Just the Answer - Steven J. Garcia Perez
Independent UK drinks producer, Global Brands, the company behind the Vodka Kick (VK) ready-to-drink brand, has grown rapidly whilst competing with the giants of the sector, Diageo and Bacardi. In this month's Just the Answer, Global Brands' managing director, Steven J. Garcia Perez, discusses VK's success and his company's move into the shots market.
J-D: How has Global Brands made Vodka Kick successful in the face of competition from Smirnoff Ice, Bacardi Breezer and WKD?
Perez: Well, rather than do mainstream advertising we have done a lot of targeted stuff. We have done perimeter advertising at football grounds, we have sponsored football teams and also sponsored motorsport and rallying. But most of our work is done with on-trade in-premise support. We have a double-decker bus that goes around pubs and clubs and a truck decked out in VK gear.
It used to be that you could advertise on TV and hit exactly the people you wanted but now there are so many channels that it is much harder. But we know where 100% of our target market is going to be. They will be out in pubs and clubs on a Friday and Saturday night. So we help the owners get people into their premises and hopefully then they will buy our drinks.
J-D: Is this strategy based on your own experience working in the trade?
Perez: It's definitely something I think is important having been in the pub and club trade myself. It used to frustrate me that a company would spend millions on TV advertising but I couldn't even get a T-shirt out of them for on-trade promotion.
J-D: How do you think the major drinks companies view Global Brands?
Perez: I think there is some admiration for what we have done. What we have done is establish ourselves in the fastest growing sector in the market with the stiffest competition in the world.
J-D: Is the RTD phenomenon just a fad that consumers will grow out of?
Perez: I don't think it is the case that people will mature and grow out of RTDs. Instead I think they will expand their repertoire and I think we are already seeing that happening. One night they may drink beer or wine, another RTDs.
J-D: What do you think will happen to the RTD market?
Perez: I have always said there will be a gradual dilution in sales. They will hit a peak and start to decline, which is exactly what we saw in the imported beer market. There were initially 20 or 30 types of beer available but that market polarised and there are now much fewer. These things go in phases but there is no way that RTDs will be here today and gone tomorrow.
J-D: Will Vodka Kick survive if the RTD market contracts?
Perez: I think we have already got down to the brands that are likely to survive: us, WKD, Bacardi, Smirnoff and possibly Reef. Really that's it now. If you look behind a bar, that is what they are stocking and rarely anything else. Our product is well priced to survive even if sales are down.
J-D: What about overseas markets?
Perez: The RTD market has really been developed in the UK. It has been a great British success story and we are seeing other markets growing. We sell to 36 countries, mostly in Europe but also Mexico and China and we see this as a big opportunity. However, governments like those in France and Germany use protectionist policies and punitive tax regimes to keep us out because they are afraid of the effect on their beer and wine industries. We in the UK let in French wine and German beer and I don't see why they should be allowed to keep our RTDs out. We are working with the other major producers on these issues.
J-D: Global Brands has also moved into the shooters market. How is this progressing?
Perez: We are selling 200,000 cases of shooters a month and are by far the fastest growing brand in the market. We are also developing a very healthy export market and last month we sold about four million shots.
J-D: Why are young people attracted to this sort of product?
Perez: It's a social thing. It's a ritual but they also get to try different flavoured products.
J-D: There has been criticism of the shots sold by companies like yours because they encourage young consumers to drink to excess. Do you agree?
Perez: Unlike what the popular press says, shots have been around for years but now they are just under a different disguise. It's really a liqueur. People used to drink Tia Maria and Drambuie like this but now they are drinking our shots.
J-D: Do you think it encourages binge drinking?
Perez: People don't knock back these shots as fast as they can, people do sit and sip them. These drinks have nothing to do with drinking as much alcohol as possible as they are not the cheapest way to get drunk. Also they are not as strong as people think, they are more like 20% alcohol rather than 40%.
J-D: The British government is very concerned about binge drinking and might look to ban shots. What is your view on this?
Perez: If the government were to outlaw shots all that would happen would be people would drink more beer.
J-D: What's next for Global Brands?
Perez: There are lots of companies that think they have to have lots and lots of products in the hope that one is successful but I want to be more selective. I'd like to add a beer to the range. You have to have a heritage to make beer work so I'd be interested in an agency agreement.
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