Crown Royal

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.

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Organic Booze

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.”

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Beer Market Woes

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.

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