SAMBUCA SUPPLIERS need to premiumise or prepare to pay the price – that’s the stark warning from analysts if the category wants to stem decline and burn brightly.
A few years ago flavours were, rather contentiously, driving the sambuca category. Now consumers are turning their backs on flavours and calling for classic sambuca or a more premium alternative. This is something suppliers are all too aware of.
“Sambuca competes in a busy marketplace,” says Craig Chapman, brand manager for Luxardo at Cellar Trends. “As sambuca brands, we are not only competing with each other to win listings, but we’re competing with a host of other liqueurs all vying for the same consumers at that point of purchase.”
Sambuca is under threat from tequila in its second largest market, according to research company CGA Strategy. The Mexican spirit has experienced strong growth in the UK on-trade in recent years and taken market share from the struggling Italian drink.
Tequila has premiumised and recruited new consumers via celebrity endorsement at a time when sambuca sales have declined. Premium now accounts for 21% total GB on-trade tequila volume, up from 16% a year ago and only 12% two years ago, according to CGA Strategy. On-trade sambuca volumes fell flat the end of 2014, with declines escalating throughout 2015 to a low of -7.5% at the end of November. However, 2016 has seen strong recovery in the category and declines have now softened to -2.6%.
“Sambuca hasn’t been able to capitalise on the premiumisation trend and, as such, very few premium sambucas are widely available in the GB on-trade,” says CGA Strategy account director Jonny Jones. “Unless suppliers can premiumise the category I would expect to see volume continue to decline.”
Tequila has managed to tap into key consumer drivers, such as heritage, discovery and premium ingredients and sambuca suppliers should look to do the same, Jones says. “Sambuca suppliers should look to follow suit in their marketing communications in order to target the ever more discerning millennial consumers who make up the bulk of visits to the late night trade. If they can do this successfully then there may be hope for premium products to offset the current decline seen in mainstream sambucas.”
The growth in flavoured sambucas has tailed off in recent years. In the UK, flavours are still a significant part of the category, accounting for 12% total volume compared to the 4% that flavoured vodka holds of total vodka volumes.
“However,” says Jones, “flavoured variants are declining ahead of the category and have lost two percentage points share of category in the past year alone. The reason for this relates back to the push for premium. Flavoured spirits are often seen as less premium than their non-flavoured counterparts. “So premiumisation may be having an even bigger impact on flavoured sambuca than total category,” the analyst adds.