Brand Spirits: Liquor as a Luxury

The premium alcohol category is booming, with the global market expected to reach $1.7 trillion by 2023. Increased demand for craft spirits and artisanal drinks has introduced a bevy of new brands while many pre-existing labels have pivoted to cut through the noise in an oversaturated and shifting category. 

Despite an overflowing market, nowhere else provides such a perfect foundation to cultivate perceived value. Brand spirit and story are the engine of the luxury drinks model. 70cl of liquid for £4000 doesn’t sound like a great deal on paper but its place on a shelf, its proximity to moments and its contribution to making memories (if ever opened) is invaluable. 

Luxury Liquor Trends

Changing Attitudes to Alcohol

Off the back of a two-year at-home bartending stint during lockdown(s), consumers are adopting a more flexible approach to their alcohol intake, with wellness goals being a motivating factor for moderation. 

In terms of the HNW and mass affluent, super premium collectibles and small-scale luxuries are drivers in the ‘drink less, but better’ attitude many are subscribing to – a significant percentage of which are younger, usually Gen Z. 39% of the cohort in the US are happy to splurge for a luxury tipple, even for a casual night in. 

Appealing to this, Italian brand NIO Cocktails have been on a mission since 2017 to give people the quality of the world’s best bars, delivered straight to their door. 

This positioning, partnered with the fact that bar carts and drinks trolleys have been on a permanent upswing in terms of must-have interior decor (perhaps to avoid the uni house/fraternity vibe of lining up liquor bottles on window sills) and a much more experimental consumer base, is one driving a cocktail culture revolution. 

A recent viral TikTok inspired a 501% increase in searches for negroni sbagliatos (with prosecco in it) – safe to say, booze is on the collective brain and increasingly, it’s the little-known that is being longed for. 

“What has been little reported is the fact that the pandemic has made a great many of us more adventurous drinkers, with sales of more unusual drinks rising strongly, together with wines from countries that don't usually interest mainstream consumers.” – Will Smale, Business Reporter, BBC

In the UK alone, 50% of beer drinkers and 47% of wine drinkers are being much more adventurous with their taste preferences than they were pre-pandemic. 

At the same time, and as alluded to previously, sobriety is soaring – in Europe, 60% of consumers are actively reducing their alcohol intake and in the US, non-alcoholic spirit sales saw a massive 116% increase in the year ending May 2022. 

Motivations have primarily been attributed to improving general wellbeing and/or saving money but it definitely doesn’t hurt that these new no- or low-booze beverages have incredibly cool branding. 

The Rise of NoLo Brands

The antithesis of the vintage hard liquor heralded in some of the world’s most iconic ads, NoLo brands have proven that, despite their lack of romantic notions, their once-niche industry possesses a wealth of opportunity. 

With year-on-year increases of about 100%, NoLo sales reached US$10 billion globally in January 2022 (unsurprisingly the Gregorian calendar’s most sober month) and has only continued to rise. 

The sector is predominantly driven by 0% alcohol-by-volume products, from UK-based Three Spirit’s Blurred Vine wines and Seedlip’s gin-inspired spirits to Australian company T.I.N.A’s sparkling, oolong-infused cans, ‘made for late nights that lead to unforgettable moments’ – all of whom are reframing the social function of drinking in very aesthetically pleasing ways.

Slightly further along the scale, a moderate but not teetotal ideology has been taken towards alcohol consumption. Dubbed the ‘semi-sober’ approach, 46% of Gen Z of legal drinking age and 36% of Millennials in the UK are considered ‘substituters’, swapping full-strength drinks for low-/no alcohol on some (but not all) occasions.

In order to cater to this emerging cohort, brewers, vintners and distillers across the world are conjuring mid-strength products that allow consumers to drink in more moderate manners. 

New York-based brand Body, a 10x distilled vodka containing 25% less alcohol than standard 80 proof, is one ‘Lo’ disrupting the liquor industry with its refreshing, light and fun visuals and a spirit founded in ‘owning your night’ through avoiding next day consequences (i.e. the mighty hangover). 

On our side of the Atlantic, British brand Decem crafts spicy blends of botanicals in light alcohol spirits (10% ABV – Decem translates to ‘ten’ in Latin), designed for long nights to remember. 

Visually pleasing and delicious, NoLo brands won’t be going anywhere but up in the coming quarters. Perhaps even following their alcoholic counterparts into web3. 

Taking a Shot at Tech

Investing in the crème de la crème of premium alcohol is nothing new. It’s ultimately quite typical within the confines of traditional luxury. Wine cellars and speakeasy style bars aren’t uncommon in high net worth homes, filled with the rare and collectible. 

But the tradition is taking a modern twist. Alongside experimental taste trends translating into more versatile portfolios, the collector persona is not ageing like a fine wine. The opposite in fact, with Millennials now constituting the largest and fastest-growing cohort in the space.

Perhaps driven by this controlling share of consumers or perhaps just an inevitability with the way the world is going, alcohol investment is leaning into tech to ‘add another layer of exclusivity and experience, as well as to help investors feel more secure in their purchases.’

Blockbar, a US-based luxury NFT marketplace pairs digital assets with exclusive physical bottles stored in temperature-controlled warehouses until the owner collects or sells them. 

If an owner settles on the latter, Blockbar handles all resales in which the brand receives a cut each time the asset changes hands – a financial incentive for producers and a security one for buyers through validating its authenticity. 

By ‘burning’ their NFT – that is, requesting the physical bottle – the asset is dissolved and the bottle is shipped to the owner for consumption, IRL display or simply dinner party kudos. 

In October 2022, the marketplace announced their latest venture with luxury champagne brand Perrier-Jouët. It’s the brand’s first foray into the metaverse, having been founded in 1811 (talk about timeless) and Blockbar’s first champagne drop.

Paired with the last of the 2007 Belle Epoque bottles adorned in 24-carat yellow gold,  each design takes five of Orfèverie Felix’s master goldsmiths two days to create – their painstaking work producing near-unattainable beauty, from perfect dimensions wrapped in delicate floral lacework to the uniquely-engraved, anemone-shaped detachable pendant that comes with it. 

Buyers also receive an exclusive invitation to Maison Belle Epoque in Epernay, France, the former home of Perrier-Jouët’s founding family. 

It’s a fantastical, tech-enhanced imagination of the brand for dedicated fans and collectors. Even if one doesn’t buy during the initial drop, lusting after luxury is part of the magic. 

AI & Personalisation

As premium and luxury alcohol products become more sought-after, educational experiences add significant value to the brands offering them. 

Launched in 2019, Diageo X Vivanda’s ‘What’s Your Whisky’ digital platform guides customers to discover their flavour profile using their artificial intelligence ‘Flavorprint’ technology. 

Through a series of questions, the tech ‘maps consumers’ flavour preferences against a large proprietary sensory database of foods and aromas, to generate a digital representation of their unique ‘flavour print’ before recommending brands they’ll enjoy.

Curating personalised taste profiles both online and in-store, the AI is the defining factor in Johnnie Walker’s immersive Journey of Flavour on Princes Street, Edinburgh. It tailors the drinks offered to customers to suit their palate, and with more than 800 flavour combinations available, you could visit every day for more than two years and not have the same experience twice.

Not only does personalisation denote a higher quality of experience and product, it inspires consumer confidence in settings and conversations that traditionally have high barriers to entry in terms of knowledge, usually reserved for connoisseurs and collectors. 

The experience has been such a success Diageo recently acquired Vivanda and the Flavorprint AI in June 2022, looking to found tomorrow’s innovative tech that further connects customers through sensory insight. 

From finding your brand spirit (A.K.A your reason to be) to architecting intoxicating digital experiences (including community platforms), we can help you break the boundaries in the luxury alcohol category, give us a shot at hello@matterofform.com.