If knowledge is power, than Donna Hood Crecca is a one-woman wrecking crew. When it comes to the on-premise business, few people have the depth of experience or ready access to industry information that she does. The veteran Crecca has broad knowledge of bar, nightclub and restaurant marketing, operations, human resources and growth strategies, with specific expertise in beverage sales, promotion, service and training. Check out her credentials if you think I’m exaggerating.
Crecca holds a bachelor’s degree in magazine journalism from Syracuse University and has done graduate work in magazine publishing management at New York University. She served as the publisher and editorial director of Nightclub & Bar magazine and editor of Cheers. Before that she was the contributing editor to Chain Leader magazine for 10 years and editor of F&B Business. She is BarSmarts Advanced Certified and served as President of the International Foodservice Editorial Council. In addition, Crecca frequently presents seminars at such industry events as Nightclub & Bar Convention and Trade Show, Tales of the Cocktail, National Restaurant Association Show, Council of Hotel and Restaurant Trainers (CHART) and the Alcohol Responsibility Conference.
Eventually her career path led her accept the position of senior director of the Adult Beverage Resource Group at Technomic Inc, a marketing research firm based in Chicago. Now in casual conversation she might mention that the leading 250 spirits brands in the United States grew 3.1% in total volume in 2011, a rate slightly lower than the total market’s increase of 3.5%. Likewise, the brands collectively generated 89% of the total U.S. spirits volume of 199.7 million 9-liter cases. She was interesting before, but now she’s downright enthralling.
For beverage operators, having hard Intel on what spirit categories are growing hotter and which are trending down is invaluable. The recession affected the Top 250 spirit brands in seemingly the same manner it did everything else. Some brands are experiencing slower growth, while others have regained their pre-recession pace.
I recently caught up with the Queen of Information in Chicago and asked for her insights on major spirit trends in the U.S. Over coffee she spilled the beans.
Bar IQ: The most dominant category of distilled spirits in this country is vodka. But how is it faring with consumers? Are vodka sales in the U.S. showing any signs of slowing down? Is there any segment of the vodka category outperforming the others?
Crecca: Vodka grew nearly 7% in volume in 2011, and we anticipate another year of gains in 2012. Flavored vodka is the most dynamic segment—it accounts for 27% of the volume and continues to expand. The appeal of the “candy-shop” vodka flavors appears to be ongoing, and the Pinnacle Whipped Cream is the leading flavored vodka. However, raspberry and citrus remain the largest volume flavors. There is a ‘trendy’ factor in flavored vodkas and it will be interesting to see how the sweeter trend plays out, although we see it most likely continuing through this year and into next.
She adds that as for price tiers, depletion figures indicate that the upper end of the vodka market gained steam in 2011. As the economic recovery continues, Crecca anticipates the trend to continue through 2012. Specifically, super-premium vodkas—those priced above $27 a bottle—increased 13.5%, although the bulk of the market still is in the value and premium sectors.
Bar IQ: For much of the past decade, the tequila category was the fastest growing segment of the market. Is that still the case? And how are mezcals doing in the marketplace?
According to Crecca’s spreadsheets, tequila is no longer the growth king.
Crecca: Irish whiskey outpaced all categories with a 22.2% gain in 2011. Tequila was third fastest behind Irish and vodka with a 6.4% gain. Tequila also accounts for 6.4% of total spirits volume. As for mezcals, they accounted for 42,000 cases in 2011, up 5% from the prior year. It’s a tiny segment, but growing. With bars popping up around the country devoted to all things agave, and as the ranks of serious tequila fans continues to grow, mezcal should ride that wave to expand as well. Toby Keith’s Wild Shot is drawing a lot of attention to the spirit, as well.
Bar IQ: If you listen to the pundits, rum is catching on with American consumers in a big way. But do the sales figures substantiate those claims? What types of rum—aged, silver, spiced, flavored—are selling best in the States?
Crecca: Rum is growing, but not at the rate of vodka or tequila; it’s up 2.2% in volume. Cachaça accounts for 0.5% of total rum sales. Flavored and spiced rums are hot—Malibu, Admiral Nelson, Cruzan, Sailor Jerry, Jack, Don Q, Blackheart, and Seven Tiki—all increased their market shares in 2011. The Kraken notched a 100% gain to 150,000 cases. Bacardi, of course, remains the leader (9.5 million cases) with Captain Morgan in second place. Bacardi was up slightly, while Captain Morgan slid somewhat. The higher-priced rums—those $18 and up—grew the fastest, but the premium ($10-$17) is still the largest tier on a volume basis. We anticipate the interest in flavored, spiced and high-end expressions to continue.
Bar IQ: What about gin? Are its sales in the United States finally starting to up the charts?
Crecca: As a gin fan myself, this is tough to say, but the category declined in 2011 and we’re not optimistic that it will grow in 2012. Imported gins held their ground, but domestics slid by 4%. The category does well in the cocktail-centric cities on the left and right coasts and those hot spots in between, but it languishes elsewhere. A number of new high-end and boutique brands appear to be gaining traction with consumers, but the value and premium tier is losing steam.
By our third cup of coffee the conversation turned to whiskey and how these aged marvels are faring in these challenging economic times.
Crecca: These are good times for American whiskey. The total category was up about two points in 2011 with straight whiskeys growing nearly 3%. Rye whiskeys are on fire—up 70% to 170,000 cases. It plays right into the consumer mega-trends of authentic, American and flavorful. Some suppliers are having difficulty meeting demand.
As for the imports, Crecca reports that case depletions overall gained 1.4% and now accounts for 55% of all whiskey consumed in the U.S. While Irish whiskey is the smallest spirits category, it racked up the largest gains in 2011 and is on track for a repeat performance in 2012. The Scotch and Canadian categories were both essentially flat.
Bar IQ: Are cognacs trending up or are their sales level?
Crecca: Cognac is on an upward trajectory, unlike its domestic and imported brandy cohorts. Cognac accounts for 35% of all brandy volume. Hennessy, Remy Martin, Courvoisier and Salignac each grew; Landy’s posted a double-digit gain. Drivers included multi-media campaigns targeting Millennial generation and urban consumers showcasing the mixability and prestige of Cognac.
In closing, Crecca mentioned that wine and spirit sales are stealing market share from beer. In addition, the Millennials drink more vodka more frequently than other generations and they’re partial to flavorful spirits with great backstories. “Given that by 2018 all 79 million Millennials will be of legal age to drink, that’s the demographic to tap into,” she advises.
Can’t get enough industry stats? If you’re looking for a complete breakdown of liquor, beer and wine statistics, go on the Technomic website and order the 2012 SpiritsTAB, the first in Technomic’s Trends in Adult Beverage series. It makes for seriously great reading.
Now lest you become too impressed with the Queen of Information’s extensive knowledge, it’s only fair to mention that Crecca didn’t know the capital of Brunei (Bandar Seri Begawan) or who is baseball’s career steals leader (Ricky Henderson). Jeez, right? However, she knew everything else.