Herbal Hotspot

28 October, 2013

As to the coming year Jägermeister is quietly confident it is still in a position to grow. “We expect the euro region to continue its struggle with the debt crisis in 2013,” says Paolo Dell’Antonio, spokesperson for the executive board of Mast-Jägermeister SE. 

“However, providing the general economic difficulties in southern and eastern Europe in particular do not intensify significantly and the upturn in the US gains strength, we expect a moderate increase in sales.”

It’s often the case that if the category leader is in good shape then so is the category and, overall, the herbal bitter liqueurs market is a good business to be in. It’s not massive in comparison with the likes of vodka but over the 10 years from 2001-2011, it moved from 22 million cases to more than 30 million cases (IWSR). Considering the taste factor of these brands is – to be polite – at best challenging, this growth is no mean feat.

“It’s not big business but it is moving in the right direction,” says Anthony Schofield, CEO of Jan Becher, a Pernod Ricard-owned company and Czech Republic-based producer of Becherovka. 

The Czech herbal liqueur is an icon in the country due to its rich heritage, aided by a history which spans more than 200 years. 

“In Prague it’s everywhere,” says Schofield. “But, while there is genuine regard for the brand among all age groups, the younger consumers are not drinking bitters, they are looking towards imported brands – particularly dark spirits, so it’s a double edged sword.”

As a result the bitters market is declining by around 10% a year but Becherovka’s fall is more in the order of just 2%. As a result the company is looking to exports to offset the decline at home – and the strategy is paying off.  Becherovka is finding a ready market in the old Communist Bloc markets such as East Germany, the Ukraine, Belarus, Kazakhstan, Armenia and Russia itself.

“These are the key markets. In Russia we have concentrated on Moscow and St Petersburg – and if growth here and in the Ukraine is maintained we are confident that in two years our domestic to home sales ratio will be50:50,” says  Schofield. 

Future potential

Of course, other brands have noticed the potential in both Russia and the Ukraine so Becherovka is facing growing competition from the likes of Jägermeister which, with its heavyweight marketing, including the freezer tap machine and the Jäger Bomb (where the liqueur is mixed with Red Bull) has immediate youth appeal and has hit the market running.

However the Russian traveller is important to Becherovka and there are two flights a day from Russia to the Czech Republic which has boosted the brand’s showing in duty free. 

“We are also doing well in duty free – sales are up 20% year on year and at Prague airport we estimate that every other shopper buys a bottle of Becherovka,” says Schofield.

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