Lessons in marketing from German bankers?
By Ted Wright August 13, 2009
Some folks at Deutsche Bank say that premiumization in the liquor business is dead. What’s next, finance tips from someone’s Creative Director? All joking aside we don’t see the era of anything being over. In tough times the stupid and ridiculous get weeded out. Ed McMahon’s premium vodka and silly flavored rums are probably not a good bet now but then they never were in the first place. There was just so much froth in the market that they could get launched and would live a little while before dying.
WHICH SELLS MORE? THE ONE THAT CONSUMERS TALK ABOUT.
The long term data shows that quality sells – Tito’s, VeeV, Hirsch bourbon, Bluecoat gin – and BS smells. People buy brands that are worth talking about. Right now people are talking about value so brands that over deliver on the category promise are growing. Those that don’t, won’t. A quick look through the recent IRI data analysis provided below by WSD proves the point that brands with stories passed on by word of mouth are growing. Those that don’t are not.
VODKA. Smirnoff, Absolut and Skyy together represent about 30% volume share of the category and for most part are holding steady in the four weeks to June 14. In terms of volume, Smirnoff grew 0.1%, Absolut grew 2.5% and Skyy grew 2.7%. Interestingly, Absolut showed much improvement from its 52-week numbers (with volumes down -8%), while Skyy was much stronger in the 52-weeks (up 17.1%). In recent years Grey Goose was a force to be reckoned with. However, volumes in the four weeks declined -5.2% and -5.9% in the 52-weeks.
RUM. Bacardi, Captain Morgan and Malibu all took hits in the four week period, with Bacardi declining the most, down -7.5%. Captain Morgan fell -4% and Malibu Rum declined -1.1%.
WHISKEY. Despite the assumption that Bourbon is doing especially well in the recession, Jack Daniel’s declined -8.1% in the four weeks, while Jim Beam fell -10.8% and Maker’s Mark was down -6.2%. It’s notable, though, that Maker’s Mark performed much stronger during the 52-weeks (+4.5%), while Jack gained 0.1%. Jim Beam, however, declined -7.4% in the year period.
Canadian Whiskey’s darlings in the U.S., Crown Royal and Black Velvet, also had a rough 4-weeks, with both declining -4.5% in volume.
Johnnie Walker Blended Scotch showed volume increases of 5.7% in the four weeks but only 0.7% in the 52-weeks. Dewar’s declined -5.1% in the month but grew 9.1% in the year. And finally, Clan Macgregor Blended Scotch grew 1.2% in the four weeks and 3.9% in the year.
Jameson Irish Whisky continues to grow amid the recession, with volumes in the four weeks up 21%, slowing from the 52-week results (30.7%).
TEQUILA. Mega-brand Jose Cuervo declined -3.3% in the four weeks but gained 3.1% in volume in the 52-weeks. Sauza, meanwhile, declined -0.2% in the four weeks and -0.6% in the 52 weeks. Lastly, Patron grew above and beyond the latter two, up 11.3% in the four weeks and 14.1% in the 52-weeks.
GIN. The top three representatives from the gin category declined in the four weeks but we’re not too surprised given that gin has had problems mounting a resurgence in recent years. Tanqueray was down -6.6% in the month, followed by Seagrams (-0.6%) and Bombay Gin (-13.9%).