In general, the luxury goods market has managed to ride out the global financial crisis in good shape.  However, with the continuing financial growth of the countries to the east of the globe the shift in the location of the sales of these goods has undergone a remarkable change.  Asia, The Far East, India, Russia and Latin America are proving to be the strongest emerging markets.

When we talk about ‘luxury goods’ in the terms of spirits, what exactly does this mean?  And, more importantly, what do the brand owners themselves take it to mean?

Luxury in Asia

Andrew Fell – Commercial Director of Diageo’s luxury brand section, Reserve – says that “Luxury spirits are about authenticity, craftsmanship and provenance.  They surpass others in their category in terms of experience, quality and taste,” a view widely held by others in the industry.

In the case of luxury spirits such as cognac and whisky, if a certain blend becomes rare, the value rises.  In the main, consumers not only want to own the rarer blends, but they also want to be the ones who taste it as well.  Therefore this contributes to the scarcity, and the more the remaining bottles cost to purchase.  It’s a case of when it’s gone – it’s gone!

There is also a big difference in the type of luxury spirits.  At present, the darker spirits such as cognac and whisky command much higher prices than white spirits such as vodka.  However, these white spirits have seen an increasing growth over the past months and are steadily growing in popularity within the Asian market.  This has sparked much speculation over the possibility of these white spirits catching up, or even overtaking, darker spirits in their popularity, although this is hotly disputed by certain key figures within the industry.

Jenny Gardner – Head of Brand Development at Vanquish Wine – is one who disagrees.  She says the “the very nature of whisky and cognac suggests that white spirits will not overtake dark.  A white spirit is traditionally younger than a brown spirit, even if it has been aged and filtered and the brown spirit has had caramel added.  The rule usually applies; the rarest of whiskies and cognac are old and therefore will always be highest up the status tree.”

Then there is the question of packaging.  There is no doubt that the liquid itself is an important part, but the bottle and packaging also play a vital role in the marketing of luxury spirits.  This poses a dilemma for the manufacturers – should they go for the eye catching, outstanding packaging?  Or should they concentrate on subtle and understated, so communicating that it is the drink itself which is the luxury item?

Again, this is dependent on location, as in the West, outwardly showy packaging is considered in bad taste, whereas in the countries of the emerging markets the cultures allow, and even expect, outwardly ostentatious shows of wealth.

But one thing is for sure.  That those who are in the market for luxury spirits and goods, are sure to soon have more choice than ever on what to spend their money on.


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East versus West in the Luxury Goods Market

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Jacki has been with Cognac Expert from virtually the beginning. She's the senior editor of the blog, and has spent much of her life living in rural France. Today she's based back in the UK, where she splits her working life between writing for Cognac Expert and working as a Paramedic at a large regional hospital.

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