Branded but not brandy

23 December, 2015

Williams & Humbert too have a spirit drink version of Alfonso, its Brandy de Jerez. Though it is an “extension” not a replacement, and clearly labelled as such. But for those swapping their Solera with a spirit drink, making minimal changes to packaging, bar the word spirit drink, there have to be questions. 

Changed market

Medina tells us how the market changed: “On the one hand, the exit of the main Solera brands has dragged the rest of the Soleras out and, as a consequence, Brandy de Jerez Solera has practically disappeared; the volumes of Brandy de Jerez have gone from 60m bottles in 2008 to less than 20m in 2015. 

“On the other, there is unfair competition to the few remaining Brandy de Jerez Soleras and misleading conduct to consumers that are not aware of the change, since the presentations of the former brandy brands — now spirit drinks — are practically identical, and they keep using terms and symbols
traditionally associated with brandy.”

This end destination can be seen in the Philippines, where the brandy category leader Emperador is made from mainly molasses but labelled brandy. In recent years its own Emperador Light, at 27.5% abv, has taken over as the market leading variant. Spain, though is a more mature brandy market with a more educated consumer. One that might care that what they thought was brandy is no longer brandy. 

The Brandy de Jerez Lustau brand operates in the premium position of the market but Teresa Gutiérrez, head of international department at Grupo Luis Caballero and Bodegas Emilio Lustau, says it’s a matter of horses for courses: “It is understandable and respectable that companies adapt to changes in consumption trends. In Jerez we have seen this phenomenon in the lower segments. At Lustau we do not consider this possibility. We stay true to the origins and traditions and we will never jeopardise all the hard work behind the recognition of quality of our brand.”

Osborne, Gonzales Byass, Williams & Humbert and others are protective too – but perhaps not across all their brands. For their top end, long-aged brandies, it is quality credentials that sells. Indeed Torres, a brand of Catalonia rather than Jerez and the Spanish brandy leader, is committed to grape spirit in all of its products and to building the international image of the category. But to the many of the major Brandy de Jerez players, it’s a case of a two-pronged attack: building the image of their premium wares – particularly internationally and among bartenders - while also becoming more profitable at the volume end of the domestic business. 

But one wonders if these strategies can coexist. They are pulling in separate directions, rather than singularly drumming the beat of Spanish brandy the alternative to cognac. It could be argued these spirit drinks boost a beleaguered local market, and if exported, are destined for price-sensitive, tradition-indifferent consumers. 

But Spanish brandy needs to look to the future. Do entry-level cognac companies extricate themselves from their appellation and fight it out with mass market spirit drinks? Quite the contrary, their market positioning speaks of confidence in their products.  

Young Spanish consumers may be attracted to lighter, quaffable spirits drinks now, but one day this may change. There is an undeniable trend worldwide for millennials rediscovering their food and drink heritage. Look at bourbon in the US, gin in the UK and mezcal in Mexico. Drinking habits circulate. What was old hat yesterday might tomorrow be the latest hipster headgear. What feelings will Spanish consumers have for brandy then? A light, sweet, indescribably produced spirit, that’s easily mixed. 

Will they even know brandy is supposed to be made from grapes if their first taste of Jerez is a spirit drink? Convincing them that Spanish brandy offers terroir, tradition and craftsmanship and that they might want to spend more than €10 on a bottle will be to climb marketing’s Mount Everest.      

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