Across the globe, liquor is still a local game.
Global brands account for only 60 of the top 180 booze brands, according to the latest annual ranking of liquor brands that have sold at least 1 million 9-litre cases by Drinks International and Euromonitor International.
The reason why local brands still rule is that Asia accounts for roughly half of global spirits volume. And consumers in massive markets like China and India still gravitate to cheaper, locally made booze, said Jeremy Cunnington, senior alcoholic drinks analyst at Euromonitor. "They are cheap products and relatively low quality because that is what the consumers [can] afford to buy," he said.
This explains why a brand such as Jinro Soju remains the top-selling spirit in the world, with more than 61 million 9-litre cases sold in 2011, and a Chinese spirit category "baijiu" accounts for 25% of global spirits volume, according to the report, called "The Millionaires' Club." Of course, global brands have major opportunities as emerging market economies grow, driving a thirst for more premium -- and prestigious -- offerings.
Ad Age got a sneak peek at the report, which will be released on Monday. Here are 10 trends that caught our eye, in no particular order:
American whiskey is rolling
Although U.S. whiskey only accounts for about 10% of total whiskey volume internationally, foreigners have a growing appetite for it, as Ad Age pointed out recently. The top export is Jack Daniels, which jumped to No. 19 on the Millionaires list from No. 21 last year, with good growth in France, U.K. and Germany. Meanwhile, Jim Beam (37), Maker's Mark (155) and Wild Turkey (162) were among the fastest-growing whiskies in the world.
If there is one thing that brings the world together, it is vodka, which has the most entrants on the list at 52. Traditional vodka-powerhouse regions in Eastern Europe are well represented, as are North American-based brands. There are also entrants from India (Magic Moments) and Brazil (Orloff). And the nation of Kazakhstan marks its place on the list for the first time, with a vodka brand called Haoma, made from artesian drinking water and malt alcohol, giving it a "soft" taste, according to Euromonitor.
Smirnoff still on top globally, but growth is "disappointing"
Speaking of vodka, Diageo's Smirnoff remains the top global spirits brand at No. 2 overall, trailing the local soju brand Jinro, which Ad Age profiled last year. Smirnoff blows away its closest vodka rival with more than double the sales of Pernod Ricard's Absolut. But the report calls Smirnoff's growth a "disappointing 1% due to the brand's maturity in many of its key markets, such as the U.S. and U.K., which has not been adequately compensated for by strong growth in markets such as Brazil."
Diddy getting it done for Ciroc
But Diageo still has a rising star in Ciroc vodka, which checks in at No. 132 on the list, with strong growth fueled by a marketing campaign that since 2007 has featured hip-hop mogul Sean "Diddy" Combs. Overall, Diageo grew its millionaire brands from 14 to 16, lagging only Pernod Ricard and Indian spirits giant United Spirits, which both have 22 . Diageo bought one its new entrants, acquiring the Yeni Raki brand. (Raki is a category of liquor popular in Turkey and nicknamed "lions milk" because it turns white when mixed with water.)
Baijiu growth is out of this galaxy
A lot of Westerners might never have heard of a Chinese spirit called "baijiu," but the category accounts for some 25% of global spirits volume and is "growing strongly," according to the report. The top brand is something called Red Star Er Guo Tou from Beijing Red Star Co. Itching to try it? Be warned: The Urban Dictionary describes baijiu this way: "Pure distilled evil in liquid form. Chinese firewater that could be used to put a man on a moon of a planet in a far of galaxy."
Emperador brandy winning fans ... and voters?
The Philippines has a boozy take on democracy: According to custom, drinks are offered to voters to convince them to attend campaign rallies. And the fact that there were several elections in 2011 helped spur growth of Philippines-based Emperador brandy, whose phenomenal growth last year established it as the world's top-selling brandy putting it at No. 4 overall on the Millionaire's list, according to the report. But marketing played a role, too, with the launch of a lighter version.
Single-malt Scotch breaks through
Diageo's Johnnie Walker remained the biggest whiskey brand in the world, with strong growth in Brazil, South Africa and Russia. But beneath Johnnie, a plethora of local Indian whiskeys dominate, including Officer's Choice, McDowell's No. 1 and Bagpiper. Meanwhile, William Grant & Sons' Glenfiddich brand debuted at No. 172 on the full list, marking the first time a single-malt scotch made the ranking. And the report hinted that another single-malt, The Glenlivet, could be joining the Millionaire ranks soon.
Bacardi leads rum, but future could be spicy
Bacardi is still the king of rum, but the brand's growth was "weak," according to the report, noting that it suffers from "overexposure in its core markets of North America and western Europe." The key could be its move into the dark and spiced rum category with its new Oakheart variety, the report states.
Patron coming on strong
In tequila, Beam Inc.'s Sauza and Brown-Forman's El Jimador rank No. 1 and No. 3, respectively, in the category. But the one to watch is No. 2 Patron Tequila, by Patron Spirits, which had the best growth as drinkers traded up.
The 'premiumization' of the West
And plenty of drinkers seem to be trading up in the western markets. Premium brands such as Ciroc and Ketel One are surging, but standard and economy brands such as Seagram's and Gordon's are struggling, the report notes. Indeed, the Distilled Spirits Council of the U.S. reports that "super premium" brands grew by 9.3% in volume in 2011 in the U.S., compared with just 0.9% growth in value brands. Still, economy brands UV and Svedka vodkas bucked the trend with solid growth, according to the Millionaires' report.