Winter 2018-19|volume 12|Issue 2

    Raise Your Spirits

    Spirited Folks: The Consumer

    Spirits – noun. An alcoholic beverage that is distilled rather than fermented; the liquid containing ethanol and water that is distilled from an alcoholic liquid or mash—often used in plural.

    Max Miller

    Max Miller

    This is the second of a four-part series on the personalities and skills that are a part of the Spirits Industry Ecosystem.

    Take a walk down the aisles of your local spirits store and observe the growing number of selections across every spirits category. Whiskies (especially bourbon and rye) occupy shelf space that now rivals the massive wall of vodka that used to dominate many stores. Liqueurs offer a wider variety of exotic flavors and botanicals. Rums are not just from the Caribbean any more. The tequilas are no longer all Blancos. We have an abundance of choices.

    In order to understand the drivers of this proliferation of choices, we have to look no further than the mirror. Let’s take a look at ourselves—the consumers—and examine how our consumption habits and behaviors are driving the growth of the spirits category and adding new dimensions to the spirits ecosystem.

    When Raise Your Spirits was founded 13 years ago, I used to spend a lot of time watching and reading about consumer behaviors. Consumers (in Penn.) would spend an average of three to four minutes from entering the store to checking out and leaving the store. Their decision about what they were purchasing was made before they even walked in the door. The only action was to find what they were looking for. The whole retail macro-environment was essentially built upon a transactional platform; i.e., come in, get what you need, and then get out. Even at the bar or restaurant, the behavior was similar. Order what you are accustomed to and that’s that. Several sociocultural factors (in the United States) came into play that caused a shift from this transactional environment to an experiential environment.

    I’ve come to call these factors the “three Cs”: coffee, craft, and context. While these factors are not at all intended to reflect the exhaustive list of contributors to the shift, they are representative of some key societal shifts.

    Coffee. I remember the days of the cup of coffee that was less than a dollar. Enter Starbucks and the coffee-drinking experience eases into a world where the coffee was a facilitator for something greater: interactions with others. Whether the coffee was for a business meeting or a meeting with friends, the coffee shop became a meeting location with coffee being at the center of a larger experience. This coffee-drinking experience evolved into a willingness to try new coffees and flavors driven in large part by the knowledge of the employees and the extensive product varieties. What had previously been a category driven by limited choices, low prices, and a pure need to get some caffeine was replaced by a desire to spend time savoring the coffees and a willingness to try new coffees. This started to usher in a new era of experiences that began to bleed over into other industries.

    Craft. Two of these other industries were the craft beer and spirits industries. Craft beer first came on the scene and offered an alternative to the flavor profiles that big brewers had been offering consumers for over a century. As consumers experienced these new flavors, their willingness to try new flavors also grew. The number of craft breweries has continued to grow and innovate, and on its heels the craft spirits industry is following suit. Four-grain whiskies, exclusive grain profiles, terroir-driven flavors: All of these innovations in the spirits industry are fueling an environment where consumers want to taste and learn. Couple this with the craft cocktail movement offering consumers variations on traditional cocktails as well as the infusion of new ingredients, and we have the makings of a drinking culture that has
    a thirst for knowledge, experimentation, and education.

    Context. In almost every mainstream or upscale bar now, the experiential movement has given rise to the flight platform; i.e., consumers are offered a sampling of various spirits in the same category. The practical impact of the flight experience is to give the drinker some context as to what is driving the flavor differences between the various samples. Once they know what is driving these differences, that contextual knowledge carries over into influencing their buying behavior.

    I talked with several friends and acquaintances about the how their tastes have changed, if at all, over the years. For the most part their tastes and preferences and/or behaviors evolved along the following continuums: from chugging to savoring; from sweet (simple) to savory (complex); from no cocktails to cocktails; and from drinking to studying (learning about the spirit is as important as drinking it).

    This exemplifies that we—as consumers—are changing. As a result, distillers around the United States, and around the world, are looking to create experiences to match and support our evolution. The distillery must have a tasting room before you get to the gift shop; the online presence must be sensory, not static; the spirit’s unique story and handmade production justifies the premium price. Relationship first, purchase second.  The evolution of consumer preferences is driving demand for a whole new level of experiences. I, for one, stand ready to experience what this rapidly evolving market has to offer.