The Spirit(s) of Premiumization
The term “Premium” is comprised of four attributes within the BAV survey – Best Brand, High Performance, High Quality, and Worth More. When spirits are considered premium, consumers are willing to pay moreor the experience. We compared the top 10 premium brands within the U.S. and U.K. to the Brand Finance league tables, and unsurprisingly, found the list to be synonymous.
The image below shows the top premium spirit brands to American drinkers in 2014. Compared to other alcohol labels, these brands are consistently seen as unique and trustworthy. Additionally, American drinkers consider these brands similar to other high quality brands such as Bergdorf Goodman and Starbucks.
A similar story emerges for U.K. premium alcohol brands. British drinkers recognized these brands for being trustworthy, distinctive, and original – similar to reliable household names such as Coca-Cola and Starbucks.
While Grey Goose is the most premium brand among American spirit drinkers, Bailey’s is recognized as the most premium brand in the U.K. Sentiments regarding the topmost brands differ drastically across the pond: while Americans think of Grey Goose as a fun and sensuous leader in the space, British think of it more as a traditional brand.
For Bailey’s, American drinkers think of it as a socially responsible brand that cares for its customers, whereas British drinkers feel that it is high quality, social and trendy.
Lastly and most importantly, premium-ness is a strategy that can be employed by a brand to bolster sales and consumer engagement. Among all the spirit labels, premium alcohols tend to be highly correlated to overall brand equity, which ultimately translates to higher preference for each brand. As seen below, the top 10 premium brands command substantially more preference than other alcohol brands in both countries. In fact, the U.K. values premium brands even more than the U.S. as the gap between premium and non-premium brands is wider.
Bottom line, one of the ways brands can increase their value, both intangible and tangible, is to create an aura that they are premium brands. However, since many of these spirit labels are global, they will need to learn how to curate premium-ness across countries, especially in countries that differ more greatly in their values and in emerging countries that are awash in new wealth.