While the flavoured alcoholic beverage (FAB) market in Europe is dominated by the UK, the category is growing steadily in other countries as well, not least Germany where the introduction of ready-to-drink variants has given a welcome boost to the spirits sector.
A new report from market analysts Canadean shows that FABs registered spectacular growth last year in a German spirits market which was otherwise in decline.
FAB volumes were up by more than 500 per cent over those of 2001 last year, while out of the remaining 11 categories of spirits, only vodka and bitters bucked the downward trend - albeit more modestly than FABs.
Strong branding and investment have resulted in a range of successful FAB products with Smirnoff Ice and Bacardi Rigo now the star performers in the German market, said Canadean. The rise of the category is attributed to its having become the fashionable, favoured starter drink for those moving on from soft drinks to alcohol.
However, while volumes have expanded to nearly 850 thousand equivalent spirit cases since 1998, Canadean stressed that simply launching a product onto the market was not enough to guarantee success. Several products were launched and discontinued in the course of last year as they failed to achieve targets, and Canadean warns that the sector appeals to "those with the most fickle tastes and the lowest brand loyalty".
Some of the dynamism of the FAB category has spilled over into the vodka segment, with Smirnoff in particular benefiting from its RTD version. However, while Smirnoff strengthened its overall market position in Germany, it still plays second fiddle there to Gorbatschow, produced by local company Henkell & Sohnlein. But Canadean stressed that despite an almost 5 per cent improvement, vodka volumes have yet to climb back to the levels reached in 2000.
The only other spirits category to show any growth was bitters, although this was less than one per cent and the strong performance of Pernod Ricard's Amaro Ramazzotti served to emphasise the strong competition local brands face from imports.
FABs successes are blamed for helping push liqueurs and cocktails volumes below eight million cases for the first time in 2002. The category is particularly losing out among consumers who want a low strength fruit flavoured drink, according to Canadean. At the same time, schnapps, the third largest category, is shedding up to half a million cases a year and flavoured schnapps may ultimately be completely overrun by FABs.
One category where the full influence of FABs has yet to be felt is rum and cane spirits. Cachaca, the Brazilian cane spirit, maintained its growth in 2002 on the back of the continued popularity of the caipirinha cocktail, but Canadean said that the drink has yet to realise its potential as a choice for those who want an exotic alternative to FABs.
White rum, by contrast, is generally preferred as a mixer base and may yet benefit from the growth of rum based FABs.
For further details of Canadean's spirits watch report on Germany, and on other reports by the company, click here