For the duration of my career in the beverage alcohol industry I have been bombarded with statements about the recession proof nature of this business. Quoting friends and acquaintances,”When times are hard people are still going to drink, sometimes even more.” I must say that I have found over the years that this has proven to be true some of the time and more often than not most of the time. However, I can also say that in the last thirty plus years that I have never experienced anything quite like what we are seeing now. Now if you are addicted to the news like most concerned, well informed Georgians are then you have probably read or heard that one of the few tax bases in the state that is up is the revenue from alcohol taxes which we wholesalers are responsible for collecting. We like to affectionately refer to this as one of the sin taxes. Let me put one myth to rest right now, the consumer will continue to drink during hard economic time and they might even drink more, but they are not spending their hard earned dollars on the same premium and luxury brands they consumed during times of prosperity. Less expensive products across the beer, wine, and spirits categories are what is drawing the consumers attention based on simple economics. So when you hear that tax dollars collected by the state are increasing despite the economy, be for warned that this does not mean the wholesalers and the retailers are making more money and the industry is in a healthy state. The state collects taxes based on the quantity sold and not the dollar value of the products, so they receive the same tax for a case of cheap vodka or wine as they do for a case of Jack Daniels or a case of Opus one. On the contrary our profits and the retailers profits are shrinking because the consumer is trading down to these less expensive brands. The good news for the consumer is that they can still find good quality products at lower prices. This is especially true in the wine business where the consumer is returning to the middle of the road, comfort brands which can be excellent values and still very good quality.
I have managed to digress from the actual purpose of this diatribe which is to describe some super premium luxury brands which have bucked this trend and managed to grow during these dark and desperate times. I would like to start in the Vodka category, which has become as convoluted as the Chardonnay category. You can just about find a vodka in any price range, any flavor profile, and certainly any country of origin imaginable. Since this is by far the largest category of distilled spirits, it has probably been hit the hardest by trade down from the consumer. In fact in many instances it seems the consumer is not only trading down, but in fact trading all the way to the bottom of the food chain. Disturbing, since the quality available in the wine category is not always so in the cheap vodka realm. One must be careful, they do not purchase products that tend to smell like petroleum, taste like lead, and lead the body down the path to cerebral hemorrhage.
Chambord Flavored Vodka was introduced in select markets only about six month ago. It differentiates itself from other flavored vodkas in that it is actually infused with another high quality spirit product to obtain its flavor profile rather than actual fruit or berries depending on the flavor. Blended with Chambord Raspberry Liqueur and packaged in the unique Chambord round bottle, this is one of the most delicious flavored vodkas on the market. It is a particular favorite of the female consumer who is looking for something light and delicate but with a real flavor profile of it’s on. The price of the 750 ml. bottle ranges from the low the mid twenties and is available market wide in Georgia, but not necessarily in neighboring states. The demand and pull in the selected markets has been incredible which has limited the expansion into more markets. I like it over the rocks with nothing added but that’s just me.
Conjure Cognac is a collaboration between the Cognac firm of Birkedal Hartmann and local music celebrity Chris Bridges, better know as Ludicris. Not only lending his name and reputation to the marketing and sales of the brand, Chris has been part and parcel of the development of the brand from the inception, actually going to France to help select blends of VS, VSOP, and even older Cognacs to go into the final Conjure blend. First introduced in Miami and Atlanta a little over a year ago, Conjure Cognac is now sold in over 35 states. In the latest Wine Enthusiast Magizine Cognac rating Conjure received a 92 rating with only eight Cognacs being rated higher and they ranged from VSOP to XO to Napoleon with pricing mostly being in the $50 to $100 range. Conjure was also awarded on the hot new brand awards this year. Conjure is a blend of older Cognacs and is priced in the market below $30. It was described as an “anti-snob Cognac” which would be great in other cocktails. Again, this is just me but I prefer in a snifter straight up.
Last but not certainly not least on our list of recession busters in Woodford Reserve Bourbon. This is an amazing bourbon which certainly has bucked economic trends. It has been highly touted as one of the finest bourbons made. It is distilled by Labrot and Graham at the old Oscar Pepper Distilley which was originally built in 1803 which makes it one of the oldest distilleries in Kentucky. It is still distilled in handmade copper pot stills in small batches. It is a slow process but the taste makes it more than worth it. It is also know for the most expensive Mint Juleps served at the Kentucky Derby. How about a $1000 cocktail! Growing at double digits again this year even though it is priced at the top of the category, it has reassured me that there are still consumers who will not compromise their standards despite a recession. God bless them one and all!
Best Wishes for the Holidays and Salute!
D. Gregory, GM Spirits United Dist. Inc.
oXYGen Financial, Inc. co-CEO Ted Jenkin is one of the foremost knowledgeable professionals in giving financial advice to the X and Y Generation.
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