PROOF POSITIVE September 2003

1988-2003: The 15 years that put high-octane glamour, exclusivity and quality back into distilled spirits.


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Your Best Shot

1988-2003: The 15 years that put high-octane glamour, exclusivity and quality back into distilled spirits.

The past 15 years have been a time of unbridled global consumerism, and few categories have changed as dramatically as distilled spirits.

It didn't begin promisingly. When the inaugural issue of Wine Enthusiast hit mailboxes in the late 1980s, consumers were in the midst of "wine boom" rapture. In fact, the 1980s proved to be the pivotal decade of the last half of the 20th century for wine growth in America. As winemakers, along with restaurateurs and chefs, began to dominate the minds of consumers and the media, spirits brands that had just a decade or two before been household presences in the U.S.—names such as Cutty Sark, Old Crow, Seagram's, Canadian Mist and Courvoisier—were edged aside by the likes of Mondavi, Lindemans, Stag's Leap and Antinori.

In 1988, red, white and "light" were hip; brown, full-bodied and "hard" were decidedly déclassé. On the beverage alcohol teeter-totter in the U.S., the faster wine ascended, the quicker spirits went into a freefall. With few exceptions, the year that readers thumbed through the first edition of Wine Enthusiast, the spirits industry had become the dis-spirited industry.

By 1988, the 25-to-40 demographic was growing more financially and socially empowered than any other segment. Thus, the most critical question facing the world's distillers was: How could they win back the affection of these upscale and educated American consumers? Could their fascination with fine wines, food and consumer goods be influenced to include spirits?

The tactic that the spirits industry adopted in the mid-1990s sounded daft initially. It was a two-pronged approach: First, challenge that demographic with better, more distinctive distilled spirits than were offered in the past and, second—here's the scary part—charge them more for the privilege.

Crazy? Perhaps. To skeptics in the liquor industry the approach seemed suicidal. Did the "make it better, price it higher and they will buy" theory pan out?
Grab a bottle of $30 gin and read on.

1989-1998: Cash and cocktails
From 1989 to 1998, the phrase "luxury goods" became part of the world's lexicon. Japan, the U. S., Australia, South Korea, Hong Kong, Singapore, Canada and much of Western Europe were propelling the global economy juggernaut toward greater prosperity. As disposable income levels skyrocketed, the watchword of the LBO-IPO-Greenspan era became "quality."

Consumers wanted to reward themselves for the long hours they put in at the office or the successful deal that they had engineered. Why ingest anything that was viewed as being less than the best? Carpe diem, baby, with dinner at Lutèce or Spago and a bottle of '61 Château Latour. Then savor a glass of Glenmorangie 12-Year-Old Port-Wood-Finish Single Malt Scotch, Daniel Bouju Empereur XO Grande Champagne Cognac or Distillers' Masterpiece 18-Year-Old Cognac-Cask-Finished Kentucky Straight Bourbon. Upper-echelon spirits had become fresh curiosities that enhanced the enjoyment of wine and food rather than competing with them.

To the new breed of uberconsumer, vodka, once dominated by good but inexpensive brands like Smirnoff and Popov, suddenly meant superpremium choices like Absolut, Ketel One, Stolichnaya Gold and Van Gogh. Scotch, once the sole territory of standard blends such as Cutty Sark, Dewar's White Label and J&B Rare, was now equated with Bowmore single malt from Islay, Highland Park single malt from the Orkney Islands, and Johnnie Walker Blue Label blended Scotch, which sells for a hefty $40 for a 2-ounce glass.
Brandy, long lorded over by cheap and cheerful brands such as Christian Brothers, Presidente and E & J, now included top-shelf bottlings such as Germain-Robin V169 single barrel pot-still brandy from Northern California; Château de Fontpinot Très Vieille Réserve Grande Champagne Cognac, and Francis Darroze 1973 Domaine St. Aubin Bas Armagnac from France. Rum, long ruled by familiar Puerto Rican brands like Bacardi and Ronrico, now hailed from Haiti (Barbancourt Estate Reserve 15 Year Old); from Jamaica (Appleton Estate V/X); and from Guatemala (Ron Zacapa Centenario). Gin, for decades dominated by standards Seagram's, Gordon's and Gilbey's, became the playground for trendier, upscale, cleverly packaged brands such as Bombay Sapphire and Tanqueray No. Ten.

The "standard" spirits of the 1950s, 1960s and 1970s, while perfectly adequate, were, by the late '80s and early '90s, viewed as homogenous. The genie had been let out of the gin bottle.

Not only was there unprecedented variety among distilled spirits, there was quality and uniqueness, two virtues that appealed to intrepid young consumers who were busy establishing a social image. In their eyes, the act of requesting a shot of Booker's Small Batch Bourbon or Eagle Rare 10 Year Old Single Barrel Bourbon rather than regular Jack Daniel's, Seagram's V.O. or Early Times conveyed to friends and business associates that they had "arrived." Idiosyncrasy in fine spirits became a coveted asset.
Also critical to the changing spirits climate of the early '90s was the resurgence of the cocktail culture. Young consumers became acquainted with flavorful premium and superpremium white spirits via the martinis, Cosmopolitans, mojitos and other new-wave cocktails prepared by innovative bartenders in major metropolitan areas.

1999-2003: Do me a flavor
As the 20- and 30-year-old cocktail drinkers of the late '80s and '90s matured and approached the millennium, they retained their ardor for top-quality spirits and the cocktails made from them. The world's distillers complied by offering product extensions: Cruzan light and dark rums, for example, spawned a wide range of flavored rums. Glenmorangie 10- and 18-year-old Malt Whiskies launched a whole passel of Glenmorangie Wood Finished Malt Whiskies. But the most fertile ground for line extensions was in the vodka category. Flavored vodkas now nearly outnumber unflavored vodkas, accounting for roughly 17 percent of all vodka sales in 2002. In 2003, the introduction of new superpremium vodkas often include the built-in line extension flavored versions, sometimes offered in sampler packs.

By all statistical accounts, case sales of premium and superpremium brands of distilled spirits have continued to rise steadily over the last five years, not just in the U.S. but worldwide. Indeed, most of the world's fastest-growing spirits brands, according to Drinks International (May 2003), fall under the premium or superpremium category. From 2001 to 2002 some of the fastest-growing spirits brands included Sauza Tequila (up a whopping 37.5%), Crown Royal Canadian Whisky (15.2%), Captain Morgan Spiced Rum (14.9%), Courvoisier Cognac (10%), Bombay Sapphire Gin (9.4%), Hennessy Cognac (6.1%), Jameson Irish Whiskey (5.8%), Appleton Jamaican Rum (5%) and Finlandia Vodka (3.7%).
For dedicated distilled spirits drinkers, life has never been better: The astounding variety of high-end spirits in the marketplace ensures that they are spoiled for choice and have a continuing opportunity to experience the best of the best. A lovely position to be in, isn't it?

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