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When Stupidity Overtakes Creativity

February 22nd, 2012 No comments

Wódka vodka, the inexpensive import trying to become the next Svedka, stepped on it’s you-know-what again with an outdoor message it obviously (but mistakenly) thought was cute and clever.

Back in December they ran a billboard in New York City with this sophomoric content – “Christmas Quality, Chanukah Pricing.” That ran into a firestorm of criticism and they had to literally pull the ads down.

You’d think they would have learned and moved forward in a number of new ways to get their message across. Get a new creative team, hire a new agency, and/or get internal marketing and advertising folks who know what they are doing. There are dozens of ways to get the quality-low price message across in a fun, even shocking way without being offensive.

Listen Wódka, you may think that putting a lampshade on your head is funny but trust me, after the 5th grade it loses some of its appeal.

This time they have run a billboard with “Escort Quality, Hooker Pricing.” The best I can say for it is that it’s lame. But to compound matters they chose to run the ad on the Bruckner Expressway (trying to reach Westchester commuters) in the Hunts Point section of the Bronx. According to the Daily News, “When I saw it I almost fell out of my seat, said Rafael Salamanca Jr., district manager for CB 2 (local Community Board). That’s an inappropriate billboard given what the Hunts Point community has gone through in the past.”

Some advice for the managing partner for Wódka’s marketing company, MMG. Outdoor advertising and alcohol have always been on tenuous grounds and this is not a good thing for your brand or for the industry. The childishness of the ad is not worth the effort.

The genius who loves this campaign is probably saying something about how even negative publicity is good publicity. Well, that’s not always the case. Especially when there are competitive brands with more positive messages than buy me I’m cheap.

So far as the outdoor company is concerned – shame on you for allowing this to go up. That company used to have high standards and community sensitivity. I guess an ad about hookers fits their current business practices.

Management Consulting Firms

January 30th, 2012 3 comments

I have chatted with a number of people lately, both in and out of the alcohol industry, about the continued widespread use of the so-called experts who come in at eight figure fees to “advise” corporations on how to improve business performance.

I’ve had more than my share of exposure to these firms over the years and one of the reasons I enjoy the non-corporate life is not having to deal with consultants who ask for your watch so they can tell you what time it is.

My first experience while at Seagram was with a “household name” company that received tens of millions to suggest a straightforward and logical reorganization. I couldn’t help but feel that those who brought these folks in were either 1) not smart enough to figure it out for themselves or 2) needed the air cover of outside consultants, as in whom to blame to counter complaints or in the case of failure.

On another occasion, I recall the retention of a buzz-name consulting firm hired to help figure out what to do about the tequila category. They basically regurgitated strategic and other documents that the internal team had prepared. What, you don’t accept the opinions of your own people but feel comfortable taking the same advise from outsiders because you spent millions on it?

I understand the role and use of consultants for staff augmentation, discovering and applying best practice, even increased analytic capabilities. But I don’t get the use based on “external change force for political cover” or “fresh perspective.” If your own people can’t do this then get new people.

There are a few deep dark secrets of these consulting firms that should be spotlighted. The first is that the tens of millions dollar fee and resulting recommendations are often generated by straight-from-business-school neophytes with limited to no real world experience.

Second, the single most important goal of a consultant is to get the next project.

 

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What do BlackBerrys and Booze Have in Common?

January 19th, 2012 No comments

Too many choices.

Research in Motion (RIM), the makers of BlackBerrys, is having some problems. Their stock is down, the new line of products has been delayed for a year and there are rumors of corporate sharks looking to take a bite out of them.

In the view of most observers, the problem stems from too many choices. Since 2007, they have introduced 37 models including BlackBerrys that flip, slide, with touch screens, touch screens and keyboards, high and low end products. The product line is too complicated. In a recent NY Times article, a market research firm estimated that their market share slipped from almost half in 2009 to roughly 10 percent in the US.

Compare that to Apple’s iPhone. There have only been four since 2008 and all were the same but differed only in storage or capabilities from earlier models. Apple made it simple and less is more.

A marketing professor at the London Business School was quoted in the Times article as saying, “Too many options can be frightening and overwhelming.” In fact, other studies on the subject have indicated that, while people claim to like abundant choices,  too many leads to confusion, increased concern about risk (making the wrong choice) and ultimately dissatisfaction.

Let’s turn to the alcohol industry.

Budweiser has lost the #2 position in beer to Coors and is now the third largest brand. There are lots of issues at play here but the overwhelming packaging choices consumers face at the store exacerbates the situation. At my last visit to a large beer retailer, I was assaulted with a dizzying array of cans, bottles and package sizes in 6, 12, 18, 24 and 30 packs. I bought a 6 pack of a craft beer.

How about rum? Captain Morgan came in Original Spiced, Silver Spiced (for those who didn’t like amber rum), Private Stock (an upmarket extension) and Parrott Bay, a brand extension and Malibu competitor. Each product in the line up had a strategic reason for being.

At a recent visit to the CM website, I counted 15 products in the line. Seven were for the base CM brand including Tattoo, Lime Bite, 100°, and Long Island Iced Tea. Eight were line extensions in the Parrott Bay brand extension category. Talk about confusing.

Compare that to Sailor Jerry. One brand, one message and one position. The brand is growing rapidly with a compound 5-year annual growth rate of close to 50%. Captain Morgan’s growth has been sluggish over the same time frame despite the massive number of SKUs. (For those of you in the business, it sounds to me like – good for shipments not so good for depletions.)

In a recent interview with Wine and Spirits Daily, Diageo USA President, Larry Schwartz, had this to say about Captain Morgan:

“I think we got a little sophomoric at some point, and I think now we’ve brought it back. We were operating too much in the beer space…”

Larry, it’s all about consumer choices and confusion. You might want to think about Crown Royal as well.

Seagram’s Gin

January 14th, 2012 1 comment

I was always fascinated by Seagram’s Gin and at a recent lunch with a former production friend, we reminisced about the brand. I thought I would share that with my Seagram readers.

When I came to Seagram, the brand was selling at roughly the 3.3 million case levels. Thanks to Snoop Dogg’s Gin and Juice rap song, it grew to close to 4 million cases by the late 1990s. Today, the brand is still the leading gin but its sales are in the 2.5 million case range.

The product story of Seagram’s Gin epitomized the fundamental values of the company. In the commitment to quality and brand differentiation, someone way back when (perhaps Mr. Sam himself) decided that an American Dry Gin could be smoother and more tasteful if it were rested in charred oak barrels for 90 days. That resulted in a more expensive proposition and gave the product a pale straw color. Then, they decided to put it in an “ancient bottle” which evolved into the “bumpy” bottle the brand uses today.

In effect, from 1939 on, marketer after marketer pushed for the yellow tint to be removed and to figure out how best to deal with the bumpy bottle.

The consumer of the brand was, and still is, primarily Black. Many of the brand managers – regardless of their racial background – tried to change the audience composition. A small fortune was spent on marketing to the “general market” as though Beefeater Martini and Tanqueray and Tonic drinkers would suddenly switch to the yellow gin in the funny looking bottle.

Still, the hope and investment lingered on until a few things began to get through the thick skull of the brand manager in charge of Seagram’s Gin (for those of you who recall, he was a poster child for the Peter Principle).

First, among the brand’s myths, was the belief that the product had aphrodisiac capabilities. I have no idea how this happened; it must have been due to the yellow hue. As I recall, the reaction ranged from confusion to delight, mixed with concern about what to do. Finally, the ad agency came up with a campaign called “Everything they say about it is true.” Which commented on the brand’s equity and threw in a dose of confirmation. It ran for some time until the public affairs and legal folks got nervous.

Next came the game changer in the form of Mr. Dogg.

A common off premise consumption pattern was the cooperation among the drinkers, one of whom bought a bottle; another provided the cups and another brought the juice. The end product was gin and juice. And, Snoop Dogg made it famous with the song “Gin and Juice” and especially these lyrics:

Now I got me some Seagram’s gin

Everybody got they cups but they ain’t chipped in

Now this type of shit happens all the time

You gotta get yours, but fool, I gotta get mine.

The brand took off and thanks to the Tropicana relationship, a new premixed gin and fruit juice product was born called Gin & Juice.

My favorite recollection has to do with a launch meeting for the brand in the Southern region. I wasn’t there but this is how I pictured the event. The senior folks in charge went through the pitch, the brand’s reason for being and the likelihood of success. It was now time to taste the product. A bottle was removed from the case and an attempt was made to open it. The cap wouldn’t turn. No big deal, it happens. A second, third and fourth bottle was removed and tried again. None would open. The force of closing the cap at manufacturing was so great that it was impossible to open any of the bottles.

But at least we found a way to deal with the yellow hue.

Postscript:

The difference between how Seagram marketed gin to the Black consumer and how Pernod does it today can be seen by the following example. At Seagram, we spent much time and money finding emerging black artists whose work we showcased and publicized. Black history month was also a focal point.

At Pernod, some genius recently ran a program that co-packed a Du Rag on every bottle.

Très élégant.

Du rag promotion

Booze, the B-List and Beer

December 27th, 2011 No comments

I came across an article in USA Today indicating that US alcohol consumption hit a 25-yeat high. Americans drank the most wine on record (2.3 gallons per person). Spirits grew by 18% to 1.5 gallons. But, beer dropped 7 percent to 20.7 gallons according to the Beer Institute.

The report brought to mind an article in Wine & Spirits Daily back in October. Speaking to the National Beer Wholesalers Association, Tom Long of MillerCoors, indicated that the beer industry could learn a thing or two from spirits marketing.

To further illustrate the problem, according to Ad Age, AB InBev spent $555 million in measured media last year and still managed to lose a full share point. MillerCoors spent just under $400 million and lost half a share point. How does that work? Together they spent nearly a billion and lost market share. Is it the creative? Is it the media? Is it that consumer alcohol tastes are shifting to craft beers and spirits/wine? Probably all of the above.

Therefore, as a public service, I scoured the Internet to see if there is anything out there that I had not yet covered that might help the beer people.

First I thought about innovation.

What about new flavors? Look at the growth in flavored vodkas. First fruit then vegetables then exotic fruit, now all kinds of stuff. How about Whipped Cream, Marshmallow, Cupcake, Peanut butter? Probably too froufrou for the macho beer drinker.

How about new venues? I just read where White Castle is thinking about joining other fast food spots in testing the sale of wine and beer. On second thought, White Castle is where you go after drinking, if at all.

So, I came to the conclusion that the answer lies in celebrity tie-ins. There have been a slew of them in 2011, some as celebrity ownership and some as endorsements. All are in the spirits or wine business and none in beer, until recently. Here’s a blurb from the LA Times about the Hanson brothers: “Hanson burrowed into our heads with their hit 1997 song “MMMBop.” Now they want space in our gullets with their soon-to-be-released beer MMMHop IPA (Indian Pale Ale). They may want to consider co-packing the beer with other Hanson logo products – toothbrushes or lunch boxes.

How about signing a deal with Sean Diddy Combs? After making a ton with Ciroc vodka, I’ve read that he is looking at tequila. Either Diageo didn’t sign him to spirits exclusivity or they want to do a tequila tie-in or he just wants to move on. Perhaps a beer company can get this booze pied piper to pimp their beer.

Here are some other celeb efforts:

Sammy Hagar, after selling off the majority of Cabo Wabo Tequila, now has a new spirits brand called Sammy’s Beach Bar Rum. I guess he thinks that lightning will strike twice. If it does, maybe he’ll do a beer.

Perhaps the beer folks should look at celebrity tie-ins with those who have recently entered the wine business. Like retired basketball player Yao Ming selling his Yao Family Wines exclusively in China. Or, AC/DC distributing wines in Australia called Drops of Jupiter Petite Syrah and Calling All Angel’s Chardonnay.

What about celebrities from the reality shows? Bethenny Frankel may be available now that her Skinnygirl brand has been acquired. The beer people could use her for light beers. A real natural would be “The Situation” who is supposedly hawking protein vodka.

So the beer people have lots to choose from. But my favorite is country music star Toby Keith who launched his Wild Shot mezcal. I love what he had to say about it the Bloomberg BusinessWeek,

“All the whiskey’s already been spoken for…and everyone’s got a vodka, and one of my buddies does tequila…But, there was no one doing mezcal.”

Talk about insightful marketing analysis. He’d be great for a beer brand.

Whither Whisky?

November 6th, 2011 1 comment

I was meeting with my favorite, most knowledgeable wine and spirits guy the other day and we got to talking about the state of the whisk(e)y market. We decided that the world is changing for brown spirits except for the products from Scotland.

According to the Scotch Whisky Association, scotch grew in value and volume in the first half of 2011. But if you look closely at the data provided by Shanken News Daily, of the top brands, only Johnnie Walker and The Glenlivet showed growth.

When I look at other whiskies, I see real sustained growth. Jameson in particular, and the Irish whiskey category, in general, is on fire. I think it’s based on the imagery of the brand, the absence of the smoke/peat taste of blended scotch and, of course, its use in cocktails and as a shot.

Looking at American whiskies, the emergence of flavored products speaks to new users and new usage occasions. I think it will attract a new generation of consumers and contribute to growth in the long run.

To be fair, Scotch distillers have tried to innovate their products by increased aging and changes in barrel storage. While this may be of appeal to the current market, it is probably not likely to bring in a new cohort of drinkers. Although, what I like about Last Drop Distillers is that they have taken the age route to the ultimate with over-age products. Not just aged scotch and cognac but products that reflect category heritage.

If you go to an event or tasting involving scotch, you always see some distillers dressed in kilts. It’s like a metaphor for being trapped in a time warp and reluctance to contemporize the category.

However, two recent news reports show that there are people out there looking to take new approaches to scotch. Wine and Spirits Daily reported last week a company “will start selling single grain and blended Scotch whisky aged 3 years, in a can.” I’m not sure if it is aged in the can or aged then packaged in a can. But don’t worry; the can will be recyclable aluminum. That will attract new scotch users who are environmentally conscience.

Or how about this one: According to the Daily Mail via the Buffalo Trace Newsletter, a company has developed the world’s first “halal whisky” made without alcohol designed to appeal to non-alcohol drinking consumers. The SWA is, not surprisingly, upset. The taste of scotch without the alcohol sounds to me like all pain, no benefit.

Scotch in a can and halal whisky do not fit my notion of innovativeness and contemporizing the category. Better off sticking to kilts.

By the way, that reminds me of something I heard while in Ireland at a distillery some time ago. One of the plant managers, over a few drinks, told me the following:

“You know, the Irish taught the Scots three things – how to make whiskey, how to play bagpipes and the wearing of kilts. But… we forgot to tell them that the last one was a joke.”

 

Social Media and Booze

August 21st, 2011 No comments

Unless you’ve spent the last ten years in a cave, you’re aware of social media and it’s impact. You may not be a fan or use Facebook, Twitter and the like, but it certainly has changed the way we communicate and interact. In marketing, social media can readily build or damage brands.

My friend Joan Treistman of The Treistman Group alerted me to an interesting piece of market research dealing with the importance of brand discussions on social media. I think it’s worth sharing.

A study sponsored by a company called Performics and reported in the Center for Media Research, indicates that 52% of those surveyed believe that voicing opinions on social networking sites can influence brand or company business decisions.

More importantly, the survey goes on to describe the influence of social media on consumers in various product categories. For example, nearly three quarters of respondents who purchase entertainment products discuss them on social networks.

The influence of social networks on alcohol is strong as well – 43% discuss purchases on social networks; 15% claim to have actually made a purchase as a result of social network content. The reasons for discussing alcohol beverages are based on brand loyalty (36%) to compare prices (25%) and to give advice (18%).

Most interesting of all, the reasons for following the alcohol beverage category, among half of the respondents, is that they are loyal customers of a particular  brand.

I couldn’t find a single major brand of spirits that didn’t have a Facebook page created by the brand and/or consumers. But presence is not the same as impact. If you Google Top Facebook Pages and Why They’re Successful, you won’t find a booze brand but you will find Red Bull, Coca Cola and even Jones Soda.

Obviously the industry has to deal with audience age composition issues that may put it at a disadvantage versus other brands. But who said it was easy? It’s called creativity.

Bill Bernbach

August 14th, 2011 No comments

Last week most of the advertising industry trade magazines had articles about Bernbach on the centennial of his birthday. I thought I would contribute by relating the story of him, Edgar M. Bronfman and Chivas Regal.

Before I do, however, for those of you who are unfamiliar with him, here is some background on the man who revolutionized creativity in advertising – no, make that brand and product selling.

Bill Bernbach’s style of advertising changed brand communication. He was the anti “Mad Men” focusing on compelling messages that broke through the clutter and resonated with consumers. “The difference between the forgettable and the endurable is artistry,” was how he put it. So think about such ads as Avis “We Try Harder” or Volkswagen “Think Small” or “You don’t have to be Jewish to love Levy’s real Jewish rye bread.”

His effort on behalf of Chivas Regal is an interesting story as described by Edgar M. Bronfman in his book Good Spirits, and by Paul Pacult in A Double Scotch – How Chivas Regal and The Glenlivet Became Global Icons.

In the 1960’s after the acquisition of Chivas, the brand began to languish in the face of competition from such lighter scotches as Cutty Sark and J&B Rare. Edgar managed to convince his father that changes needed to be made to stem the sales declines. These included product reformulation, new packaging and a new ad campaign. Enter Bill Bernbach.

As the story goes, when Bernbach showed the new ads to Edgar there was one ad at the bottom of the pile that he kept hiding. When pushed by Bronfman to reveal it, Bernbach pointed out that it was intended as an introductory ad for the new package and that he was concerned that Edgar wouldn’t dare run it.

The headline read “What Idiot Changed the Chivas Regal Package?” To his credit, Bronfman saw the benefits of the brashness and self-mocking tone and, to make a long story short, the ad ran.

The team at Doyle, Dane and Bernbach went on to change the brand’s fortune by understanding consumers and reaching them through challenges and taunts that were fun and resonated well. My favorite – “If you can’t taste the difference in Chivas Regal, save the extra two dollars.” And, the classic, “The Chivas Regal of Scotches.”

In addition to the central print campaign, the agency created a cartoon campaign, which picked up on the theme. A particularly memorable one showed a ship leaving the dock with a case of Chivas left behind. The caption read, “They’ll be back. They forgot the Chivas.”

Did the creativity translate into brand sell? According to the Pacult book, when DDB took over in 1962, the brand was selling around 135,000 cases. By 1979, sales had risen to 1.1 million.

All I can close with is a rewording of another great Bernbach ad – “Mama Mia, that’s effective advertising.”

Jack’s New Home

May 18th, 2011 2 comments

Brown Forman just announced a revised and revamped package for Jack Daniel’s. Bloggers and industry observers are starting to weigh in on the pluses and minuses, so I thought I’d jump in as well.

Once upon a time, manufacturers were frightened of package changes. Concerns about loss of heritage and denigrating the brand’s equity were always the main “don’t do it” arguments. But the most damaging concern was “what will the consumer think.” Over the years, I’ve even heard it said that a package change would suggest a product change and result in erosion of appeal among consumers.

Baloney. Well, sort of.

If a packaging shift involves walking away from the key elements of a brand’s equity then it is doomed. The best recent example of that is the fiasco with Tropicana. The main icon, an orange with a straw, was removed in favor of a nondescript glass of juice. As you may recall, the package change effort was a disaster and Pepsico reverted to the original in a hurry.

However, if a manufacturer evolves or tweaks the packaging by removing the clutter, making it less wordy and updating the message, I believe it enhances the consumer relationship and brand equity. I haven’t seen the new package as yet but from what I’ve read, the new Jack Daniel’s look does just that. Good for you for making the brave call.

One last thought — I call it the chicken soup approach to marketing. Turning a brand’s performance around based on packaging changes, major or minor, is like chicken soup when you have a cold. It may not help but it can’t hurt.

“It will never sell” vs. “You never know”

March 31st, 2011 No comments

I was chatting with James Espey the other day and the subject of Baileys Irish Cream came up. For those of you who don’t know him or of him, suffice to say that James is a legend in the spirits industry as a very senior manager that has successfully run companies, categories and brands. In addition to creating the Keepers of the Quaich (see Sept. 28, 2010 posting) James’ innovation history includes the invention of Malibu, significant involvement in Baileys and much more.

He is still at it with a range of new and unique ventures including Last Drop Distillers among other ventures.

Anyway, the subject turned to what it takes for a brand to withstand the naysayers (generally corporate types who are risk adverse and would rather buy than create) and the prognosticators (the self proclaimed experts at prediction of success and failure). James told me the story of a well known industry observer who took one look at the Baileys idea and proclaimed, “that s**t will never sell.” Well, the forecast was wrong but never mind, that gent went on to make millions in the industry anyhow.

The Baileys story I had heard came from the late Jerry Mann (former Seagram CEO) right after I took over new products. His advice began with a typical Jerry Mann comment. “Listen pal,” he said between puffs, “in this business, you just never know what will sell and what won’t.”

It seems that when Jerry was running a distributor operation in California a friend called and asked for a favor, which was to buy some 5,000 cases of this new cream liqueur. He thought it was doomed for failure but a friend asked a favor and Jerry complied. As he put it, “we stuck the crap in the back of the warehouse and forgot all about it.” Then one day out of the blue, a sales manager called and informed him that retailers were clamoring for “that crap at the back of the warehouse.”

7 million cases per year later, despite ups and downs, lower priced knock-offs and diet and weight concerns, Baileys is still going strong and a true global brand.

According to James, it was launched using a well thought out new product approach, a strong dedicated team, management commitment and an understanding of consumer needs and wants. Which I believe gave the brand its momentum. Once you get momentum, boys and girls, even a large bureaucratic behemoth can’t slow you down.

Just ask Seagram’s 7 Crown.

Super Bowl Ads

February 8th, 2011 No comments

So by now, you’re over the game (pretty exciting by super bowl standards) and you’re tired of hearing the ad and marketing pundits give their views on the bad, the worst and the ugliest.

Got time for one more opinion — one that relates to the booze business?

In the past, the Budweiser ads were often more interesting than the game. Not this year.

Is it just me or has the quality, and therefore the effectiveness, of Budweiser advertising declined ever since InBev took over? I used to think that the international owners just didn’t understand the US market and that cost reductions were more important than brand building. I think I was wrong. The Budweiser ads were expensive to produce and cost a fortune to run. So it has to be something other than the owners.

Ad Age reviewed the Super Bowl ads and gave 3½ stars to a Motorola ad and none to A-B. Yet, both came from the same agency, Anomaly. So either Motorola got the better creative team or the marketing folks there are sharper.

There’s a company called Ace Metrix, which uses online panels of TV watchers to score the ads based on metrics such as persuasiveness and likeability, among others. They reported that the Dorito ad was #1 with 662 points (out of a possible 950) and Bud Light was #23 with 567.

So here’s my takeaway/insight – in the beer category, as in many others, consumers select brands on price, promotion and “group brand loyalty.” Inclusion in the group is based on many things, including image as a byproduct of communication or advertising.

Seems to me that the opportunity to reach the single largest audience at one time would compel a beer marketer to present ads that capture the audience’s attention and generate positive word of mouth.

But, then again, what do I know. I’m a spirits and wine guy. We can’t afford to advertise on the Super Bowl.

What does website design and spirits manufacturing have in common?

January 6th, 2011 2 comments

Two different worlds, right?

Maybe not.

Like most people I’m on the Internet constantly — learning, exploring, researching, being entertained, buying stuff and on and on. More often than not, I get to a website and wonder, “What the hell were they thinking when they put this up? Why is it so hard to move around and find what I want?”

It’s fairly obvious that the problem lies in the “manufacturing” of some websites. They are either over designed or put up on the fly with low cost as the driving force. That’s part of the reason.

I think a more important factor is that the webmasters or designers are thinking of the “product” or what it takes to make it happen and don’t consider the user or the “consumer.”

They’re thinking manufacturing not marketing.

I once paid a visit to one of our main plants and spent a day or two explaining what marketing was up to and why our needs can sometimes be difficult to execute. At the same time, I wanted to learn how the products were made and “walk in the shoes” of the manufacturing people.

At lunch one day I got into a conversation with the plant manager. “You know, if you got rid of the embossed seven with the crown on top (Seagram’s 7 bottle), we could produce a hell of a lot more per day. Those things on the back sometimes knock up against each other, break and we have to stop the line to clean up.”

I pointed out that the brand was falling badly and the last thing we wanted was to mess with the heritage, identity and packaging. He explained that his mission was to provide the best quality product while keeping the cost of goods in line.

We got to understand each other’s agenda and from that day on, we worked in partnership matching consumer expectations with manufacturing excellence.

Above all, he was a consumer himself and understood brand equity from an end user’s standpoint. The same is true for many web designers. But, I believe there are also many who probably never visit the site they create after it’s up.

Maybe it’s just the ones I go to.

“What did the client say?”

December 13th, 2010 1 comment

I came across an interesting and fun piece in Ad Age Daily I wanted to share with you, in case you haven’t seen it.

Derek Walker, whom I’ve never met but hope to, has a blog about advertising. He describes himself as “the janitor, secretary and mailroom person for his tiny agency, brown and browner advertising based in Columbia, S.C.” So right off the bat I like him.

His posting in Ad Age was called, Clients Say the Funniest Things. Since I’ve been on both sides of the desk I found his client quotes and reactions to advertising creative to be right on target and very funny.

So to those of you on the agency side, please enjoy. Those of you on the client side, well, here’s what some of your counterparts elsewhere, ahem, sound like.

For those of you who haven’t witnessed the presentation of creative messages and the reactions, this will be a window on the dance that sometimes takes place.

Here’s the interesting part — these reactions often happen to marketers themselves when they present creative work to their management who, in effect, is a client.

With thanks to Derek Walker for his approval, here are some client comments he has heard:

  • “We love the concept, it’s great! But can we change the visual, rework the headline and adjust the copy. Other than that we love it!”
  • “We don’t want ‘friends’ or for people to ‘like’ us. We want customers.”
  • “In the marketing class I took in college, the instructor said you should mention your company’s name at least seven times in a radio spot to be effective. Can we add 5 more mentions? That would make it great.”
  • “We don’t want to use emotions, we’re talking to business people and they don’t have them.”
  • On social media: “I get it but I’m worried that people will start talking about our product without us.”
  • After laughing hilariously for a couple of moments: “That’s great! It does everything we want and it stands out. But seriously, let’s see the real work.”
  • “Everyone loved the concept, then I took it home and showed it to my wife who used to be an English teacher and she said the line isn’t grammatically correct. Can you write a new headline?”
  • “We can’t do this; it is nothing like what we’ve done in the past.”
  • “Why talk to customers, can’t we just tell them what we offer?”
  • “I don’t understand why you put in so much effort. It’s only a website. Couldn’t we just throw up something and be done with it?”
  • “None of our competitors are doing or saying anything like that. How do we know it will work?”
  • “We don’t want to spend any money but we want everyone to know about us, we want to be everywhere our customers are.”
  • “Do we really need to be creative? I mean, isn’t our product great enough to attract attention?”
  • “I don’t believe in advertising, we’re only doing this because our competitors are.”
  • “I sure miss the days when all we had to do was produce a calendar with tits and ass and everyone was happy.”

For some of us in the booze business, the last one really resonates.

My own personal favorite is when a presenter of creative gets pushback from the client and asks for specifics on how to address the concerns. Too many times, I’ve heard the phrase, “I can’t tell you… I’ll know it when I see it.”

Quality Control

December 6th, 2010 No comments

I can’t tell you how many times I’ve heard or even used the expression — “It’s all about what’s in the bottle” — when referring to the appeal of a spirits brand.

It’s homage to the intrinsic appeal of the product and recognition that image alone is not sufficient.

Couple of interesting questions…

If that’s the case why do some awful tasting brands of booze sell well? To maintain my friendships in the industry I won’t cite any examples but lets just say there are brands that sell more on image than product taste.

The more important question is, who decides if it’s “in the bottle?” For the smart marketer it’s based on consumer taste tests, sensory panels and research of that nature. Generally there are benchmarks, action standards and criteria or hurdles of acceptability.

Except when the owner or senior executive decides that he/she knows better than the consumer.

At Seagram there were the owners who made the decisions and their deputies who established the criteria.

I once asked the head of quality control who had been trained by Mr. Sam about Jack Daniels and got a 20-minute lecture on what was wrong with the quality of the brand. I protested that his view of the product was counter its performance in the market place and consumer appeal. Good thing Mr. Sam was long gone by this time or my head would have been rolled down the building plaza.

A good friend who was there when Seagram introduced a Scotch called 100 Pipers recently told me a story that illustrates the point.

Despite the fact that the company owned Chivas Regal, the leadership at the time, from Mr. Sam on down, was Canadian whiskey driven. So when the idea of 100 Pipers came along the QC folks, led by the owner, kept rejecting the formulation until it reached their notion of acceptability. Research was ignored; R&D and production was ignored; they kept fiddling with it until it tasted the way they thought it should. They felt that no one wants to drink Scotch so take the Scotch taste out.

The result — a good tasting Canadian whiskey that Scotch drinkers hated and Canadian whiskey drinkers wouldn’t consider. It never clicked.

Guess what? According to data I recently saw, it sells over 2 million cases today with more than half of that in Thailand. Who knew?

Still made by Chivas Brothers and owned by Pernod Ricard. Bet it tastes like Scotch too.

Great Tsotchkes (aka Swag) I Have Known

November 30th, 2010 No comments

In keeping with the theme of the last few postings on sales promotion, dealer loaders and assorted point of sale issues, I thought I would continue that theme particularly in light of the holiday season. The Advertising and Promotion Awards in the Nov/Dec issue of Beverage Dynamics also prompted me to address this subject.

First, for the uninformed, the Urban Dictionary defines Tsotchke as “free goods given by companies to consumers, buyers, trade-show participants or other target audiences to promote brand recognition or customer loyalty.”

So, here are some points of view on the subject including some picks and pans from yours truly…

The most consistent and impactful POS has to go to the Absolut folks, particularly their multi-case floor displays. In fact, Beverage Dynamics gave it 1st place for 2010. No wonder, since Carol Giaconelli at Pernod Ricard (and a Seagram alumnae) is among the most imaginative sales promotion people I know. Even after working on Absolut for many years and for different regimes, Carol maintains her creative edge.

While I’m on the subject, I suppose the Hall of Fame for floor displays with loader items has to be the Captain Morgan mirror. According to Sam Ellias, the CM guru back in the day, that promotion was a prominent reason for the brand’s early success. Apparently, all a sales person had to do was to show the mirror in order to get the question, “how many cases do I need to buy?”

I managed to find a photo online. Despite it’s popularity at the time, you can still get one on eBay for under $25.

Now to the pans…

There are lots of awards in Beverage Dynamics for co-packs, gift packs and cartons/tins. The so-called value added packaging. Sorry, but I still don’t get it. In this environment manufacturers expect to entice consumers with Tsotchkes? If you want to measure effectiveness go to a flea market or eBay after the holidays and you’ll find glasses, shakers and pitchers galore. I wouldn’t be surprised if most of them came from retailers.

The Hall of Shame best/worst sales promotion item of all time came under my watch on behalf of Coyote Tequila. Don’t get me wrong the promotion item was great. It was a back bar pedestal with a howling Coyote as the centerpiece with a bottle on the base. Each time the bartender picked up the bottle a button was triggered and the sound of a howling Coyote was heard. Very cool. Very effective.

Just one small problem — Coyote Tequila tasted like crap. As the saying goes, “I wouldn’t drink it with your mouth.”

And now, dear reader, I have two questions for you.

Care to share your nominees for the best and worst promotions you’ve seen now or in the past? Either hit the comment button or send me an email.

Also, as I went through the 40 advertising and promotion awards by Beverage Dynamics, there were lots of first, second or third place winners from many major suppliers — Brown Forman, Heaven Hill, Skyy/Campari, Pernod, Bacardi and others. None were from Diageo. I wonder why? It could be that their market position and brand shares allows them to spend in other ways. That would explain the dearth of POS recognition. But no ads, traditional or digital, made it either. Huh.

As we used to say in Brooklyn, wait ‘til next year.

Tunnel of Love Tour

November 16th, 2010 1 comment

I first heard this expression when I was running Seagram America’s marketing and went with the CEO to visit markets in South America.

His view of senior management market visits can best be summed up as follows: “What a waste of time. Everything we will see in the stores will be staged for our visit. It’s a tunnel of love tour but we need to do it.”

I felt he kind of missed the point a bit. Market visits were, and still are, designed to “see how we look” and in that regard it’s in the human condition to put your best foot forward. But you can’t stage how the competition looks and what they are up to at point of sale and who can control what Mr. Retailer has to say.

My favorite tunnel of love anecdote took place in a large, important US market known more for its on-premise business than retail stores. Nevertheless, the distributor wanted to show us how good he and our local marketing and sales reps were doing and how our floor programs stood out.

The entourage — a better description might be the sheriff and the posse — went off on the visit/tour and once inside a store, some spoke to the owner or manager while others checked the displays and floor programs.

A member of the group was fascinated by a multi-case display of one of our brands and the very attractive and large case card that accompanied it. Never having seen it before, but still admiring it, he called others over to have a look. Someone touched the case card and to his surprise, smudged it. It was hand painted… and still wet. We all smiled at what appeared to be a permanent holiday display that obviously had just been put up for our visit. “That’s okay,” someone said, “maybe it’ll stay up and look how much real estate the brands have.”

Smiles turned to laughter at the next stop, also a large store with a massive display right at the entrance.

There was the same case card with the same smudge in the same spot.

I have no idea how they moved that thing so quickly.

Retailer Incentives

November 11th, 2010 No comments

He was hired as the head of market research (aka marketing insights) from outside the booze industry. Bright eyed and bushy tailed, he decided that he was going to learn the business by talking to consumers, retailers and the sales folks on the street.

For weeks he did nothing but visit market after market and rode along with local sales managers. He learned a great deal in the field, more than by sitting at a desk and listening to presentations.

Among other things, he learned that the business is based on relationships and, for the most part, respect between the buyer and seller. He learned how the 3-tier system works, how the consumer needs to be factored into the equation and the difference between a smart sales rep and one that’s just going through the motions.

The plan was to see as wide and diverse set of retail situations as possible — bars at night and stores during the day. Some open-ended consumer focus groups were thrown in here and there, just for the learning.

One day he found himself in Detroit. The morning was spent in suburban stores and the afternoon was devoted to downtown. The local sales manager for the company was among the best. Really knew his stuff.

A new word entered his vocabulary — “bank” store. Stores in tough urban settings with thick Plexiglas separating the clerks and the customers.

At one large, important account, the owner greeted the sales rep warmly. In a Middle Eastern accent, said to the sales rep, “How are you? What do you have for me today?”

“We have a Seagram’s Gin program coming up that you might want to look into,” said the salesman.

“What will I get?” asked the owner. “Never mind,” he quickly added, “I don’t need to promote Gin. What’s in your bag? Any tee shirts or hats?”

“No, just shelf talkers, window ads, banners and sales sheets.”

“Paper” said the owner. “I don’t need no paper.” “Got any more Captain Morgan mirrors? My father-in-law saw it in the store and took it home. I want one too.”

“I’m sorry,” said the salesman. “That program ended months ago and it was so successful we ran out.”

“ What do you have in the trunk of your car?” asked the storeowner.

By now the market researcher is watching this interchange with his mouth open and in total shock.

“Listen, I’m just showing this gentleman from New York around the market and different stores. You’re an important account for us and I wanted him to see it. I don’t have sales promotion or loader items. Maybe next time.”

“Sure, sure” said the storeowner. “What do you have in your trunk?”

“Nothing.”

“Come on, come on, what’s in the trunk?” asked the retailer.

With total poise and calm, the salesman handed his car keys to the owner and said, “check for yourself.”

He went on, “but this time leave the spare tire.”

{Got any sales promotion stories you want to share?}

Product Placements

September 14th, 2010 No comments

Think about E.T. and Reese’s Pieces. Smirnoff and James Bond. “You’ve Got Mail” and Starbuck’s.

Product placements in film and TV, depending on whom you talk to, are considered a critical brand building or reinforcement tool. There are some, however, who see it as low impact — it’s ok if you don’t have to pay for it.

In doing a little research on the subject lately, I’ve come across some interesting information.

First, consider this from a study on the subject: (Link)

“…the type of product-placement an advertiser opts for should depend on their marketing goals. If you want to build awareness … it’s probably best to opt for a placement that plays a role in the story itself. But if you just want to reinforce preferences for a well-known brand (say, “Coke” versus “Pepsi”), it’s probably not necessary to go to that expense. Just having your brand in the movie works just as well.

Second, I spoke to Joel Henrie who runs Motion Picture Placement, a leader in the field and an old friend who informs me that the upcoming Wall Street: Money Never Sleeps (the sequel) had adult beverage companies tripping over themselves to pay for placement. We’re talking big bucks here.

My first exposure to product placement (albeit from a distance) was shortly after I joined Seagram. It was on behalf of Herradura Tequila.

Based on film industry connections, the company had an opportunity (which I believe turned into a mandate) to place the brand in a film called Tequila Sunrise. Aside from the title as a perfect fit, the placement involved brand exposure galore — verbal mentions, bottle exposure on the bar and consumed by the actors, signage, even a bus passing by with a Herradura ad on the side. So, there was a role for the brand in the story, not a central role, but the title alone made the brand a key element.

Even more, Tequila Sunrise was star studded and sure to have target audience appeal. Mel Gibson, Michelle Pfeiffer and Kurt Russell starred; Robert Towne wrote and directed the movie. A sure thing, right?

The movie sucked and never lived up to its promise. A Variety review summed it up nicely: “There’s not much kick in this cocktail, despite its mix of quality ingredients.” Roger Ebert wrote, “It’s hard to surrender yourself to a film that seems to be toying with you.”

The small number of people who saw the film agreed.

I’ve always been a proponent of product placement and integration. To me, it makes good sense as a brand-building tool. But, I’ve learned the following:

  • Positive impact on a brand is not a foregone conclusion. No matter how well the product is shown and integrated, sometimes, the only winner is the TV or film producer. But, that’s true for all media.
  • For adult beverages, how the product is portrayed is as important as the portrayal itself. Enough said.
  • If the story doesn’t click with audiences, the brand becomes “collateral damage.” Unfortunately, there’s no real way to predict it, but worth the shot.

Have you noticed what E.T. did for Reese’s Pieces? As I’ve been told, it was first offered to Mars on behalf of M&Ms and they turned it down. Hershey said yes.

Absolut Tales

August 29th, 2010 No comments

The Gulfstream took off from Stockholm’s Arlanda airport with a full load of executives, all of whom had the satisfaction of knowing that the global distribution rights to Absolut were signed, sealed and delivered.

If you’ve ever flown on a corporate jet, you know how great it is. You board quickly and easily, take off on time (or even ahead of time) and generally are met on the tarmac a few steps from the plane and off you go.

Despite this great convenience, I’ve heard people complain about the absence of frequent flier miles, which always makes me laugh at the silliness of the thought. For me, however, this particular flight had one disadvantage — it was full of Seagram brass. Every one of the 14 seats was taken and there was no place to hide. And, every one of the 14 had 5 or 6 ideas about marketing and how best to grow the brand further. After all, we were taking over the brand from the legendary Michel Roux who grew the brand with a series of innovative and effective marketing actions.

While getting the brand elated us, we were also mindful of the daunting task ahead. Especially the marketing guy…me.

This was best summed up by the owner who, after laying out his thoughts and vision, said, “Arturo, I have four words for you — don’t f**k it up.”

Michel Roux was indeed a hard act to follow. Carillon Importers was part of a large corporation, but he ran the brand entrepreneurially, with vision and resources to take this fledgling brand to renowned marketing levels.

There is a great story about Michel’s brand champion efforts that I recently asked him to confirm. I wasn’t sure if it was true or a booze business myth.

It seems he was in the Detroit airport waiting to depart when he noticed a man wearing an Absolut t-shirt. Alarm bells went off in his head for two reasons. First, there were no Absolut t-shirts and he and didn’t want them, so clearly it was counterfeit. Second and most important, the man in question (according to Michel) must have weighed over 350 pounds and despite the triple XL size, it was a very snug fit.

Clearly bothered by his brand portrayed in such a manner, Roux stopped the man, told him he was looking for that particular t-shirt and offered him $100 to buy it. The man accepted the generous offer. They went to a souvenir store, bought a replacement and now Michel owned it.

The man left happy with this transaction and the Absolut t-shirt was promptly tossed in the trash.

True story.

In my opinion, the Absolut brand has gone through 4 periods in its development. The first era was with M. Roux and Carillon Importers. Next came the Seagram years and further, albeit different, growth. The third period was one in which the brand began to languish despite the efforts of some (but not all) capable people. Today, the ownership of the brand is in the hands of Pernod Ricard with the difficult task of once again polishing its luster.

I plan to cover the Absolut story from these vantage points in the future.

Borrowed Credentials or… Mention my name and it will sell

August 21st, 2010 3 comments

Borrowed credentials is a term I like to use when a brand “borrows” something or someone to identify with, such as a brand name or a person as the endorser.

The intent is the “approval” or “license” to give a brand some prominence. But, more often than not, it doesn’t seem to work.

Three categories will help you to see where I’m going:

  1. A brand that has licensed the name from another business or category. Godiva, for example.
  2. A brand closely identified with a star or celebrity. Such as, Ciroc.
  3. (My favorite) A brand named after a star or celebrity.

So here we go…

Licensed Brand Name

The two that come most readily to mind are Godiva and Starbuck’s, both in the liqueur category. I gotta tell you that I thought Godiva would be a crack-of-the-bat homerun. And, I wanted to license Starbuck’s so badly, I could taste it. Alas, neither has set the world on fire.

Association with a star or celebrity

This is a mixed bag best characterized by the nursery rhyme… “There once was a girl with a curl in the middle of her forehead. When she was good she was very, very good but when she was bad she was horrid.”

So in the “good” category we have (not necessarily in order of goodness):

  • Ciroc and P Diddy (forgive me if I have the wrong name; who can keep up?). Probably the gold standard in celebrity links.
  • Crystal Head Vodka and Dan Aykroyd — talk about chutzpah.
  • Cabo and Sammy Hagar — (notice I didn’t say Cabo Wabo) good for you Skyy, it’s about the product not the star.
  • Red Stag and Kid Rock — the brand is a homerun with or without him. But he sure does help.
  • Margaritaville and Jimmy Buffett — remind me to tell how this came about. But even without Seagram and me, it’s doing well. But, Land Shark beer is doing even better.

The “not so good” entries I’ve come up with so far (let me know about any I’ve missed) include some that faded faster than a cold beer on a hot day:

  • 901 Tequila and Justin Timberlake — run that by me again? I got it but I don’t get it.
  • Sobieski Vodka and Bruce Willis — it’s the price point, dummy. It ain’t about you. Even if you’re still involved.
  • Godfather Vodka — You got to be joking.
  • Conjure Cognac — by Ludacris. I totally agree but ludicrous is spelled wrong.
  • Armadale Vodka — by Jay Z.  Why don’t you ask P Diddy how it’s done?
  • 3 Vodka — by Jermaine Dupri. Enough said.
  • Mansinthe — by Marilyn Manson. I didn’t make this up, folks.

Named after a star or celebrity

My favorites by far. Do I hear a drum roll?

So far I covered the good and the bad. Here comes the ugly:

  • Trump Vodka. He doesn’t even drink for heaven’s sake. Could be a pilot for Celebrity Booze.
  • Willie Nelson’s Old Whiskey River Bourbon. Enough said.
  • Danny Devito’s Limoncello. Close but no cigars.
  • Jefferson and Sam Houston Bourbon. Not kidding; Google it.
  • Frida Kahlo Tequila. I love her and her work but… who dun it?

And the winner is…

  • McMahon Vodka. Would have worked with a name like, “Here’s… Johnny.”

Lessons learned:

None of the top selling brands have borrowed credentials…unless you count Captain Morgan.

I would like to meet the people behind some of these efforts, there’s a bridge they might be interested in buying.

Where would the spirits industry be without brands to pour off?

What’s next…the Lindsey Lohan Liqueur?

Advertising – The Client

July 24th, 2010 No comments

Two of my favorite quotes about advertising:

“Every advertisement should be thought of as a contribution to the complex symbol, which is the brand image.” David Ogilvy (O&M)

“I have always believed that writing advertisements is the second most profitable form of writing. The first, of course, is ransom notes…” Phil Dusenberry (BBDO)

Years ago when I was in marketing research, the CEO of a midsized company and a good friend asked me to conduct some focus groups on a new campaign his ad agency had developed. After doing the work, I came back with the recommendation that he proceed – the message was in line with the strategy and consumers liked the creative effort.

He kept challenging me on each and every positive insight I shared with him. Finally, in exasperation I asked my friend/client what is the problem. He looked at me and said, “Arthur, there is nothing you can tell me that will change how I feel. I hate the campaign.” “So why did you bother to hire me to test it,” I asked. “I was hoping consumers would hate it as well. Now I’ll just kill it on my own.”

Our debate continued. “What don’t you like about it?” “I just don’t like it,” was the reply. “Well why not give your agency some guidelines for what you’re looking for?”

“Listen” he said, “I’ll know good advertising when I see it.”

Oh, it’s good to be the CEO.

Find a hole and fill it

July 17th, 2010 No comments

This blog has given me the opportunity to re-connect with friends and to make new ones like David van de Velde whose business motto is the headline for this posting.

In addition to being a very smart and affable fellow, David is an interesting entrepreneur and created Ketel One and Van Gogh Vodkas. In that regard, he changed the spirits industry.

I hope one day to write his full story but here are a few things that make him so interesting.

Let’s start with the motto. In an age of me-tooism, finding a hole and filling it speaks volumes about brand development strategies.

Not long after Seagram got Absolut Vodka, I kept hearing about this new brand, Ketel One, which was unique in its packaging, name, underlying concept and one other “outrageous” factor… a price at a significant premium to the category.

In addition, they concentrated on bartenders and servers and used videos and events to tell the story and even special olives for a martini. Everywhere I went at the time, all I heard was how we needed to learn from the Ketel One folks.

Many people think that the ultra premium vodka market was created by Grey Goose when, in fact, by the time Grey Goose came along, Ketel was already doing 200,000 cases.

David’s understanding of consumers is very impressive. He describes the target customer for high-end vodkas at that time as someone who wears Armani suits without pockets. Someone who walks into a bar and is holding the following – car keys with a Mercedes or BMW logo, an expensive cell phone and a wallet chocked full of goodies. No pockets. The question he asked himself is – would this person drink anything but a top shelf brand?

After Ketel One, he created Van Gogh vodka and brought the flavored category to new levels.

A little birdie told me he will be celebrating a milestone birthday this week so congratulations and keep finding and filling those holes.

Crown Royal

July 8th, 2010 4 comments

Crown Royal has always been an iconic brand. But to me it’s been a bit of a mystery.

When I first met it as a consumer, it was the brand my grandfather served when company came over. Philadelphia Whiskey was his usual fare but his Crown Royal was special.

I’m not an historian on the brand but from what I can gather over the years, at the outset it had important equities but just needed a spark. The taste was great and unlike other whiskies at the time, unique packaging inside and outside, a back story about the royal visit to Canada and very aspirational look and feel. The spark occurred when oil workers from Canada working in the Gulf of Mexico (way before the current disaster) came to Gulf cities on their night off, with pockets full of money, and wanted the best whiskey they knew from home…Crown Royal.

As the story goes, this set off the growth and proliferation of the brand, primarily in the South.

It was marketed in the Seagram days in a classic brand-building manner. ‘Push’ and ‘pull’ efforts worked together successfully and the brand grew — even while vodka was growing by leaps and bounds.

The sales and regional marketing component, orchestrated by Jim Reichardt, was top of the game. All the activity was integrated and based on strategy, from the distributor focus to programming to ‘pull’ activity at retail. Above all, carefully thought through marketing innovations were introduced under Jimmy’s watch.

On the national marketing side, programs were developed to maximize the equity – especially the bag – and develop relationships with the core consumer. And, the advertising was that unique combination of creative excellence combined with brand recognition and sell. Not your average garden-variety ad campaign.

Everything on the brand was done for strategic reasons. The sole line extension (at the time) was Crown Royal Special Reserve whose intent was to protect the brand’s flank from above and make a price-value statement about the base brand. It was not to make a number. In fact, many worried about cannibalization of the base brand, which never occurred. At one point, both were growing at double digits.

Lately I’ve been looking at Crown Royal and how it’s doing. Last year was a tough one for the brand as it was for most high-end spirits. But I noticed the following in WSD the other day–

“…Furthermore, Trevor {analyst} believes the promotional support … behind Crown Royal ‘seems to be paying off,’ perhaps partly helped by its new, more expensive offering, Crown Royal Black.”

I also noticed that there are 5 Crown Royal products in the line.

I think my grandfather would have been confused.

Organic Booze

June 21st, 2010 No comments

I just got back from a trip to LA and my head is spinning with matters having to do with green in general and organic in particular.

I saw the following on a brochure for the Santa Monica aquarium:

“Printed on 100% recycled content, 100% post-consumer waste, processed chlorine free paper using soy-based inks.”

Once I got past the ‘post-consumer waste’ part, I thought, did they expect people to read or eat the brochure? But, these are important matters and we need to pay attention to what is becoming the “green” lifestyle. Including the alcohol industry.

The June issue of Cheers has a cover story on organic drinking. The following tidbit of information caught my eye.

According to the Greenfield, Ma.-based Organic Trade Association, sales of organic beer, wine and spirits were up last year. Organic beer sales totaled $41 million in 2009, up 11.7 percent from 2008; organic wine sales equaled $161 million, up 7.5 percent; and spirits were up 16 percent with $7 million in sales.

A drop in the bucket, sure, but there is a market for organic alcohol products especially in wine. In spirits, it’s the vodka category that leads the way with dozens of entries although Chatham Imports (Crop Organic Vodka) recently introduced Farmer’s Botanical Gin. In tequila, more and more organic products are entering the market.

The gist of the article seems to indicate that the organic trend in alcohol is here to stay.

A consumer friend who is not in the industry can best sum up my view:

“If organic means smoother, purer, better tasting, I’m all for it. But to tell you the truth, when I’m having a drink, I’m not thinking about hugging trees.”

Beer Market Woes

June 1st, 2010 No comments

Today’s issue of Ad Age Daily has a lead story on declining beer sales. Ad Age Daily

Industry shipments are down 4% (Beer Institute); for the four weeks ending May 16, only 4 of the top 30 brands posted gains  (SymphonyIRI); the big boys saw large declines – Bud Light down 5.3% and Miller Lite down 7.5%, both vs. 2009 sales.

How come?

I don’t think it’s the economy, beer held its own vs. spirits and wine at the height of the recession…why should it decline now?

Could it be the growth at the top and bottom of the beer market? Craft beers and imports are doing okay as are the price brands. Bud Light and Miller Lite are hurting and that’s enough to upset the entire category.

Maybe after a few years of substituting beer for wine and spirits, consumers have returned to pre-recession consumption patterns.

My view is that the marketplace is cluttered with light beers including new entries such as MGD 64 and Budweiser Select 55. Adding to the clutter is a barrage of new products, line extensions, brand extensions at all price tiers, especially the top end. And, let’s not forget about the growth in craft beers.

So, maybe it’s just that consumers are drinking less but drinking better. Those of us in the spirits world know that phenomenon well.