It’s safe to say that commentary on the cream liqueurs sector has felt like a broken record in recent years. The same narrative has been regurgitated by brands – that high-calorie liqueurs aren’t in favour with younger consumers seeking healthier alternatives.
The other challenge facing the category has been the lack of drinking occasions, remaining synonymous with winter and after-dinner serves, however there’s now a need for premiumisation as well as dairy-free alternatives, which are giving brands a new focus as opportunities continue to open up.
For context, the cream liqueurs sector is totally dominated by Diageo’s Baileys. The Irish cream liqueur sold 8.8 million 9-litre cases in 2021 according to Drinks International’s The Millionaires’ Club – a 23% increase on the previous year. This is largely due to the ongoing success of cream liqueurs in the on-trade, which followed the rise of at-home consumption patterns created by the Covid-19 pandemic.
But, as with other categories with a single dictator-like rule, such as Irish whiskey’s Jameson or Campari, a rise in premium alternatives is starting to evolve the sector.
Coole Swan, a premium Irish cream liqueur founded in 2007, is a prominent figure in the wave of new brands.
“Changing lifestyles and attitudes around quality experiences and balance are driving premiumisation among the next generation of consumers,” says Mary Sadlier, chief executive of Coole Swan. “They are trading up when they decide to socialise. Premium and above brands are set to experience further growth on the back of these trends.”
According to Sadlier, IWSR data shows that in the four years to the end of 2020, premium and above cream liqueurs (£22/$25-plus) have been growing much faster than the rest of the category in Europe and the US. She says this trend is set to continue, with premium-and-above spirits forecast to increase global volume market share to 13% (from 9%) by 2024. However, in order to maintain this momentum, pricing needs to be addressed. Sadlier adds: “Where the category is most visible (off-trade) it is dominated by branded price promotions and supermarket own labels. There is a need for premiumisation within the category to take the pressure off margins. Perhaps due to margin pressure the category has lost sight of the importance of the taste profile.”
Currently Baileys retails at around £10-13 for 1 litre in major UK supermarkets and is regularly on offer, making it difficult for other premium brands to compete. In comparison, Coole Swan demands around twice the price point of Baileys and with this higher price tier, Sadlier believes consumers will take the sector more seriously.
Vegan-friendly
While Baileys holds a vast market share, the brand has also been progressive for the category. One of its big releases in recent years was Baileys Almande – a vegan alternative made from almonds which has opened up the cream liqueur sector to a wider audience of consumers.
Similarly, in Finland Kyrö launched a lactose-free cream liqueur made using its own rye whisky. The distillery is currently number 29 in Drinks International’s Most Admired Whiskies and co-founder Miika Lipiäinen believes the lactose-free element is key to the product’s success going forward.
