Booze Business | A blog dedicated to the business of spirits and wine

Fast Food and Alcohol

July 5, 2011 3 Comments

The news that fast-food chains are selling alcohol sent me scurrying to the Internet to gauge the reaction among the public and pundits. After all, “demon rum” could be polluting the American haute cuisine realm and worse, is Ronald McDonald going to turn into a boozer? Will people fear that a McBeer will replace a shake? Do you typically pair your Whopper with a nice lager or with a zinfandel?

According to USA Today (and reprinted by Mark Brown’s newsletter), Burger King and Sonic will join Pizza Hut and Starbuck’s in offering alcoholic beverages along with fast food. Clearly, the move into alcohol is designed to compete with casual dining chains and to increase the cash register ring.

So, my Internet journey revealed mainly neutral to favorable reactions plus some interesting insights.

A number of blog postings (Chowhound, for example) referenced the differences between American and European attitudes toward alcohol, such as:

“There is a simple cultural difference between the US and the far more relaxed attitude many Europeans have towards beer. We seem to think that we need to regulate alcohol wherever we can, Europeans seem to think that adults are generally capable of making the right decision without the state telling them what to do.”

The gourmets also waded (or is it weighted) in:

“I would very much like a glass of Sangiovese with a Baracoa plate at Chipotle, or a Gewurtz with some good Tacos Al Pastor.”

I found this interesting item about Louisiana:

“…Not only drive-thru daiquiris, but doughnut shops with liquor licenses, too. Video poker is legal in Louisiana, but to get a gaming license, the operator has to have a liquor license (logically, if you check IDs for alcohol, you’ll check them for video poker). So damn near every corner cafe, sandwich shop, po’boy joint, doughnut and coffee place, serves alcohol and has video poker.”

Finally, the doom and gloom, anti-alcohol folks had their say: “Fast food plus fast alcohol equals fast drunks.” That’s obviously from someone who has never experienced the therapeutic benefit of a burger and fries at the end of the night or the day after.

Malibu Rum

June 24, 2011 6 Comments

Seems as though everywhere you go in NYC, you run into an ad for Malibu Black. It’s a new entry that according to the owners seeks to combine the smooth coconut flavor that you love with higher proof and less sweetness for a bolder taste of the Caribbean.

Translation: We’ve been watching the Flavored Rum category and finally noticed that Sailor Jerry was changing the Rum game so we thought we would follow along.

In fact, higher-proof, dark and spiced Rums are doing well. According to Shanken News Daily, Sailor Jerry (92 proof) grew by 59% in 2010 to 635,000 cases. The team that invented it now runs Proximo and their recent entry, Kraken (94 proof) sold 75,000 cases in its first year. The other three or four new entries in this sub-category are still trying to gain traction.

A few observations:

Seems to me, the 6 million case gorilla known as Captain Morgan, is stuck at the dock (including the 100 proof entry) while the flotilla sails off. Admiral Nelson and others are growing at the expense of the base brand and the line extensions don’t seem to be helping. Someone needs to walk the plank.

Malibu Black? Higher proof at 70? It’s still a coconut Rum without an image likely to appeal to the Sailor Jerry or Kraken drinker. Can’t you just hear the conversation leading up to the launch – “let’s make a dark rum, up the proof a bit and call it Black… a sure winner…well gotta run, don’t want to miss the 5:40.”

I had a number of conversations with James Espey about Malibu over the years. James, along with Tom Jago and Peter Fleck, created the brand. (Currently they also are the owners of Last Drop Distillers Limited.)

James has written an interesting article called The True Story of Malibu. The article raises some interesting concepts on the creation of Malibu that are still applicable to the brand and new entries in general. (Send me an email or hit the comment box if you’d like a copy.)

James points out that Malibu succeeded because the product innovation was bold and outside the box. That was facilitated by an entrepreneurial spirit and effort that managed to overcome corporate obstacles. Above all, instinct and tenacity were key elements rather than studying the concept to death.

These elements apply to Sailor Jerry and to Kraken, in my view. Which helps to explain why the spirits industry giants are better at buying new brands than creating them.