FROM MASS TO CLASS:EVOLUTION OF LUXURY SPIRITS & THE CONSUMER

It’s crazy how the world moves these days.  Everything is always moving into a new dimension.  And there should always be a superior product to every normal product or even every premium product.  It’s hard to believe that premium products in the market these days have a superior brand over it.  And these products or services get broadly termed as “Luxury goods.”  What are luxury goods all about?  They are those Products and services that are not considered essential and are associated with affluence.  The concept of luxury has been present in various forms since the beginning of civilization.  Its role was just as important in ancient western and eastern empires as it is in modern societies.  With the clear differences between social classes in earlier civilizations, the consumption of luxury was limited to the elite classes.

Every industry has seen this transition, an evolution of luxury goods in to their portfolio.  I was kind of shocked to understand a luxury item is an item for which demand increases proportionally as income rises, and is a contrast to a "necessity item", for which demand is not related to income. Here today right now I do not want to play around with such huge topic as I will be talking to you about this small segment that interested me and that’s nothing other than “Luxury Spirits.”

As I told you earlier normal has become an understatement for most who are living in this world and luxury has kind of become the in-thing.  People demand for more classic more finer and more glorious products .Consumers are continually looking at something which delivers more quality setting them apart from the rest of the world.  The word “Luxury” has transformed from not just being the price element but to quality, unique experience, satisfaction achieved and much more.

It’s a simple game.  When people have more disposable income and their lifestyle itself has changed from wanting luxury brands, the beverage market which was not a key market 15 years back, has to live up to the expectations of the luxury segment like every other market.  And mind you, this market where the consumers may be drinking less but better is going to be the reality for the beverage industry in some years to come.  The price part of this segment is rarely looked into as each luxury spirit brand has a story to tell, a perception and an experience to be lived and cherished.  As I told you there is a unique story attached to every Luxury spirit.  This story itself makes it special and worth all the money and sets it apart from everything else and that story itself forms a means to market it.

According to Rohan Jelkie, Training Manager at Tulleeho Beverage Innovations, Every luxury spirit becomes important or special because they use superior raw materials for its production, may have an extra distillation process, usually have a unique production process, a unique finish, high end packaging and the entire marketing spend for the final product would be around 25% of the total revenue.

Let’s take the example of one of the luxury spirit which has a story to tell.  Cognac has always been special to the world.  It was and still is a Gentle Man’s drink.  But if you happen to hear about the story of LOUIS XIII de Remy Martin which comes under the portfolio of Remy Cointreau you will be amazed.  I was amazed when Vincent Cleme, Brand Ambassador of Louis XIII, India shared it with me.  Well the bottle of Louis XIII is a Pine Crystal bottle whose neck is 24 carat gold plating and he says that it takes 4 days and 7 people to make just the bottle.  The spirit inside has a bigger story to tell.  Being a blend of over 1200 euax de vie , of which the least aged is at least 40 years old.  After the master blender blends this its aged for over a century that is the person who blends the wine will never get to see the spirit hitting the market and may be even their children won’t.  And this unique process gives it its tagline –“A Century in a Bottle.”  Going a step further the Louis XIII launched a new limited edition collection called the BLACK PEARL, which were 786 individually numbered Barracat crystal bottles which got sold out in 2 months within its launch.

There are more examples, the Tequila Ley .925, which hold the Guinness Record for the world’s most expensive tequila is yet another luxury spirit which is a 2kg show of gold and platinum.  Also the very famous gin, Martin Muller, makes a journey of 3000 km before its bottled.  It travels from England to Iceland where it  gets blended with the water from Iceland and back to England where it is finally bottled. The impressive story of Ron Zacapa, which is a rum produced in Guatemala, a place which borders Mexico is the only rum which is produced using the Solera system of fractional blending which is used in the production of Sherry.  Coming to vodka, my personal favourite -Grey Goose of Bacardi Martini carries the tag line “The world’s best tasting Vodka.”  Dimitri Lenzinska ,Global brand ambassador on up-selling grey goose vodka proudly tell us about the Grey Goose being the only vodka having a respected maitre de chai from cognac. Made with 100% winter wheat and respecting the quality of wheat and the distillation process creates all the flavours specific to Grey Goose Vodka, he says.

Every big producer, may it be Diageo , Pernod Ricard, LVMH, Remy Cointreau etc have extended a new portfolio as Luxury Brand which is superior to the premium brands in the portfolio and that’s how the wind of luxury has struck the beverage industry.  The luxury beverage market in India is booming at a very fast rate.  Indians are trying new and more expensive spirits to experiment or even demonstrate status and the latter is a good deal for us who are in the industry :P.  The ban on luxury advertising in India is a huge set back though .It takes away a major marketing tool I must say.  But I am sure the marketers and brand managers always come up with better practices and better ways to let the world know about their brands and its uniqueness through launch parties, tasting sessions and lot other means.

 I believe this trend in luxury spirit will live and enjoy the status in the economy for a real good time and until then don’t forget that "beer has become a bit boring now, there is more of a statement created when you walk into a bar and order for a Grey Goose Martini."