Trading up

They only account for a fraction of overall sales, but super-premium brands generate the greatest publicity, not to mention cult status. In fact, as the spirits industry continues to specialise, applying a more creative approach to every stage of the production process, a growing group of these brands is raising the cachet of spirits in general. And, as consumers become more knowledgeable, the new product development departments ensure there is always more for them to learn.

Extending a brand name by creating more illustrious versions enables consumers to switch from standard to super-premium levels with all the reassurance that a familiar brand provides. Meanwhile, the super-premium style has a "halo effect" on the entire range, upgrading consumer perception of the standard and intermediary styles.

But this one-step-at-a-time process of trading up from standard to premium then super-premium is far too pedestrian a route for the growing brigade of sophisticated consumers perched on a stylish bar-stool near you now. They prefer to cruise the super-premium highway, which means going straight in at the top, experimenting with unfamiliar brands and spirits categories. It's all about instant gratification, and this has created a whole new dynamic: super-premium brands can also be an entry level.

As spirits benefit from the current vogue for cocktails, consumers are naturally more experimental, and are willing to try spirits within a cocktail that they wouldn't drink neat. The typical answer to "would you like a glass of kummel ?" would be "no thanks", but offering a Silver Bullet (vodka and kummel) is far more likely to get a positive response.

And we're not simply in the midst of a cocktail revival - new trends have also emerged, such as the "premium-branded" cocktail. Traditionally, standard brands were the only contenders for mixing, though offering older and more rarified styles is an effective way of adding value to a cocktail, using the brand name as a selling point.

Bourbon is a classic example of a spirit benefiting from mixability (classics such as the Manhattan and Mint Julep are among its repertoire), but at the same time elite Bourbons are also increasingly sipped and savoured. Super-premium Bourbons now account for around 10-15% of the Bourbon category, up by 5% compared with five years ago, and all set for a higher share with an annual growth rate of around 15-20%.

Small-batch Bourbons (blended from a batch of around 20 barrels or less, compared with a standard brand blended from around 200 barrels) is obviously a step up in the hierarchy, with single-barrel Bourbon (as the name suggests, the contents of a single barrel) an elite category originally pioneered by Blanton's in 1984. The appeal of a single barrel to connoisseurs is of course that no two barrels, even neighbours in the same warehouse filled with the same spirit, are ever identical on maturity.

Single barrel styles in many different spirits reached an apotheosis during the millennium. Many Tequila brands were among the contenders, even though consumers remained unsure about the difference between standard and 100% agave Tequila (which is that it is produced either from a minimum of 51% agave, supplemented by sugar, or entirely from agave).

What consumers do know is that Tequila means fun, flamboyance, often excess. But the quality message is also getting through, with super-premium Tequilas increasingly sipped and savoured.

Distilling agave cultivated in a single field is behind José Cuervo's 1800 Coleccion, launched in 1997. Only two barrels (French oak) are released annually, with plenty of palates eager to try it. Cult London bar Che sold seven bottles in 1999, at £100 for a 50ml shot.

Greater experimentation in the Tequila industry has seen extended aging and maturation techniques, beyond the standard choice of Bourbon barrels. El Tesoro de Don Felipe Paradiso, for example, is aged for two years in Cognac casks and then two years in Bourbon barrels before another year's refinement in oak vats.

Cognac has always been dynamic in the super-premium sector, adding ever more value to its inherent prestige. At the same time, more than 90% of UK sales are actually accounted for by the entry-level grade, Three Star (also known as VS).

Most consumers are baffled by Cognac terminology, unaware that Napoléon, XO and Hors d'Age all mean the same thing - that is, a blend containing eaux-de-vie at least six-and-a-half years old. Concepts such as a single-château style (Bisquit's Château de Lignières in the Fins Bois appellation, for example), or Hennessy's range of single distillery Cognacs (including Izambard, Le Peu and Camp Romain), are far easier to understand.

Nevertheless, price is usually the clearest consumer indication, with top-of-the-range Richard Hennessy around £1,000 for 70cl, and Louis XIII de Rémy Martin at about £2,000 for a magnum (150cl).

Sales of single-barrel and vintage malt whisky have been accelerating since the mid-1990s. Although the choice of barrels and ageing conditions essentially account for annual differentials, another factor that can influence the spirit is the switching of barley varieties. Needless to say, being limited editions, rarity makes them all the more desirable, with the Balvenie 1967, for instance, limited to 700 bottles released worldwide.

While aged spirits offer more super-premium potential than unaged, various vodka brands have transcended the category's traditional "commodity" status.

Consumers are also beginning to appreciate differences between vodkas based on the grain used (rye in Poland, wheat in Sweden and Russia, barley in Finland, and corn in the USA). Grey Goose is a super-premium innovation, being a "multi-grain" vodka distilled from corn, barley, wheat and rye (a kind of "vodka's greatest hits"). Meanwhile, Krolewska, Chopin and Belvedere are among the growing range of Pole-stars, with Finlandia 21 (available in international duty free shops) distilled using barley from a single field in the Ostrobothnia region of north-western Finland.

Organic status is of course perfect for such an innovative industry, with a growing range including organic Cognac, malt whisky, eaux-de-vie, Calvados, grappa, vodka and gin (now we have organic tonic water we can mix an OG&T).

Believing in organic grain's ability to offer superior flavour, and therefore a superior result, is a tempting concept. However, the flavour benefits derived from organic ingredients are difficult to isolate, as so many other factors are involved, particularly among aged spirits. Not least is the distiller's own skill, while a spirit at 40% abv obviously means that it contains 60% water.

Some distillers say there is no difference in the way organic ingredients behave during production. Others say organic grain ripens more slowly, offering higher starch levels, and so a higher alcohol yield per tonne of grain. Whatever the technicalities, its clear that organic status is a powerful marketing concept, promising consumers an ultimate sense of added value.