White spirits such as rum, gin and vodka are undergoing something of a revival in Italy after years of sluggish growth. But the success of these clear drinks has not been enough to pull the Italian spirits market as a whole out of the doldrums.
According to a new report from drinks industry analysts Canadean, sales of white spirits grew strongly in 2002 to around 140,000 nine-litre cases. This is partly due to the fact that the spirits sector as a whole is the one with highest potential growth rate: Italians have long preferred wine and beer.
Although it is not yet big enough to be considered a major category, rum & cane spirit has provided the most dynamic growth in recent years, Canadean said. Whilst the largest increase recorded in the five leading categories was a little under 3 per cent, 2002 proved another vintage year for rum, sales of which advanced by an excellent 24 per cent.
The category is dominated by the three leading brands, all of which are foreign and account for a combined 77 per cent share of the market. In addition to the success of white rum, the category has also been boosted by the increasing popularity of dark and aged rums as after dinner drinks.
The most significant category is bitters, which apart from a brief revival in 2001, has been declining for a number of years. Bitters have traditionally enjoyed strong after dinner consumption but have come under increasing pressure from sweet liqueurs and dark rum. The development of alternative drinking occasions for bitters could provide a means of reversing this trend.
The second largest category, brandy, grew very slightly with the strong performance of foreign brandy and Cognac helping to offset the continued decline of Italian brandy. This said, Brandy only tends to appeal to the narrow audience of mature males and the growing popularity of dark rum could pose a significant threat.
Third placed liqueurs, cocktails and specialities held firm, increasing by around 0.5 per cent during 2002. Both the Sambuca and cream sub-categories enjoyed a strong year in 2002, with sales improving by over 7 per cent and 11 per cent respectively.
One point confirmed by the report is the strength of domestic brands. Of the ten best sellers overall, eight are Italian owned. The only exceptions are an imported flavoured vodka and a foreign bitter. The dominance of bitters is further underlined by the fact that six of the ten most popular brands come from the category.
Despite high public debt and a restructuring of the banking sector, Italy's economy should remain healthy in the short term - underpinned by strong product design, textiles, household appliances, tourism and fashion industries. Canadean predicts that the spirits market will increase by around 1 per cent in 2003 and 2 per cent by 2005.
For details of how to buy Canadean's report on the Italian spirits market, click here.