Traditional spirits producers have long been under pressure in many European markets, including Spain, as they see their markets eroded by international brands. Many are family owned and are suffering partially because they sit in the difficult after-dinner occasion.
Spanish producer Zamora was one of these. Rather than accept its fate, the Cartagena-based company embarked on a successful strategy to modernise and internationalise its portfolio, led by its flagship Licor 43 brand.
2018 was a record year in terms of turnover, driven primarily by Licor 43 liqueur and Ramón Bilbao wine
2018 was a record one in terms of turnover for Zamora, which reached €196m ($216m), a 16% rise over 2017. That positive momentum has been maintained in 2019 and turnover is expected to be about €215m ($237m).
Licor 43 (+10%) and Ramón Bilbao (+12.3%) accounted for the greatest element of overall sales, although all the company’s brands grew both in terms of turnover and sales volume. Mar de Frades (+8.5%) also rose strongly. Spirits overall accounted for 58% of that total turnover in 2018.
Zamora has gradually reduced its reliance upon the domestic market. International sales as a proportion of overall sales have been rising steadily, accounting for 43.5% in 2018, with Germany, the Netherlands and Mexico being some of the main markets in which the company operates. This compares with 33.5% five years earlier. The company expects international sales will account for 50% of sales by 2022. Zamora now has a presence in more than 80 countries, with 12 facilities spread across Spain, Italy and the Dominican Republic.
A growth strategy focused on investment in France and Mexico
To reach that 50% goal, Zamora is investing in key international markets. This year, as part of this expansion strategy, it opened a new commercial office in Mexico and created a new company in France. “France and Mexico are two markets where our brands have good penetration, where we see a potential for significant growth and where we believe we should invest,” says CEO Emilio Restoy, who confirms that each country will enjoy different business models.
In the case of France, after the acquisition of local distributor SIP Drinks, Zamora will rely on regional distributors to distribute its brands across the market, while its commercial and marketing strategy will be run out of its office in Bordeaux. It will also continue to work with local distributors in Mexico, while sales throughout North and Central America (except the US) will be managed from its Mexico City office.
The consumption of Licor 43 in Mexico has multiplied eight-fold in recent years to about 150,000 cases. Licor 43 is “on fire” in Mexico, according to Zamora’s International Managing Director, Thomas Clamens. He explains that the company is succeeding there through the promotion of the Carajillo 43 cocktail, which combines the strength and bitterness of espresso coffee with the spicy sweetness of Licor 43. It is also using the Carajillo 43 cocktail as a vehicle to build the brand in the US southwest, where there is a large Mexican population.
Product Innovation fuels growth and re-engages the consumer
In Spain, the company is looking to reignite the brand by promoting Licor 43 with ginger. Clamens says: “We are winning in some regions and losing in those more traditional regions where they used to drink it [Licor 43] in the morning with coffee, the original carajillo. The challenge is to re-engage that traditional consumer. It is a long journey and we are committed to investing behind the brand. Luckily, the sweet liqueur category is growing in Spain.”
Zamora is also looking to revive the carajillo occasion in Spain through the introduction of Licor 43 Barista, a fusion of Licor 43 Original coffee from the Canary Islands. “Spain is an older mature market, so we need to bring innovation to the table,” explains Clamens. “We are bringing some ritual through Licor 43 and ginger in a big balloon glass and now we are going to try the carajillo, the Mexican way, in Spain. Licor 43 Barista will help there. We’re going to build on the connection with coffee.”
To further cement the brand’s vision as the liqueur of choice in coffee cocktails globally, Zamora runs the World Coffee in Good Spirits Championships, where teams of baristas and bartenders fight it out to create the best coffee-based cocktail.
Premium rum will be the category to watch
Zamora also has an extensive agency portfolio in Spain, where it handles Matusalem rum, José Cuervo tequila and Bushmills Irish whiskey, among others. Rum was the hot category in Spain before gin took hold. Clamens believes that it could regain the initiative. “If I had to bet on what’s next, I would bet on premium rum,” he says. “Diplomático, Don Papa and Plantation are currently driving the category. With Matusalem, we took the decision to focus on the premium end of the market, on 10, 15 and 23yo variants and special wood finishes. We think that is the way the market is going to go. Premium innovation is going to drive the modern rebirth or rum.”
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