

Ginger Ginger 0.4% 2.5% 1.4% 6.2% 5.9%

Sweet Honey 1.2% 1.8% 3.0% 5.2% 4.0%

Apple/pear Apple 2.1% 1.5% 2.2% 4.1% 2.0%

Sweet Caramel 4.4% 3.0% 3.0% 4.1% -0.2%

Citrus Citrus 2.5% 2.3% 6.6% 3.6% 1.2%

Citrus Lime 2.6% 2.0% 3.0% 2.6% 0.0%

Spicy Spicy 2.8% 4.6% 4.7% 2.6% -0.2%

Soft fruit Cherry 1.4% 1.5% 0.6% 2.1% 0.7%

Other fruit Fruit 7.0% 5.6% 5.2% 2.1% -4.9%

Citrus Grapefruit 0.7% 1.0% 0.8% 2.1% 1.4%

Citrus Lemonade 1.6% 0.0% 1.1% 2.1% 0.5%

Citrus Orange 2.6% 2.0% 3.9% 2.1% -0.6%

Exotic fruit Pineapple 0.7% 0.5% 0.0% 2.1% 1.4%

Berry Raspberry 1.8% 0.8% 0.3% 2.1% 0.3%

Berry Strawberry 0.2% 0.5% 1.1% 2.1% 1.9%

Chocolate Chocolate 2.8% 2.3% 1.9% 1.6% -1.2%

Sweet Cola 0.5% 0.8% 0.3% 1.6% 1.0%

Anise Licorice 0.7% 1.5% 0.3% 1.6% 0.9%



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Growth flavor types

Growing: Citrus

Citrus was the largest beer flavor type in 2010, featuring in 23.3% of new global beer launches in 2010. It

was also the fastest growing flavor type in new beer launches, rising 8.8 percentage points in the period

2007 to 2010. This highlights its continued popularity over the latter half of the decade.

Citrus includes the familiar flavors of lemon, lime, grapefruit and orange, as well as more exotic and specific

variants such as yuzu, bitter orange and blood orange. Of these, lemon was the most popular citrus flavor

within this category in 2010, and also the most popular flavor of all in the beer category accounting for

10.4% of all new launches in beer. It has also grown in prominence since 2007, rising by 6.3 percentage

points in 2010.

Citrus flavored beers first came to mainstream prominence in western markets with the trend for placing lime

slices in Mexican bottled beers such as Corona and the lemon aftertaste of Belgian beer brands such as

Hoegaarden and the tradition of adding flavors to wheat beers. Big brands have sought to capitalize on the

popularity of this by introducing lime flavored beers. These include Anheuser-Busch which introduced a lime

flavored variant of its popular Bud Light brand in 2008. At the time, the brands vice president of marketing

Dave Peacock commented that, "The palate for consumers has broadened, and they are looking for more

variety. We need to keep up with that." Peacock noted that while lime beer would not appeal to loyalists, it

would appeal to the circa 29% of beer consumers (that) have some form of sweeter palate." Lime, and citrus

flavors overall, therefore, have been used to attract consumers who actually may dislike the traditional taste

of beer.

Citrus as a flavor type also has an appealing dualism in that it is both exotic and safe at the same time;

exotic in that lemon and lime flavoring remind consumers of far away places, yet familiar and safe because

citrus is a well established flavoring in food and drink, if not within the beer market itself. Brewers perceive

citrus as offering good marketing potential to experimenters and existing drinkers.


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Figure 3: Citrus beers have grown in popularity due to their exotic but safe image

Source: Company information BUSINESS INSIGHTS

Recent launches have seen the emergence of citrus flavored beers which also include another, often more

exotic flavoring. For example, Samuel Adams introduced the 2010 Longshot Ales in Lemon Pepper Saison to

the US in 2010, which Samuel Adams employee homebrew winner Jeremy White said "is brewed with

Grains of Paradise, an exotic tropical spice." It is claimed to have a peppery flavor complemented by a

slightly sweet aroma with hints of vanilla and citrus. In addition, Anadolu Efes Biracilik ve Malt Sanayii

introduced an agave and lemon flavoring of its Mariachi Dry brand of beer in Turkey in 2009. Both offer citrus

notes with added flavor elements derived from additional ingredients, helping them standout in the market.

Another company that has seen the potential of citrus as a beer flavoring is German flavor and fragrance

company Symrise. In 2010, the company launched a new range of beverage flavors to capitalize upon citrus

status as a multi-faceted classic with world appeal. Symrise's new beer offerings included '7 Citrus', a

blended beer that incorporates seven different citrus fruits, and ISO! which is a low-alcohol beer with

grapefruit lemon flavoring.

The company noted that its decision to concentrate on citrus beverages was prompted by the familiarity of

the flavor, with over half of the entire global drinks market consisting of citrus beverages, encompassing


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everything from waters and juices to sodas, beers and liqueurs. Consequently, the firm feels that it is on safe

ground with the new launches it describes as, "new interpretations of familiar [citrus] flavors". Stephan Rker,

Symrise category development director of non-alcoholic beverages said: Citrus gives people freshness and

tanginess orange and lemon flavors in particular have always had a certain exotic touch. At the same time,

though, they are well-established, and they delight a wide audience.

Growing: Ginger

Ginger was the second highest growing flavor type of the 2007 to 2010 period and also in the top three of the

strongest flavor types in the beer category in 2010 (see Figure 2). The flavoring has strong associations with

traditional beverages, such as non-alcoholic ginger beer and ginger wine. Nostalgia is therefore an important

part of its revival, particularly in countries where non-alcoholic ginger beer is traditional. With the growing

interest in nostalgia among consumers, prompted by the recession (and the desire to seek comfort in the

past), brewers have launched alcoholic ginger beers to tap into this trend.

In 2010, for example, Halewood International launched a ginger beer to complement its ginger wine brand

Crabbies. Other recent European launches include Franks alcoholic ginger beer from Kopparberg Cider of

Sweden, Chalkys Bark, Blandford Fly and Ginger Tom (from Sharps, Hall & Woodhouse and Robinsons,

respectively).

Commenting on the trend for ginger beer, Al Cross, brand manager for Crabbies at Halewood, said: The

palate of consumers is changing and theyre becoming more adventurous. There are people who may have

tried ginger biscuits when they were a child, but have grown up and find that their tastes have matured and

ginger is something theyre rediscovering, (As quoted by morningadvertiser.co.uk, 2010).

Another aspect that is influencing the growth in ginger beer launches is the growing popularity of Asian

cuisine in western markets. Ginger beer is a traditional beverage in Asia and remains popular there. And the

flavor is now becoming more popular in Europe where Asian culture is having a growing influence on

societys eating and drinking habits.


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In addition, the healthy nature of the ingredient has proved a key selling point for some brewers. Fentimans,

for example, produces Hollows Superior Alcoholic Ginger Beer in the UK, and emphasizes that it is made

from 100% natural ingredients and is free from artificial colors, flavors and preservatives. Another recent

launch, in the US, is Ineeka's Organic Himalayan Green Tea Bier. It is claimed to contain 100% organic

hops, 100% organic ginger, yeast and water, and green tea. Both brands attempt to tap into consumers

growing health concerns which have led them to choose beverages, including alcoholic drinks, that are

perceived as being better for them.

Figure 4: A desire for nostalgic products is fueling ginger beers growth


Growing: Berry

The berry flavor type encompasses a wide range of berry flavors, from the familiar, such as strawberry and

raspberry, to more exotic variants like wheatberry and marionberry. This broad coverage contributed to it

becoming the third fastest growing category of beer launches over the past four years and the joint third most

popular in 2010 (see Table 3 and Figure 2).

The strongest performing berry flavors in 2010 were raspberry and strawberry which both featured in 2.1% of

new beer launches. Strawberry, in particular, has become more popular over the past few years having been

barely used as a beer flavoring in 2007. In contrast, raspberry has been more static, growing by only 0.3


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percentage points over the same period. Berry flavors have connotations of both the exotic and the familiar,

with many berry types being well used in drinks categories. They are perceived as being safe to experiment

with in beer products, while also offering some degree of experimentation.

While many fruit beers have an image of being sweet, berry flavored beers often also have sour properties to

appeal to consumers who may have a less sweet tooth but are also enthusiastic drink experimenters. Sour

beer, for example, is often fermented with berries to help provide its distinct sour taste. Originating in

Belgium, sour beer is now becoming increasingly popular in other parts of the world such as the US. Aged in

barrels and fermented with special yeasts and lactic acid bacteria, sour beers have fruits such as raspberries

and cherries added to them before blending the end results. Russian River Consecration is a sour beer sold

in the US which is fermented with Brettanomyces yeast and 30 pounds of dried currants to create a sour

taste.

In addition, berry flavored beers are often perceived as a seasonal addition to beers lines, being offered in

summer months as a refreshing alternative to conventional beers. This limited edition status can add to their

desirability as they are not sold always available

Figure 5: Berry flavored beers offer a seasonal addition to the beer category



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Falling: Malt

The flavor type that has fallen the most over the past four years is malt. Although this was the joint third most

popular flavor in new beer launches in 2010, malt as a specific, identifiable and marketed flavor in beer, fell

12.2 percentage points in popularity from 2007 to 2010 (see Figure 6). At a global level, this is a fundamental

shift in flavor preferences which signals the extent to which lighter and more flavored beers are driving

uptake.

Figure 6: Declining flavor categories for new product launches in beer (percentage

point change), 2007-10

-1.1%

-2.8%

-3.0%

-4.9%

-12.2%

-14% -12% -10% -8% -6% -4% -2% 0%

Other

Bitter

Botanical

Generic fruit

Malt



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Innovation trends

The following section offers an analysis of the current innovation trends that are impacting the flavored beer

sub-category.

Craft beer makers innovate with flavors

Because microbreweries often have a size advantage, they are typically far more innovative in terms of

launching new flavors than the larger breweries. One craft brewer that has recently launched an innovative

flavored beer is Harpoon Brewery, based in Boston, US. Its Harpoon 100 Barrel Series Island Creek Oyster

Stout contains 180 oysters in the hundred-barrel batch. Produced as a limited edition in a small batch, the

beer is said to blend the roasted notes of the stout with the mineral flavors of the oysters. While perhaps too

extreme for large-scale production it is indicative of two important trends:

Brewers seeking to position beer as flavor matched with food, in the way that sommeliers do for wine;

Brewers upscaling beers with the addition of high end, rare or exotic ingredients

Harry Schuhmacher, editor of Beer Business Daily, commented that it is younger drinkers that are driving the

rise of craft beers due to their desire for beverages with bolder flavors. "Younger people like things that have

bolder taste in coffee, chocolate, anything. Younger people were raised with bolder flavors. A Bud Light just

tastes awfully light to someone who's been drinking Starbucks since the seventh grade," (quoted in the

Chicago Tribune, 2010). Craft beer brewers therefore have an opportunity to target their flavored offerings at

younger aged drinkers in their 20s and 30s who show enthusiasm for beers that use adventurous flavors.

Traditional flavor revivals

A running theme through this report will be that where flavor innovation takes place, its natural counterpart is

a resurgence in traditional flavors, traditional ingredients, and a focus on purity/authenticity of the product. As

well as using new flavor notes to add interest in the beer category, brewers have looked to the past to revive

traditional ingredients that add flavor elements to their brews. This is the case with US-based Oskar Blues

Grill & Brew, which has experimented with mixing traditional malts in its Oskar Blues Mama's Little Yella Pils


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brand. The beer contains a variety of different malts, namely pale malt, German specialty malts and

traditional (Saaz) and 21st century Bavarian hops, along with German yeast. Such variety in malt content

differentiations the drink from its rivals.

Another company that has looked to the past for inspiration in beer product innovation is Lion Brewery in the

US, which partnered with Drinks Americas to reintroduce Rheingold in 2010, a brand of beer which was last

available in the 1970s. Originally developed over a hundred years ago, the brand reportedly had a strong

following in New York in the 1950s. The revival aims to capitalize on this heritage through its can design and

marketing. However, Lion Brewery is said to have altered the original recipe to cater for modern consumer

tastes, highlighting how the modern can interject with heritage brands to make a more appealing product.

Experimenting with hop varieties

Industry players have also been seeking to create different taste sensations in the beverage by researching

different varieties of a core ingredient of beer: hops. Oregon State University (OSU), for example, received a

$1m grant in 2010 from the hops seller IndieHops to study the aroma of hops and the potential to create new

flavors from the ingredient's different varieties.

Shaun Townsend, an OSU hop breeding specialist, commented: "We've had varieties in the field that smell

like buttered popcorn, chocolate and spearmint; whole different varieties and aromas," (as quoted by KVAL,

the Oregon CBS Affiliate). This highlights how brewers can both offer new flavors while retaining the core

purity of the product ingredients.

Session friendly beers with subtle flavors

Flavored beers are often perceived as being good for drinking in moderate amounts, perhaps as an

alternative to a glass of wine. But a key weakness is that they can be too much for the palate if consumed in

large quantities. However, brewers have also developed beers that are designed to be ideal for session

drinking; that is, being enjoyable over several glasses.

A session beer can be defined as anything that is light in alcohol which can be consumed without overtaxing

a drinker with its flavor or intensity. These beverages demand more subtle flavorings that enable the


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consumer to drink more without feeling overwhelmed by the taste. Such flavorings are often developed from

the base ingredients of beer rather than adding ingredients to its traditional format. Again, this type of

production process makes the end product appealing to core beer drinkers (who on the whole prefer

traditional beer formats over those with added flavors) rather than new drinkers to the category.

Various brewers are attempting to develop session beers that are flavorful yet subtly so, thereby encouraging

the drinker to have more than one glass in one session. The potential of session drinks with subtle but

interesting flavor notes is highlighted by the growth of numerous brands, including:

Revolution Brewing Cos Workingman Mild. An English luncheon beer with toffee and caramel notes.

Two Brothers Brewing Co.'s Long Haul Session Ale. An amber-hued mild ale aged in oak. Jason Ebel,

Two Brothers owner, noted that: "We wanted to produce a beer that has a tremendous flavor with a lot

going on but not a lot of alcohol. We wanted it to be a beer that you can sit down and enjoy more than

one of."

Metropolitan Brewing's Krankshaft Kolsch. A beer brewed like a lager, yet one that uses ale yeast.

Doug Hurst, Metropolitan brewer is quoted as saying: "I'm a fan of less is more and balance. It's about

subtlety rather than being hammered over the head."

Women friendly beer flavors

Despite sizeable changes in the way women drink, beer drinking is still very male dominant. In the UK, for

example, only 10-15% of beer is consumed by women. Women often perceive beer to have an unpleasant

flavor, be high in calories and cause bloating. As a result, beers designed specifically for women has been of

key development area for many brewers. At the moment, flavor is most commonly used to target this market.


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Beer giants female focused efforts

Molson Coors is one beer giant that is attempting to woo the female drinker. It has set up the Bittersweet

Partnership business unit with the aim of finding out more about womens attitudes to beer. With the insight it

is collecting through this unit, the company aims to launch a specific range of beer for women in 2011,

featuring flavors and packaging designs to appeal to the feminine palate.

In addition, an organization called Dea Latis has been launched in the UK, which aims to bring beer to

women'. The group, named after the Celtic goddess of beer and water, is backed by industry heavyweights

including Heineken, Wells & Young, Greene King and the Campaign for Real Ale (Camra). It aims to promote

beer to women through a series of marketing efforts. These organizations show the concerted efforts the

industry is undertaking to encourage the unenthusiastic female drinker to take a more positive view of beer.

Females targeted with fruit beers

A long held strategy has held that women like flavored beers. In recent years, however, it is less the sweet

aspect of this flavor choice that has been promoted and more its healthy and refreshing benefits, along with

being ideal to enjoy in the summer months. In this way, such products are designed to appeal to womens

demands in their drinks choices.

An emphasis on natural ingredients has been part of this trend, with women demanding drinks that have

fewer artificial ingredients that are perceived as being bad for health. In 2009, Rushing Dolls launched the

Harry's Beer Original Beautiful Beer for Women in the UK, described as a "delicious pale ale designed with

the female palate in mind with a refreshing citrus zing" and featuring "beautiful, natural ingredients."

Other recent female-targeted fruit flavored beers to be launched around the world include the Essa

Pineapple-Grapefruit beer released in Russia by SABMiller, and the lemon flavored Redds which is

distributed in Ecuador by Bavaria SA.


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Figure 7: Fruit flavored beers aimed at female drinkers

Essa Pineapple-Grapefruit

Redd's - FlavoredBeer - Limon

Harry's Beer - OriginalBeautiful Beer for

Women

Essa Pineapple-Grapefruit

Redd's - FlavoredBeer - Limon

Harry's Beer - OriginalBeautiful Beer for

Women


Female brewers

Although the majority of beer is brewed by men, there have emerged craft breweries which are run by

women. For example, Carol Stoudt is founder of Pennsylvanias Stoudt Brewing Company, producing female

friendly beers such as American Pale Ale which is said to have a citrus aroma. In addition, New York-based

Harlem Brewing Company was founded by Celeste Beatty, and produces beer such as the Golden Ale, a

light-bodied ale with a nut-flavored influence. Such breweries offer a womans take on the brewing process

and could appeal to the female drinker because of this.


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Conclusions

There is significant innovation in flavors in beer. At the same time, the use of malt as a specific,

marketable flavor has fallen significantly. Despite this, there is a natural counter-reaction to flavor

innovation as brewers seek to differentiate with lighter flavors on the basis of purity, traditional brewing

methods all trends that have occurred in areas such as vodka.

Citrus flavors remain predominant. However, they look to be quite saturated. Brewers will need to

differentiate more on the basis either of the quality of citrus flavor or introduce more exotic citrus

flavors.

Savory flavors will remain niche. However, flavor matching the idea that certain beers better suit

certain foods is an important trend that will impact on the flavor notes that brewers use to describe their

beers.

There is still significant scope to introduce more natural flavors and superfruit flavors into beer.

Although these are likely to remain quite niche, the most likely candidates for flavors are sweet/tart

superfruits including cranberry, pomegranate, ginger.

A key development is the growing importance of the Asian beer market, where traditional sacred cows

about what does/does not constitute a beer are less observed. This will drive flavor innovation that will,

in turn, influence western drinking patterns.


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Chapter 3 Flavored Alcoholic Beverages

Summary

The most popular flavor categories in new flavored alcoholic beverage launches in 2010 were citrus,

cocktail and exotic fruit, while the fastest growing flavors for the 20072010 period were soft fruit, citrus

and sweet flavors.

The category is relatively new, meaning that consumers have fewer preconceived ideas of what flavors

should be available, in contrast to other alcoholic drinks categories. In addition, there are no well known

base flavors to the drinks, so manufacturers are free to produce a wide range of flavor mixes in their

products.

New trends to emerge in flavored alcoholic beverages include energizing drinks targeted at older, stay

at home consumers, and the user of much less sweet flavors. In addition, more natural and plant

extract flavors such as chili are appearing in flavored alcoholic beverages to give brands an air of

healthiness.

The drive towards more botanical and less sweet flavors is part of an clear move to attract more male

drinkers. We are seeing more masculine packaging and marketing and flavored alcoholic beverages

positioned as a refreshing, often summer focused, alternative to beer.

Introduction

Flavored alcoholic beverages (FABs) is one of the smallest categories in the alcoholic drinks market,

recording global sales of $22.4bn in 2010. It consists of alcoholic soft drinks (such as malt beverages), pre-

mixed spirits (such as vodka and coke mix in a can) and wine coolers (made from wine and fruit). Sold

mainly in cans and bottles, the drinks are sweet in nature and often high in alcohol content. The fact that the

sweetness masks the alcohol content is a point of controversy, fuelling criticisms that FABs attract under age

drinkers. Indeed, an alternative name for this category is 'alcopops'.


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The category is relatively new compared to other alcoholic sectors having gaining popularity in the US in the

1980s and 1990s with the introduction of brands such as Bacardi Breezer and Diageo's Smirnoff Ice as well

as successful smaller producers such as Mike's Hard Lemonade. The modern day challenge for

manufacturers is to develop new flavors that appeal to adult drinkers and, increasingly, an older profile of

consumers.

Flavor trends

Regional analysis

New flavored alcoholic beverages launches were most common in Asia Pacific in 2010, where over 40% of

new products were introduced (see Table 5). However, Europe is catching up, accounting for only a slightly

smaller proportion of new flavored alcoholic beverage launches in 2010. While launches in Europe have

fallen since 2007, they are growing in the smaller Latin American market, highlighting the confidence

manufacturers have that this is a growing category, where consumers are receptive to new product

introductions and flavors.

Table 5: Regional share of flavored alcoholic beverage launches (%), 2007-10


Asia Pacific 29.8% 53.4% 40.8% 40.9% 11.1%

Europe 45.5% 30.0% 34.1% 39.2% -6.2%

North America 20.7% 8.8% 11.3% 10.1% -10.6%

Latin America 2.9% 6.2% 11.9% 8.0% 5.1%

Middle East & Africa 1.1% 1.5% 1.8% 1.7% 0.6%



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Segment analysis

The largest flavor types in newly launched flavored alcoholic beverages for 2010 were citrus, cocktail and

exotic fruit, which have traditionally been popular flavor types in other alcoholic drink categories. In addition,

the largest growing flavor types for the 2007-10 period were soft fruit, citrus and sweet (see Figure 8 and

Figure 12 and Table 6).

As flavored alcoholic beverages have little specific underlying flavor or engrained consumer expectations,

manufacturers have had much greater latitude to experiment with flavors. However, manufacturers are still

relying on flavor types that are familiar to consumers.

Figure 8: Leading flavor types (%) for new product launches in flavored alcoholic

beverages, 2007-10



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Table 6: Leading flavor types in global flavored alcoholic beverage launches (%),

200710

Category 2007 2008 2009 2010 Percentage pointchange 200710

Citrus 23.2% 29.8% 22.5% 26.4% 3.2%

Cocktail 12.5% 11.9% 13.5% 14.3% 1.8%

Exotic fruit 14.9% 14.8% 18.6% 13.8% -1.1%

Berry 13.4% 8.3% 8.7% 11.0% -2.4%

Soft fruit 6.4% 7.5% 9.2% 9.7% 3.3%

Sweet 4.6% 5.6% 5.1% 7.6% 2.9%

Grape 7.8% 5.2% 9.0% 5.5% -2.3%

Apple/pear 3.9% 7.1% 5.1% 4.4% 0.5%

Ginger 0.7% 1.3% 0.5% 1.8% 1.1%

Botanical 2.7% 1.9% 1.4% 1.4% -1.3%



Berry: acai, ashberry, berry, blackcurrant, cassis, chokeberry, cranberry, elderberry, forestberry,

lingonberry, raspberry, red berry, red fruit, redcurrant, strawberry, wildberry;

Citrus: Amanatsu, Bitter Orange, Blood Orange, Citrus, Grapefruit, Hassaku, Japanese Citron, Kabosu,

Lemon, Lime, Mandarin, Orange, Pink Grapefruit, Pink Lemonade, Red Orange, Ruby Grapefruit,

Shekwasha, Sudachi, Tangelo, Tropical Orange, White Grapefruit, Yuzu;

Cocktail: amaretto, bourbon, cognac, gin, rum, sangria, saketequila, shochu, vodka, whisky, white rum;

Exotic fruit: banana, carambola, coconut, dragonfruit, exotic fruit, feijoa, guava, gold kiwi, goyave,

guanabana, kiwi, lychee, mango, maracuja, melon, papaya, passionfruit, pineapple, pomegranate,

starfruit, tropical watermelon;

Soft fruit: apricot, cherry, Japanese apricot, peach, plum, sour cherry, white peach, yellow plum;

Sweet: candy, calpis, caramel, cola, honey, lemonade, marshmallow, sugarcane, sweet, toffee, vanilla.


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The top 20 flavors in flavored alcoholic beverages

The table below presents a detailed picture of the top 20 flavors in flavored alcoholic beverages. Because of

the historic nature of flavored alcoholic beverages in the past, there has been a strong focus on citrus and

soft fruits and cocktail flavors. However, there is a clear opportunity for manufacturers to explore more better

for you flavors, including superfruits, and to use botanicals to position flavored alcoholic beverages as an

option for beer drinkers.

Table 7: Top 20 flavors in global flavored alcoholic beverages launches, 2007-

2010


07-10

Citrus Lime 2.7% 2.7% 2.9% 5.1% 2.4%

Citrus Orange 6.6% 6.9% 5.3% 5.1% -1.5%

Citrus Lemon 5.4% 6.7% 6.3% 4.8% -0.6%

Soft fruit Peach 3.7% 3.5% 3.8% 4.4% 0.7%

Cocktail Vodka 6.8% 4.6% 2.7% 4.4% -2.5%

Sweet Cola 1.0% 2.5% 1.5% 3.9% 2.9%

Citrus Grapefruit 4.6% 6.7% 4.6% 3.9% -0.7%

Berry Strawberry 3.4% 2.9% 3.2% 3.9% 0.5%

Exotic fruit Pineapple 3.7% 3.1% 4.1% 2.8% -0.9%

Exotic fruit Mango 2.4% 3.3% 2.9% 2.5% 0.1%

Apple/pear Apple 2.9% 4.2% 3.2% 2.3% -0.6%

Berry Cranberry 2.7% 1.3% 1.2% 2.3% -0.4%

Cocktail Rum 2.4% 2.1% 3.2% 2.3% -0.1%

Sweet Calpis 0.5% 1.3% 1.4% 2.1% 1.6%

Berry Raspberry 2.4% 0.6% 0.7% 2.1% -0.4%

Cocktail Tequila 0.2% 0.8% 1.0% 1.8% 1.6%

Cocktail Whisky 0.0% 0.2% 0.2% 1.8% 1.8%

Exotic fruit Lychee 0.5% 1.7% 0.9% 1.6% 1.1%

Grape Muscat 0.5% 0.6% 1.0% 1.6% 1.1%

Exotic fruit Pomegranate 1.0% 0.4% 0.7% 1.6% 0.6%



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Growth flavor types

Growing: Soft fruit

Soft fruit was the largest growing flavor type from 2007 to 2010, rising 3.3 percentage points, and the fifth

most popular Flavored Alcoholic Beverage flavor type of 2010. It includes fruits such as peach, apricot and

cherry. Out of these, peach was the most popular soft fruit flavor of 2010, occurring in 4.4% of new Flavored

Alcoholic Beverage launches. It was also the fourth most popular flavor overall for this year.

These fruit flavored FABs are designed to appeal to female drinkers, using feminine packaging alongside the

sweet flavoring. For example, the US-based Dirty Blonde brand of cocktail are FABs contained within wine

bottle style packaging and in feminine colors. The Peach Passion Bellini variant is described as combining

luscious peach nectar with a hint of sensuous passion fruit essence, language designed to be appealing

to women.

In addition, other recent introductions in soft fruit flavors have been launched that offer unique point of

difference. The Choya Umeshu Jelly [Japanese apricot liqueur jelly], for example, is a ready-to-drink, low-

alcohol cocktail type product that contains a unique jelly made with Japanese apricot liqueur. Choya claims

that this is the first jellied alcoholic beverage with an effervescent mouthfeel to be launched in Japan. The

jelly drink concept is popular in Japan and adventurous consumers of FABs are attracted to its unusual

positioning in a familiar soft fruit flavor (see Figure 9 below).

Figure 9: Soft fruit is a popular flavor type for Flavored Alcoholic Beverage launches



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Growing: Citrus

Citrus was the leading flavor type in FABs in 2010, accounting for over a quarter of all new launches. It was

also the second strongest growing flavor since 2007.

The citrus group consists of such flavors as lime, orange and lemon, which were the three most popular

flavors in spirit-branded beverages in 2010. Lime and orange are the leading citrus flavor types, both

featuring on 5.1% new launches in 2010. However, although sharing joint place, orange has fallen slightly in

popularity, featuring on slightly fewer products in 2010 than in 2007, while lime has gained share, rising 2.4

percentage points.

In Japan, two recent launches standing out: Calpis Bartime Rakuen no Orange [orange in paradise] is a

ready-to-drink, low-alcohol cocktail made with orange juice and dark rum which utilizes a novel process of

being aged in oak casks. An original milk spirit is also added to produce a distinctive flavor. In addition, the

Japanese market has also seen the recent launch of Morita Frusshu Sangria Taste, which is a solid jelly

made with a carbonated ready-to-drink, low-alcohol cocktail. It is said to have a light body red wine base,

with orange and cinnamon flavorings.

The US market has also seen the launch of a novel citrus FAB. The Cordina mar-GO-rita Wine Cocktail in a

Classic Lime flavor comes in a resealable, foil, stand-up pouch which is designed to be frozen and eaten as

a frozen cocktail (see below). Such launches show that combining a novel aspect such as production method

or mouthfeel with a familiar flavor can be a successful means for FAB manufacturers to gain consumer

interest in their product.


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Figure 10: Manufacturers have capitalized on the popularity of citrus flavors withnovel flavored alcoholic beverage launches


Growing: Sweet

The sweet flavor type was the third fastest growing from 2007 to 2010, and the sixth most popular in new

launches in 2010. It consists of popular drink mixes such as cola and lemonade, as well as flavors such as

vanilla and honey. Cola was the most popular sweet flavor type in 2010, featuring on 3.9% of new flavored

alcoholic beverage launches. Its popularity is steadily rising having increased by 2.9 percentage points from

2007 to 2010 to become the sixth most popular flavor.

The sweet flavor type is popular with manufacturers largely because of its versatility and ability to create a

pleasant flavor that can take the edge off strong alcoholic ingredients. There have been various new

launches of sweet FABs that have innovative concepts. For example, the Artesanos del Cochiguaz Manjar

Lucuma Colada Artesanal, recently launched in Chile, is described as a "syrupy caramel candy and eggfruit"

flavored homemade-style cocktail drink. The caramel candy and eggfruit combination would appear to be

new to the category. In addition, also in Chile, the Capel Drinks Capel Coctel has been introduced in a Toffee

Cream Colada variety, which is a novelty for the flavored alcoholic beverage sector. Elsewhere, in Japan a

new honey-based alcoholic drink called Ei-Sho-Gen Sonomama Nomeru has been launched in a novel type

of glass packaging, which resembles a jar of honey. These products, shown in Figure 11, show a real


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willingness for particularly interesting because they show an overlap across liqueurs and raise the idea of

innovation coming from confectionery and dessert flavors.

Figure 11: Cocktails often inspire flavored alcoholic beverage sweet flavors


Falling: Berry

Berry flavors, including familiar favorites such as strawberry, blackcurrant and blackberry, alongside more

unusual flavors such as aai and cassis, are losing favor with flavored alcoholic beverage manufacturers.

Berry flavors fell by 2.4 percentage points in new product launches in 2010 over 2007.Nonetheless, it should

be noted that this is a minor drop. Berry flavors in total were the fourth most popular flavor type. In addition,

certain berry flavors, such as strawberry, continue to feature high up on the FAB flavor leaderboard (it was

the ninth most popular flavor in 2010, featuring in 3.9% of new products.


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Figure 12: Declining flavor categories for new product launches in FABs (percentagepoint change), 200710

-0.8%

-1.1%

-1.3%

-2.0%

-2.3%

-2.4%

-3.0% -2.5% -2.0% -1.5% -1.0% -0.5% 0.0%

Tea

Exotic fruit

Botanical

Generic fruit

Grape

Berry



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Innovation trends

The following section offers an analysis of the current innovation trends that are impacting flavored alcoholic

beverages.

Energizing alcoholic drinks that do not court controversy

One of the controversies to impact the FABs category is its attraction to underage drinkers, particularly given

that these drinks typically have a high alcohol content. Fruit and sweet flavors can mask the alcohol taste

which leads to the perception of FABs as training drinks. Even among legal drinking age consumers,

however, the beverages are controversial. Many of these drinks are marketed as being revitalizing and ideal

for high energy nights out. Some FABs contain a combination of caffeine and alcohol to enable the consumer

to limit the feeling of drunkenness and stay alert for longer. This can mean they do not feel drunk and

actually consume more alcohol than they otherwise would.

At the end of 2010 US regulators proposed a ban on the sale of caffeine-containing alcoholic drinks. This has

had implications for energizing FABs producers, leading many to reformulate their beverages in anticipation

of the ban. Phusion Projects, for example, has reformulated its best selling Four Loko brand to remove the

stimulants caffeine, guarana and taurine.

The challenge for manufacturers is to develop energizing FABs that are designed to be consumed sensibly

and not for binge drinking, with flavors that are still appealing to consumers. One brand that is marketed

differently from many American brands is the Brazilian brand Ypioca Guarana, which is said to be the first

drink that combines the traditional flavor of sugar cane liqueur with the energizing properties of guarana (see

Figure 13). The brand is packaged in plastic bottles that encourage drinking at home it is not as

extravagantly packaged as some energizing brands. Energizing FABs can therefore be marketed as at-home

drinks to liven up tired consumers.


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Figure 13: Ypioca Guarana contains guarana for its energizing properties


Positioning flavored alcoholic beverages for at-home drinking

As well as energizing FABs beginning to be sold for at-home occasions, manufacturers are also

concentrating on producing pre-mixed drinks suitable for drinking at home. Steve Hamilton, innovation and

nurture director at Diageo GB, noted the rise of this trend: "Manufacturers are investing in this category, and

really positioning the drinking occasion in an in-home setting for the first timeAmong consumers who want

to drink spirits, there are barriers to purchasing them. Consumers ask themselves: 'Have I got a bottle at

home? Is it chilled? Have I got the right mixer? What are the right proportions to use?' With these cans, it's

easy," (quoted in The Grocer, 2010).

In addition, Theo Lioutas, senior vice president, director, R&D, with Brown-Forman, also noted the

importance of at-home drinking occasions to the FABs market. Consumers have shifted their consumption

lately to more in-home rather than on-premise due to the tough economic conditions. This trend was

recognized by our company and addressed immediately by intensifying our activity in the ready-to-drink

(RTD) and ready-to-pour (RTP) categories, (quoted on ingredientsnetwork.com).

In order to stand out in the market, such companies have released novel flavored offerings that aim to attract

the at-home drinker. Brown-Forman, for example, has launched Jack & Ginger RTD in Mexico, and El

Jimador New Mix Margarita in Spicy Mango and Paloma RTD flavors for the US market. These are

sufficiently different to attract consumers looking for a more adventurous at-home drink.


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Natural ingredients and plant extracts

In line with other drinks categories, natural flavorings are a popular trend in FABs. Consumers are

demanding beverages that are free from artificial ingredients and contain flavors derived from nature.

Leaving aside the debate about whether natural flavors are truly natural or not, the key issue is one of

positioning. Natural flavors are perceived as a healthier alternative to chemical-based flavorings.

For example, the Vbase vodka mix from Canada-based Base Concept combines vodka, natural plant

extracts and concentrated blackberry, cranberry and chokeberry juices. In addition, the US available Tilt Malt

Beverage from Anheuser-Busch comes in four versions (Green Lemon Lime Citrus, Blue Raspberry, Red

Punch, and Purple Grape) which contain natural fruit flavor and certified colors. Instead of a simple line of

ingredients therefore, new FAB launches are often infused with a plethora of natural ingredients to provide a

distinct flavor offering sufficiently different from the competition.

Targeting the flavor experimenter

Some unusual flavors are appearing in FABs to attract experimental consumers bored with traditional flavor

offerings. Examples of recent launches include the chili and papaya flavored Palio wine cooler introduced to

Germany and Switzerland, and an agave flavored wine cooler in a pouch called Cordina. The latter also has

the additional novelty of being designed to be frozen before consumed. These flavors are less sweet than

traditional FABs, and are more targeted at slightly older consumers.

Attracting the male drinker

As Kevin McLaughlin, former vice president of marketing for one of the leading male-focused FAB brands,

Mikes Hard Lemonade, noted back in 2006: The category constantly fights to hold onto its male

demographic, (quoted in bevspectrum.com). A key opportunity for FABs is to encourage switching from

spirits or beer. Mikes Hard Lemonade (shown in Figure 14), for example, markets its beverages as a

refreshing alternative to beer, coming in summer season flavors such as Original Lemonade as well as

newer flavors such as Mango Punch and Fruit Punch. Of note is the masculine packaging of the beverages

and also their focus on natural ingredients, a factor which acknowledges that men are also demanding

healthy ingredients.


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Figure 14: Mikes Hard Lemonade is focused on the male Flavored Alcoholic

Beverage drinker



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Conclusions

The flavored alcoholic beverage category is extremely competitive, where flavor innovation plays a key role

in helping brands differentiate. Some key observations of flavor developments are as follows:

It is becoming much less acceptable to develop energy FABs Nonetheless, it would be over optimistic

to believe that the market for caffeine-enhanced FABs will disintegrate overnight, with younger

consumers still demanding alcoholic energy drinks. One way in which manufacturers are addressing

this is by toning down the marketing, introducing less sweet flavors and using more natural energy

ingredients like guarana.

FABs are following other drink categories by using more natural ingredients. There are real lessons to

be learnt from the soft drinks market. The term natural is very overused in soft drinks to the point of

being almost meaningless and manufacturers who want to build sustainable brands need to be

prepared to prove the natural credentials of the ingredients they use. From a marketing standpoint, the

key question is how natural adds a price premium how can the natural flavor be positioned as

making the brand more exclusive, or adding a better flavor, or used in conjunction with a formulation

that is inherently healthier than alternatives.

FABs for men can be expected to be a niche of the market in the near-term. Only a small proportion of

brands use flavor to target male consumers. The key question here is how to use flavor to encourage

switching, especially from beer. At present, many attempts to appeal to male consumers are slightly

crass they are not positioned as something consumers might want to drink more than once in an

evening. More traditionally male flavors such as ginger, cider apple and botanicals.


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Chapter 4 Vodka

Summary

The leading flavor types in new vodka launches in 2010 were citrus, sweet and berry, and the fastest

growing flavor types of the 20072010 period were apple/pear, citrus and sweet flavors. Because citrus

and berry flavors are reasonably mature now, manufacturers are now marketing specific fruit varieties

and linking flavors with regions to give more of a sense of authenticity. A key trend is that subtle flavors

are gaining traction with the emergence of infused flavor vodkas instead of syrup flavored vodka

brands.

Good-for-you vodkas are also becoming popular, leading manufacturers to infuse their products with a

variety of healthy ingredients, such as aai berries. Vodka already carries a perception of being a

slimmers drink and manufacturers are pushing it as a healthier alternative to more sugary or calorific

drinks.

Savory vodkas have become a hot trend although these are more novelty for the most part and unlikely

to have anything like the impact of sweeter, fruit-based flavors.

Flavored vodkas are also being marketed specifically as an accompaniment to specific foods and as a

key ingredient in various homemade recipes.

There has been a flavor backlash in some vodka circles: as with other products, a counterreaction to

innovation and experimentation is a move by traditionalists to purer and higher end products. Plain

vodka is promoted as being flavorsome enough on its own without adding additional ingredients and

there are significant numbers of new, super premium vodkas competing on the basis of who is the most

pure/filtered etc.


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Introduction

Considered by some consumers to be relatively bland in its original state, vodka has had flavorful ingredients

added to it for many years to be more appealing to consumers, starting in Eastern Europe where the drink

originated. The Absolut brand from Sweden has had a major influence introducing flavored vodka into

Western and Eastern European markets.

Absolut was the first major vodka brand to successfully launch flavored varieties into Western Europe and

the US, and began to market these additions in the 1980s. Following the global success of Absolut, many

other vodka brands have introduced flavored varieties as a means of creating growth in the category. This

has also prompted other spirit brands to follow suit: Danielle Eddy, spokeswoman for the Distilled Spirits

Council, noted: "Flavored vodkas have opened the door for flavored rums and infused tequilas and the

different types of gins out there. Flavored vodka has started the trend of other flavored products."

The flavored vodka market is maturing. Vodka brands now include herb and spice infusions, savory variants

and good-for-you antioxidant formulations.

Flavor trends

Vodka originated in Russia and Poland, before expanding into other Eastern European countries and Nordic

states. Now a global phenomenon, vodka has become the leading spirits category in the US. Vodka is

classified in the US as "neutral spirits, so distilled, or so treated after distillation with charcoal or other

materials, as to be without distinctive character, aroma, taste, or color" (Bureau of Alcohol, Tobacco and

Firearms). This definition, which claims vodka has no distinctive taste, is one which many other vodka loving

countries would reject, with consumers enjoying the beverage neat in shots. In the US, the preference is for

vodka to be used in mixes, cocktails or in a flavored vodka state.

This is not to say that flavored vodka is not popular in its originating countries. In Russia, and Ukraine, vodka

flavored with honey and pepper is popular, while in Nordic countries, vodka seasoned with herbs, fruits and

spices are popular drinks in midsummer seasonal festivities.


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Regional analysis

North America is by far the most popular region for flavored vodka launches, accounting for well over half of

all global launches in 2010. This is a substantial increase from 2007, showing how the market has taken off

in the region in the past few years (see Table 8). In contrast, the global share of new flavored vodka

launches in Europe have fallen sharply. This is likely to highlight a growing trend for unflavored, traditional

vodkas among Europeans, instead of flavored variants, especially in the vodka heartlands of Russia and

Eastern Europe. Although the actual shift is unlikely to be as severe as the data indicates, it is nonetheless

indicative of greater interest in North America for flavored vodkas.

Table 8: Regional share of flavored vodka launches (%), 200710


North America 22.8% 28.9% 32.3% 58.7% 35.9%

Europe 59.2% 52.7% 47.1% 25.5% -33.7%

Asia Pacific 13.6% 16.1% 4.5% 8.2% -5.4%

Middle East & Africa 0.0% 0.0% 5.2% 4.1% 4.1%

Latin America 4.4% 2.3% 11.0% 3.6% -0.8%



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Segment analysis

The leading flavor types in global vodka launches in 2010 were citrus, sweet and berry. Citrus and sweet are

also fast growing flavor types, being in the top three for highest growing flavor types from 2007 to 2010.

However, apple/pear was the doubled its share of new product launches worldwide (see Figure 15 and Table

9).

Figure 15: Leading flavor types (%) for new product launches in vodka, 2007-10



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Table 9: Leading flavor types in global vodka launches (%), 200710

Flavor type 2007 2008 2009 2010 Percentage pointchange 200710

Citrus 16.1% 16.4% 17.6% 20.9% 4.8%

Sweet 11.9% 10.2% 11.5% 15.1% 3.2%

Berry 18.7% 17.7% 13.5% 13.7% -5.0%

Exotic fruit 9.3% 6.6% 11.5% 11.5% 2.2%

Apple/pear 5.2% 4.9% 4.7% 10.1% 4.9%

Soft fruit 6.2% 2.7% 6.1% 6.5% 0.3%

Ginger 1.0% 2.2% 2.7% 3.6% 2.6%Spicy 4.7% 5.8% 4.1% 3.6% -1.1%

Chocolate 1.6% 1.3% 1.4% 2.9% 1.3%

Grape 0.5% 3.1% 2.0% 2.9% 2.4%

Coffee 1.0% 0.9% 1.4% 2.2% 1.1%



Apple/pear: apple, pear;

Berry: aai, ashberry, berry, black raspberry, blackberry, blackcurrant, blue raspberry, blueberry,

cloudberry, cowberry, cranberry, currant, forestberry, huckleberry, raspberry, red bilberry, red fruit,

redberry, rowanberry, strawberry, wild blackberry, wildberry;

Citrus: Blood Orange, Citron, Citrus, Grapefruit, Lemon, Lemonade, Lemongrass, Lime, Mandarin

orange, Pink Grapefruit, Pink Lemonade, Red Grapefruit, Tangerine;

Sweet: caramel, cookie, cola, custard, honey, marmalade, root beer, sweet, soda, sugar, toffee, vanilla.


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The top 20 flavors in vodka

The table below presents a detailed picture of the top 20 flavors in vodka. The most major point to note is the

emergence of caramel flavored vodka, a real spike from 2007. Because of its versatility, vodka can work with

a lot of different flavors. However, the growth of fairly experimental flavors such as root beer and espresso

risk creating a sense in which vodka is a novelty drink, and may be damaging to more premium brands.

Table 10: Top 20 flavors in global vodka launches, 2007-2010


07-10

Apple/pear Apple 2.6% 1.8% 4.1% 7.9% 5.3%

Citrus Lemon 6.7% 5.3% 4.1% 5.8% -1.0%

Sweet Caramel 1.0% 0.4% 2.0% 5.0% 4.0%

Sweet Vanilla 2.1% 2.2% 2.0% 5.0% 3.0%

Citrus Orange 1.0% 2.2% 4.7% 4.3% 3.3%

Ginger Ginger 1.0% 2.2% 2.0% 3.6% 2.6%

Soft fruit Peach 2.1% 0.4% 1.4% 3.6% 1.5%

Berry Raspberry 5.7% 4.0% 2.7% 3.6% -2.1%

Berry Blueberry 1.6% 3.5% 0.7% 2.9% 1.3%

Exotic fruit Coconut 0.0% 0.0% 0.0% 2.9% 2.9%

Chocolate Chocolate 1.6% 1.3% 1.4% 2.2% 0.6%

Citrus Citron 0.5% 1.3% 0.0% 2.2% 1.6%

Grape Grape 0.5% 2.7% 1.4% 2.2% 1.6%

Exotic fruit Mango 1.6% 1.3% 3.4% 2.2% 0.6%

Apple/pear Pear 2.6% 3.1% 0.7% 2.2% -0.4%

Citrus Pink Grapefruit 0.0% 0.0% 0.0% 2.2% 2.2%

Sweet Root Beer 0.0% 0.4% 0.0% 2.2% 2.2%

Citrus Citrus 1.6% 0.9% 2.7% 1.4% -0.1%

Berry Cranberry 3.6% 1.3% 2.7% 1.4% -2.2%

Coffee Espresso 0.0% 0.4% 1.4% 1.4% 1.4%



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Growing: Apple/Pear

Apple/pear vodka flavored vodka product launches grew the most during the 2007-10 period, rising 4.9

percentage points. The growing popularity of these flavors is exemplified by their use by the major brands,

such as Absolut and Smirnoff. Its growing popularity is partly due to the subtleness of the flavors, which do

not impart an overly potent taste to the vodka. This is a desirable feature, with consumers seeking more

natural tasting beverages.

Apple was actually the most popular flavor used in new vodka product launches in 2010. It featured on 7.9%

of these launches, rising by 5.3 percentage points compared to 2007. In contrast, pear featured in just 2.2%

of new vodka launches in 2010.

An interesting point about apples is how distillers are using the flavor to highlight regional credentials. For

example, in the UK, Chase Distillery has developed a Pure English Apple Vodka under the Naked Chase

brand which is described as the first vodka made from organic cider apples to be produced using traditional

methods. The product addresses trends for purity, naturalness and region specificity (it uses English apples).

In addition, the Absolut brand range has introduced the Limited Edition Brooklyn Vodka with Red Apple and

Ginger flavor in the US. The fact that it is tagged as containing red apples is very specific, helping it stand out

from other apple flavored brands.


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Figure 16: Apple and pear vodkas have been launched in specific fruit varieties


Growing: Citrus

Citrus was the most popular flavor type in vodka in 2010 and also the second largest growing flavor for the

200710 period, up 4.8 percentage points. Along with traditional beverage flavor favorites such as lemon and

orange, citrus flavors include some more unusual and specific varieties such as mandarin and red grapefruit.

However, traditional favorites remain the most popular. Lemon was still the leading flavor within this citrus-

flavored vodkas type and also the second most popular of all flavored vodkas launched in 2010. It featured

on 5.8% of new vodka launches in 2010, slightly ahead of orange (featuring on 4.3% of new launches, which

positioned it in fifth place on the vodka flavor leader board for 2010).

Because lemon and citrus flavors and reasonable mature, distillers are differentiating in other ways,

appropriating some of the marketing language of wine to give flavors a sense of terroir. The Coastal Citrus

variety of Moon Mountain Vodka is marketed as be

Documents

Emerging Flavors in Alcoholic Drinks