Seagram and Vodka

Until the “acquisition” of Absolut, Seagram was not just a vodka-less company; it was an Ostrich hiding its head in whiskey pretending not to see the world of booze change.

Sam Bronfman’s aversion/reluctance to sell vodka is widely known. Perhaps for him, liquor needed to be aged or brown or have the word whiskey on the bottle. Whatever his reasons, the company was never a vodka player. In fact, when I was in market research, one of the older executives told me the story of how Mr. Sam reacted to a research project about changing consumer alcohol tastes. It may be apocryphal but it sure has the ring of truth.

One of the most notable researchers of the 50s and 60s, Alfred Politz, was an early leader in the techniques of polling and opinion analysis. He was commissioned to do a study of changing consumer alcohol tastes and attitudes. The presentation of the findings took place at an executive retreat and, in an unusual display of bonhomie, Mr. Sam suggested they review the results while sitting around the pool.

Page after page of the report pointed to the potential rise of vodka at the expense of whiskies. Politz was said to have been very clear that the evidence overwhelmingly leaned in this direction. It was also clear that Mr. Sam was getting angrier and angrier. Finally, he got up from his chaise, grabbed the report out of the researcher’s hands, threw it in the pool, muttered some obscenity and stormed off. Politz was said to have been relieved not to join his report.

So while competitors were developing Smirnoff, Popov, Stolichnaya and other brands, Seagram was struggling with entries like Wolfschmidt, Nikolai and Crown Russe.

Finally, someone decided to create a new vodka brand but, unlike most of those on the market at the time, it was to be imported vodka. In fact it was called Seagram Imported Vodka or SIV, as it was lovingly referred to. Imported all the way from Canada.

Management at the time knew that the “white goods” race was passing Seagram by and the pressure to succeed was very strong. So much so that when a presentation to a major California chain was set up to expand distribution, the “brass” decided to attend.

Picture this, a president, an owner, the head of marketing, the head of sales, brand managers…all fly off in the company plane to attend this meeting on SIV. They get to LA early with time to kill before the meeting. Since a few of them had never seen the inside of a chain store liquor department, they decide to visit a few stores.

Next thing you know there are 4 or 5 suits walking the aisles checking the shelves and watching consumers make decisions and purchases. They’re paying particular attention to the vodka section and spot a man looking at the brands and seemingly trying to make a decision.  A member of the entourage goes up to him, takes a bottle of SIV off the shelf, hands it to the man and says, “check this one…it’s imported.”

The man studies the bottle for a moment or two looks at the exec and, as he puts it back on the shelf says, “that’s not imported, it’s Seagram.

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The Inventor

Maurice Kanbar is among a select group of entrepreneurs who have changed the spirits industry. And, he’s still at it.

Like my earlier posting about David van de Velde, Maurice is another visionary businessman who has spent a lifetime on finding a hole and filling it. Maurice has been inventing, designing and developing a host of products ranging from films and how we watch them, to surgical instruments, to things, that when we see them, we say “now why didn’t I think of that?” The man has thirty patents and products to his credit.

I first met him in the early days of Skyy Spirits when I was sent on a fool’s errand to see if he would be willing to chat about an acquisition. This was in the late 1990s and the brand was just starting its ascendency. We were feeling the effects of its growth and one of the geniuses in Sweden thought we might be able to “buy him out.” After just a few minutes of chatting, he asked the key question – why sell while the brand is still growing. Duh. Sure got my respect.

But what I really admire about him is his judgment and intuition balanced by the tenacity of an inventive mind.

Examples:

He complains to a doctor friend that he gets headaches and a hangover from Cognac. His friend explains about congeners and tells him to drink vodka. The next thing that happens, he studies the world of spirits, makes advancements to the distillation and filtering systems and creates Skyy Vodka.

At the time, no one in the food or beverage business used blue for packaging – don’t ask me why…I once got my butt chewed for presenting a new product in blue packaging. Maurice didn’t let this narrow, stay in the box thinking confine him. I don’t know for sure, but I suppose he was thinking Skyy = blue. Another duh.

When his brand starts growing, he’s smart enough to surround himself with people who know the business like Foglio and Ruvo.

So he’s an interesting guy, to say the least.

His newest effort is Blue Angel Vodka, which he says is based on further advancements in distillation that produces an ultra smooth product. But the really cool part about it, in my opinion, is that the inventor has further increased his marketing skills. First, his signature drink is the Blue Angel Martini (BAM as he calls it) made with blue curacao. Also, I like his tongue-in-cheek slogan – “the world’s second best vodka; we’re still looking for the best.”

On second thought maybe he should stick to inventing.

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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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