Liquid Thinking

With finances squeezed and costs rising, consumers are beginning to prioritise their spending, cutting back on luxuries to make ends meet. So, what does that mean for the luxury drinks market that has been flourishing over the past 18 months? Welcome to the new era of mid-level luxury.

Is the post-pandemic hedonism over so soon? What happened to the roaring twenties? Any predictions of a decade of creativity, exuberance, and letting one’s hair down seem to have been somewhat dampened by the mere fact that existing is getting ever more expensive. Which is a bit of a bummer really.

Measures may now have been put in place to freeze utility costs (hurrah), but the effect on consumer confidence remains to be seen. In the meantime, there’s what promises to be a long, fairly pants winter to get through. Wrap-up warm mate.

We’ve already discussed on these hallowed pages how luxury products have been booming of late. See here to catch up.

Treat yourself, but make it frugal

So, what could this groundswell of doom do to consumer spending? Well, it seems that are a number of brands are already preparing for a consumer mindset that at once wants to treat oneself, and yet is simultaneously a little worried about doing so. Yes, the unique pressures of this unprecedented moment in history seem to have birthed a new category of product; mid-level luxury, or put simply, quality products that allow you to indulge, just not too much.

In the past couple of weeks there’s been the soft emergence of a response from brand owners to a climate of limited finances, but a simultaneous desire, nay need, for fun. And of course, one of the first out of the gate hails from that bastion of affordable treats, Marks & Spencer (M&S). Last week it launched its new Distilled Spirits range, aimed at making quality drinking at home, more affordable.

Quality in the home

With ten products in the range, from whisky, rum, vodka, tequila, and brandy, it’s a comprehensive starter kit for at-home mixology; a trend that a number of drinks companies from Diageo to Bacardi are flagging as a key driver of current sales.

According to Jenny Rea, lead product developer for spirits at M&S: “We know many of our customers discovered their inner mixologist over the past two years while bars and pubs were closed. Our new Distilled range is all about helping them to find the best versions of their favourite spirits at a great price, so they can continue to enjoy the classics while also experimenting with new cocktail creations.”

Described as high quality – the gins are triple-distilled, the vodka’s five-times distilled, the Scotch aged for eight years, and the brandy for five – free from anything artificial, and packaged in British-made glass, the whole range is priced at a reasonable £18 for a 700ml bottle. It’s the quality and breadth of product at-home mixologists are demanding, just without the price tag.

Release your inner mixologist

Meanwhile, Intercontinental Brands has launched Apollo Passion Fruit Liqueur. The main driver behind the launch – or at the very least, the marketing surrounding it – pitches it again as aimed squarely at home drinking on a budget. Intended for making a passion fruit martini (or porn star martini to the rest of us), it eschews the need for buying multiple, perishable products.

Speaking about the launch, Clare Gibson, marketing director at Intercontinental Brands, said: “We hope Apollo can rival the market and provide a more affordable option that appeals to both the on-trade and consumers looking to shake-up passion fruit martinis at home.”

Where now?

What is becoming clear is that brands are expecting – and gearing up for – increased at home drinking as consumers adjust their behaviour amid rising prices and smaller social spends, making bar-made cocktails a rare(r) treat.

So, if this is the start of something, where is the trend likely to go next? Any brands looking to enter this emerging tier need to be aware of a few things. From our position as a creative drinks design agency we know that when it comes to at-home entertaining, or even an at home bar collection, appearances matter. With bottles likely to be kept out for display, having a bottle collection that is not only decorative but looks credible when it comes to quality, is vital. In these pre-recessionary times, people may be tightening their belts, but they certainly don’t want to look like they are.

Many are shopping with their eyes as well as their wallets. The best looking bottles therefore, will win out. Many consumers invested in creating home bars during the lockdown. Diageo’s opening of The Bar, a barware and spirits emporium for at-home drinks making, right beside its Great Marlborough Street offices in central London, is proof in the belief that they will continue to do so, seeking out good-looking tools and glassware. Good looking bottles therefore, are key.  

Credibility is key

And alongside accrued knowledge and growing connoisseurship acquired during cocktail-making sessions, many more consumers have ‘upped their game’ when it comes to selecting their drinks. Quite aside from fancy pack design, when it comes to the liquid itself, consumers now know more than ever before about what’s good, and what’s not.

Mid-level luxury products therefore are going to need to look credible as well as containing a quality liquid, to earn a place at the home bar. Borrowing current packaging cues from the latest iteration of the fading craft movement – from minimalism, to embossed bottles, vaguely heraldic seals that speak to an unknown history, and clean, bold labelling, and places of origin championed upfront – M&S is making a shrewd play with its somewhat classic packaging design. In short, it doesn’t look like a compromise. Instead, it looks dependable.

And that will be key. Will premium and super premium brands launch more affordable options? It’s likely that some may, though expect new brand names, and a pack design that keeps things in the family, without watering down the parent brand. A clear distinction of why something is worth the higher price point is crucial to recruiting consumers that will, once cost pressures lift, climb the brand ladder.

Future consumers

However, most of these affordable options are likely to come from retailers themselves, keen to keep consumers coming through the doors be they physical or digital, by offering them options to trade down to.

Will luxury still boom? Undoubtedly so. You know what they say about recessions…. the rich do in fact tend to get richer. And for everyone else, investing in something special – even beyond what people normally would spend –  to mark key occasions will become a key point of celebrations in an age otherwise dominated by restraint.

However, it’s worth keeping in mind who this new tier of ‘you’re nearly there’ treats are aimed at. The cash-strapped consumer of today, driven back to home entertaining by rising costs – and already possessing not only an interest in quality drinks, but a desire to learn more about mixology and how best to consume them – won’t be cash-strapped forever. By providing new options to a growing consumer set who want in on luxury, but just can’t quite afford it yet, some brands may just make a shrewd play for the future, bringing these consumers with them and continuing to educate them, until they can.

Interested in finding out more about what this might mean for you and your business?

Please contact us at hello@thecabinetagency.com or 0207 101 3939