Maria Yost is making margaritas. If everything works out, women could be sipping them at book club get-togethers 18 months from now.
Surrounded by test tubes and liquor bottles at Beam Inc.'s lab in Clermont, the research scientist is working on a prototype flavor for the Skinnygirl brand of alcoholic beverages aimed at calorie-conscious women.
"Right now I've found a flavor I like — this one happens to be a citrus product — and I'm dosing at different levels," Yost said while holding a pipette over 10 test tubes filled with a basic margarita solution. "I'm trying to get some sweetness to come through and some tartness to come through."
She also needs to keep the drink to less than 100 calories for a 4-ounce serving, the guidelines for a Skinnygirl margarita.
"Some of them are going to be terrible," she said with a shrug.
It's painstaking but important work at Beam, the nation's No. 2 spirits company based on volume. The maker of Jim Beam, Sauza tequila and Pinnacle vodka has promised 25 percent of sales will come from new products like the one Yost is working on. It's an ambitious goal but key to maintaining investor confidence in the new stand-alone company.
Once a conglomerate known as Fortune Brands, Beam, based in Deerfield, Ill., spun off its home and security business in October 2011 to focus on spirits, which as a category is growing faster than wine and taking share from beer.
In the 16 months since the split, Beam has acquired Pinnacle vodka and Cooley Distillery, an Irish whiskey company. It's also ginned up advertising by 11 percent, to $399 million during 2012, including a 20 percent increase during the holiday-heavy fourth quarter.
At the same time, it's expanding existing brands like Skinnygirl, once a low-calorie bottled margarita, to flavored vodkas, wine and other drinks such as sangria or white cranberry cosmopolitan.
Still, with 2012 sales of $2.5 billion, Beam is dwarfed by industry-leading Diageo, the London-based maker of Smirnoff, Tanqueray, Captain Morgan and Johnnie Walker and its $14.4 billion in sales.
Ken Perkins, an analyst with Morningstar, said the more recent flavor experimentation with bourbon and tequila is bolstering consumption among drinkers and bringing new consumers into the category. Flavored spirits accounted for 46 percent of the industry's volume growth in 2012, according to the Distilled Spirits Council of the United States.
"I think their innovation strategy is right on," Perkins said. "They know they need to do it to be successful."
Beam CEO Matt Shattock told investors last month they should expect to see continued sales growth in brands like Jim Beam as the brand adds flavors.
"We've talked before about the fact that we brought, for example, more females into the bourbon category," he said. In vodka, he said, "flavor is driving all of the growth." Beam is hopping on the flavored-vodka bandwagon with the newly acquired Pinnacle vodka brand.
The challenge, he said, "is to continue to be on the front end of those trends, to bring interesting, relevant and, frankly, very good-tasting products to consumers."
Julian Cohen, vice president of global insights and innovation at Beam, said the company evaluated a variety of factors to start the product development process, drawing on food and fashion trends as well consumer lifestyle research.
A big part of Beam's growth trajectory can be pegged to the increasing importance of the female consumer.
After decades of catering to men, spirits manufacturers are homing in on women. Experts point to TV shows such as Sex and the City and Mad Men for making liquor consumption more permissible, and a plethora of flavors with making them more palatable.
"Sophisticated women didn't want to be seen standing at a bar holding a bottle of light beer," said Frank Coleman, spokesman for the Distilled Spirits Council of the United States. He added that women might have been offended by mainstream beer advertising.
"It was at least a partial reaction to the denigrating marketing by beer companies," he said, referring to what he called "frat-boy-in-a-hot-tub" ads that also featured scantily clad women.
Flavored liquor, once confined to vodka, can now be found with bourbon, tequila and other spirits.
"Flavors have been the biggest story of the last couple of years" and served to "revitalize the category," said Euromonitor analyst Jared Koerten.
Vodka accounts for one-third of U.S. liquor consumption, but bourbon makers like Beam see an opportunity with female consumers and flavors to grow bourbon's 11 percent overall share.
Historically, Beam counted on women for 30 percent of its bourbon consumption. But flavored products like Jim Beam Red Stag, a black-cherry-flavored bourbon, lifted female consumption of that product to 45 percent, the company said.
"It's hard to like a single-malt Scotch if you don't drink spirits regularly," Koerten said. "Some of these sweeter flavors make it a little easier to introduce yourself to spirits."
Emily Bryson York