Why are we still talking about Vodka? There's so much else going on. Pernod's profits are roaring, whiskey demand is soaring, and pundits are proclaiming a new Restoration—not, like the old one, the return of the Stuart's to the throne of England but the resurrection of Gin. Poor Gin! How many comeback predictions has it had to endure as Vodka replaced it as the essential ingredient of the "classic" Martini? The theory this time is that making Gin with truffles or red algae or rhubarb, etc. is somehow like saying abracadabra.
What started the train of thought for this column was a story in the Wall Street Journal about a week and a half ago that seemed to bemoan the impact of sluggish sales of certain brands of Vodka on the earning of giants like Diageo and Pernod. Admittedly this is a headache if your bonus is tied to sales growth for mega-brands Smirnoff or Absolut. And then there's old favorite Stolichnaya, fighting to move cases while traveling to an uncertain future in its litigation over trademark infringement.
Don't cry yet, though, for any of the Vodka giants who have been shedding enough tears for themselves. Yes, there has been some slippage this year among the once great ones, at least globally. But we think U.S. volumes have held up remarkably well in a truly transformative market. Here's a selection of brands that not that long ago felt justified in claiming bragging rights for the category. |
The real point we want to make, however, is that sometimes we allow non-essential trends to fog our thinking taking our focus off the bigger picture. That's where spending time with a large consumption database such as Beverage Marketing Corporation's DrinkTell™ can help clear the cobwebs. We interviewed a former Allied Domecq marketing executive a couple of days ago for a consulting assignment we're working on. He couldn't stop talking about the fact that the industry that many of today's executives grew up in is now buried in the sands of time. Too many think, at least subconsciously that there is a way to return to the past.
The way he explained it was simple—think in terms of brand and category life cycles, he said. Brands get old, they lose the specific audience that they appealed to and the identity that they projected. Look around you. The old brands (and old categories) are suffering. Think Jager or Absolut, uncertain about how to position themselves. Think Bacardi and the days when Bacardi wasn't a brand but the name of a beverage. Does anyone remember when all the kids were shooting Schnapps? Twenty years ago you could build a rainbow-colored pyramid of shot glasses on the bar with all the brands. In the new world our largest demographic cohort, Millennials, are drinking wine. Wine!
Critically, brands today are no longer built on-premise. The hand sell is too expensive. So, modest brands like Svedka (and New Amsterdam), properly positioned, strategically priced, can shoot to prominence. Distributors, although more consolidated than in the past, have abandoned the brand building business. We'll offer your brand for sale, they say—but you build the brand yourself. We'll just write the orders. New products break in with new and often more specialized positioning than the old ones did. "American" is a theme that sells. It's certainly helped sell Tito's not to mention the craft movement—both beer and spirits.
The upshot of what we heard from our informant? The marketplace we operate in is really brand new every day. No matter the brand builder's brilliance there is no way to dam the river of change. But there is a corrective lens to clear the boiling mist from the most important changes. We think that lens is a database like DrinkTell™. For questions about this column or to look at our DrinkTell™ database yourself just give us a call. To order a BMC U.S. Wine, Beer, or Spirits Guide, 2017 edition, click below. |
