How small is the market?

I’m always struck by the size of the spirits category and small number of dedicated drinkers of a particular brand. (Based on US Census and Gallup’s annual survey.)

Let’s do some math (or trust me and skip ahead to the fact that there are ‘only’ 24 million core spirits drinkers)…

  • US population over 21 is around 200 million.
  • 60% of those over 21 drink alcohol at least occasionally, 120 million people.
  • People who drink spirits most often (as opposed to wine or beer) are about 20% of those who drink alcohol. So now we’re down to 24 million spirits drinkers.

(Actually the overall number who drinks spirits is much higher; perhaps 80% of alcohol drinkers or close to 100 million. But I’m focusing on most often, the core of the market.)

The size of the core market at 24 million people can be seen as huge or small depending on your perspective.

If half these drinkers consume Vodka, that’s 12 million people. But, if a brand has a 25% share, the size of the ‘franchise’ is only 3 million consumers.  (The numbers get smaller as you get into different categories.)

What this has always meant to me is, in addition to or perhaps in place of mass media, marketers need to think in terms of ‘a rifle not a shotgun’. Maybe even with a telescopic lens.

Whether aiming at increasing brand loyalty or converting users of competitive brands, it’s all about the return on investment. Efforts such as relationship building programs, digital marketing, database marketing and point of sale programs, to name a few.

Just like the old expression – fish where the fish are… but with a rod and reel not a net.

I bet you knew that.

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No extra charge

Gregg Mineo sent me the following story about Sabra Liqueur. It was originally developed and introduced in 1963 by  Edgar Sr. Currently it’s produced by Carmel wineries, I believe.

Back in the days of the Seagram Empire, before the industry centralized and contracted, there were small companies like Park Avenue Imports.  They sold cordials and niche products like Vandermint, Cherry Suisse and, of course, the inimitable Sabra.

Sabra was a quality product, made from Jaffa oranges and Swiss chocolate.  It was packaged in a unique bottle similar to a Genie bottle, but unfortunately didn’t have a long shelf life.  I think in my early days of sampling Sabra, I gave more away than I sold.  It was a hit in assisted living care facilities, and of course Miami.

Well, as the story goes, one of the established retailers in Miami started selling Sabra at a brisk pace, and developed a loyal following, especially with a particular gentleman who was buying a bottle once a month.  He began buying it before the brand took off in this store, and one day came back to return one of the bottles he purchased.  He complained that this bottle of Sabra was not the same product he was used to, that it lacked something special he really enjoyed.

The retailer asked what the difference was, and the customer responded that “it didn’t have the chocolate bits in it.”

Stifling a laugh, the retailer offered him something else; all the while knowing that the bottles of Sabra the customer was used to had passed the expected shelf life. Obviously, the customer didn’t care.

What I want to know is — were the chocolate bits available at no extra charge?

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Where’s the alcohol section?

The late Bob Dubin once told me a story about the folks he had to deal with at Allied Domecq.

It seems they weren’t very happy with the way their brands were being run in the States (New York in particular) and one of their top ranking marketing people was coming over for a series of meetings to get to the reasons behind the poor performance.

A senior member of the NY sales team met the executive at the airport when he came through customs. He ushered him to his car and told him that the plan for the first day was to bring him to the hotel, get settled and then they would tour the market.

“I hope to see stores as they really are and not have one of your set up visits,” said the marketing guy. To which the sales person replied, “any store you like…you’re staying in Manhattan so lets start there. You choose.”

A few minutes went by and the visitor exclaimed that he needed to go to a drug store right away. “Please find one close by.”

Thinking that he must have had a headache or some other physical ailment from the flight, the salesman pulled off the expressway and stopped at the first drug chain store he saw.

He was gone for about 10 minutes then came storming out, got back in the car and complained loudly and bitterly that he had looked all over the store and couldn’t find any of their brands.

The salesman patiently explained that in NY, the sale of alcohol was not allowed in drugstores.

“But it is allowed in other states isn’t it?”

“Yes, in a few states” said the salesman.

“So, if you and your associates weren’t so damn lazy, you’d get the law changed, wouldn’t you?”

The salesman didn’t bother to explain.

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