When it comes to spirits, there have been many trends in history. While we can say that there is currently a trend pointing at the revival of the fruit-based spirits, there are also many challenges preventing them from getting the true place they deserve on the world markets.
What is a fruit-based spirit?
For the sake of clarity and proper understanding it is appropriate to state already at the very beginning of this article that it does not only concern fruit-based spirits excluding the grape-based ones, but we also consider grape to be a fruit and generalize the term fruit-based spirit as one including grape as a base material. Let us start with a direct, maybe slightly provocative question. What comes to your mind when you hear the following words “eau de vie”, grappa, “brandy”, “fruit brandy”, “cognac”, “armagnac”, “calvados”, “Pisco”, “Edelbrand”, “rakia”, “rakija”, “tsipuro”, “rachiu”, “rachie”, “palinka”, “raki”, “tuică”, “slivovitz”, etc as well as the many variations they have in local alphabets, spellings and languages and dialects. At the end of the day all these words stand for a product, which is a spirit based on fruits (either grape or other kinds of fruits).
The customers and their decision making process when buying a spirit
Now let’s imagine for a second that you are a regular customer standing in front of a shelf and trying to decide whether to buy that product or not. Well, especially if you are a tourist, not coming from the local area where the product was produced, your decision will most likely be based on pure guessing. It is actually very likely that you will not be able to properly read and pronounce those words, not even to mention knowing what they mean. In case you are an European, who is somehow more familiar with spirits, then you will most likely know if not most then some of the words mentioned, but find it very difficult to tell what exactly even the difference between Cognac and Armagnac is, except probably the fact that both are grape-bases spirits coming from a geographically protected indication. If you are an Eastern European you will probably roughly know what rakia is, but not what its variations are and if you could find any logic between the different spellings. In case you are an industry professional, you would be expected to know what the words mean and what stands behind them. Even in that case though, I would highly doubt that industry professionals from outside of Europe would be fully aware of the legal regulations, what exactly they should expect based on the exact product category name, and its variations used on the label. I assume that even an industry professional from either South America, North America or Asia may be at least slightly confused and not know what exactly the difference between for instance fruit brandy, brandy, rakia and tsipouro is supposed to be.
Why do fruit-based spirits fail to be successful on the market
Keeping the above mentioned in mind, we gradually get into the topic of why fruit-based spirits have not been able to make a successful market performance and the challenges the industry faces. When a consumer reads Whisk(e)y, they know what basically they can expect in the bottle regardless whether it is from Scotland, Ireland, the USA, Canada or Japan. Of course there are differences between them but the basis has been clearly communicated to the consumer over time through legislation, marketing, etc. The same holds truth for gin, rum, vodka, casaca, tequila, recently even baijiu and so on. When the consumer sees the bottle, they know what to expect. Maybe their understanding is not fully correct, but they have some trust in the product built into their mind. When it comes to fruit brandies, it is exactly the opposite case – even if the consumers know what is supposed to be in the bottle, due to poor legal framework and in many cases zero enforcement of that framework by the authorities, the consumers have no trust in what they may find in the bottle. It will take a lot of collective effort, by producers, governments and organizations to build a proper legal base across so many countries and manage to communicate the message to the global markets.
The producers of fruit-based spirits and their responsibility for the change
Getting deeper into the topic, before we even start talking about a successful market performance we should concentrate on the product itself. In the case of the fruit-based spirits, I have the feeling that the issue with the product is rather associated with the mentality of the producers and their understanding of what a successful product should be. So when we talk about changing the product, we should actually talk about changing the mentality (understanding about the product) of the producer. The producers should get to a proper conclusion of what a successful on the market high value product should be. Most people would call that product development, but for me it is not about product development. Instead, it is really about the change in the producers’ understanding about what a high quality world class fruit-based spirit is. After many years of working with fruit-based spirits, cooperating closely with producers and visiting fairs like ProWein, based on my impression I have the feeling that most of the producers understand a high quality fruit spirit as being:
- A clean spirit with high aroma intensity, where taste, body and aftertaste are secondary issues
- Pretty much only the base material, understood as for instance the basic aroma of apricot, quince, apple, etc is emphasized in the aroma, but there is a total lack of complexity
- The character (touch) of the product (spirit) itself is considered not to be so important
The very high importance of complexity and character for fruit-based spirits
Well, that in my opinion is by far not what a world class top product should be. I know that I will disappoint a lot of people, but let us take examples from the competition. Just think of what a top Scotch or what a top rum should be. Would anybody whatsoever expect from them to have a single aroma dominating totally in it or is it more about the complexity? Is it about a balance between aroma taste and aftertaste as well as between the various kinds of aromas and tastes or is it about simplicity? In other words, would you expect to have a balanced drink with a lot of character in your glass or would you just expect a boring spirit that has only strongly dominating aroma of, let’s say apricot or plum or quince. At the end of the day, it is all about the complexity and character that the consumer will find in the glass. If the complexity and character are there, then you have a top product, which you may expect to be sold at a high price. Otherwise, it is just yet another spirit to be sold in the supermarket.
There are of course some very good examples on the market, but the fact of the matter is that the vast majority of the fruit-based spirits simply lack complexity and balance and as a result of that they lack character. There are many measures that the producers may take in order to improve their products.
The diligence and the precision in the production process of fruit-based spirits as well as the use and the development of proper methodology
It is all about the effort spent in research and development as well as the precision in the production of the spirit. Those are things like better temperature control and timing of the fermentation, better selection of the exact shape of the pot still to be used, more precise cuts, better control of the maturation process (kind of wood, size of the barrels, temperature, abv of the spirit in the barrel, etc), more precise blending, etc.
Further challanges for fruit-based spirits success on the market
In addition to the above mentioned major challenges there are also a few other issues which are of no lesser importance. I would separate them in 2 groups:
Circumstantial challanges
- Small markets – considered from a global perspective, most of the fruit brandy producers are located in small countries. As a result they have small local markets. In other words, if they want to achieve meaningful volumes of sales, they have to export, which especially in Europe is not so easy and is related to high administrative efforts and costs. Even if the producer’s local market is for instance France or Germany, from a global perspective it is not a huge market. Imagine what it is like for rakia (local fruit brandy on the Balkans) producers from countries like Bulgaria, Serbia, Macedonia, Bosnia and Herzegovina, who produce excellent products, but find it very difficult to sell them.
- Difficult in some cases nearly impossible exports – selling excise duty subject goods across borders is as a matter of fact very difficult. Even within a single customs area like the EU, exporting is quite complicated and very costly. That said, the producers operating from small local markets have a huge comparative disadvantage.
- No personalities (popular individuals) supporting fruit brandies – nowadays a lot of spirits brands have brand ambassadors and/or popular celebrities advertising them. When it comes to fruit brandies and especially the ones produced in developing countries, this not yet the case. The link between the fruit brandies’ production and the rest of the real economy seems to be somehow missing.
- Wrong or no understanding of the proper way fruit brandies should be consumed. The fruit brandy producers seem to be fully focused on production only. In order to be successful, they should also bring their message across. They should be involved in explaining to the customers how their products should be consumed best. That will at the same time help the producers understand the customers and improve their products in the future. This close distance to the customers seems to be somehow missing. It would be very helpful for the consumers to know how a certain product should be consumed properly. That will help improve their experience consuming the particular product and also make a very good first impression. It is of utmost importance to know if a certain spirit should be consumed as an aperitif, digestif or with a certain kind of food alongside.
Business related challanges
- Lack of capital/difficult and expensive financing – many of the producers of high quality fruit brandies are in relative terms small companies and are not part of any large group or holding. They do not have so much capital and consequently it is difficult for them to fight the large marketing budgets of the big players on the market. That in turn makes it difficult for them to list products on menus in restaurants and bars and limits their sales potential.
- No clear strategy (no clear business model) – many of those small producers have no clear business strategy. The only thing they know, and it is hopefully the case, is that they have the resources and knowledge and consequently are able to produce a good according to them spirit. That is by far though not enough for a market success. There are many business decisions that need to be taken in order for a product to be successful on the market. Those are for instance which partners (distributors, exporters, etc) to work with, how to present the product (vision), how to build their brand, what is their target group and so on. It is also very difficult to manage quantities for production, sales and maturation. It is all a very complicated business process, which is very often associated with external financing.
- No support from the big players in the industry, because the latter do not see the potential and/or cannot understand the business while the producers do not know how to work successfully with them.
- No transfer of knowledge – there is in my opinion too little contact between the various producers of fruit brandies, especially if those are located in different countries. There are various reasons for that with costs, language barriers, pride and so on being among the main ones. If the producers get to know each other better and start transferring knowledge between each other that will certainly result in a lot of improvement of the product and better knowledge of how to approach the market. The exchange of best practices is essential for the future.
- Variations in quality and style – it is unfortunately still the case that there are producers with reasonable variations in the style of the end product produced in terms of batches, barrels and so on. In order for the consumer to understand the product those differences need to either be brought to a minimum or the reason for them needs to be clearly communicated to the consumers. Quality variations between the batches are sometimes also an issue.
Fruit-based spirits are the future and their success is guaranteed by appling the proper practices
Having said all the above, I am deeply convinced that fruit spirits are the future, but there is still a long way to go before they are widely available on the global markets and the consumers are able to find and enjoy the good examples. When it comes to the consumers, the natural demand for this kind of spirits is already here. We, as human beings are naturally inclined to consume fruit and admire the magical aroma and taste of the various fruits available on our beautiful planet. It is now the other stakeholders along the chain’s turn to do their job in the successful market realization of the products.
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