Smirnoff aims for Bacardi’s crown
In one of the most radical overhauls of a leading drinks brand in years, Diageo unveiled the new-look Smirnoff last week. Chris Brook-Carter reviews the design and asks why the company is tinkering with a recipe that has brought so much success?
With over 17m cases sold of the core brand last year, 1.8 billion bottles of its spin-off ready-to-drink brand shifted, 6% volume growth and 8% net sales growth, Smirnoff vodka is one of the drinks industry's most successful spirits brands of all time. Its packaging, marketing and overall brand strategy have been a recipe for success and as a result it is one of only a handful of brands every drinks company wishes it owned. If ever there was a case for the "if it ain't broke, don't fix it" cliché, Smirnoff is surely it.
And yet last week, owner Diageo unveiled a relaunch for Smirnoff that will span its entire product range and include new packaging, new advertising and an overhaul of its marketing. And neither is this the kind of tweaking the brand underwent some four years ago, when it attempted to differentiate itself from copycat brands, this is a significant makeover.
"The re-launch is at a time when Smirnoff is at its strongest position in its history," says Andy Fennell, president of global marketing Smirnoff. "I can't think of another consumer brand of this size that has delivered growth of this level."
The announcement has sparked some speculation in the press that Smirnoff has been concerned by the continued growth of the super premium end of the vodka category, which has been eating into its overall market share. According to research by Deutsche Bank, the brand's market share by volume has slid to 32% from 50% in 1990.
However, it is a theory Fennell dismisses. "That is not the big story," he says. "If we have a foe its Bacardi."
Diageo announced last year that it wished to claim the number one spot off Bacardi which has been the world's largest global spirits brand for years now. Now it is hoped that this re-launch, which will include a 50% increase on the global marketing spend, including US$157m in the US alone, will do just that.
"In two years' time Smirnoff is predicted to overtake Bacardi overall in volume sales when including ready-to-drink products," Fennell said.
The new packaging certainly hints that Bacardi and not Grey Goose or any of its super-premium vodka brethren is the target. Out is the classical, understated design that has become associated with top-end vodkas; in is a more brash and contemporary look. The bottle is tapered at the top, while the label is a bold, red and silver attempt to mix traditional Russian values with a more modern image. Anchoring it is the new Smirnoff logo - something you can be sure we will be seeing a lot of - which is a double-headed eagle that apparently takes its inspiration from awards handed to the original owner Pierre Smirnoff in the late-1880s.
"We updated our look to make a bold, contemporary statement about our category leadership and quality product. Our extensive research reveals that consumers associate the new packaging with a stylish brand and a good quality vodka and we're delighted to satisfy consumer interest in distinctive, modern packaging at the same time."
In short, this is a brand aimed at the clubbing generation rather than the purveyors of the top end style bars, where Grey Goose, Belvedere and the like hold sway. And certainly it is a design that will transfuse well into Smirnoff's range of RTD brands, including Smirnoff Ice and Black Ice, when the new design is rolled out across the portfolio.
The company's marketing activity will support this drive. Besides the television ads, which admittedly promote a more premium image by encouraging drinkers to "try the award-winning Smirnoff - neat" - a concept more generally associated with super-premium brands - a good deal of the focus will be on the Smirnoff Experience.
The Smirnoff Experiences are dance events hosted by the brand around the world. So far they have been held in 23 countries, although this number will reach 30 by the end of the year. "Along with our packaging and advertising, these events are just one more way we're keeping the brands fresh and relevant to consumers," says Fennell.
The Coors Brewers' brand Carling has launched a similar initiative in the UK. "These types of events are likely to become increasingly popular methods of event marketing. Simple sponsorship often fails to provide brands with significant results and do not always guarantee increased brand awareness," says the industry analyst Datamonitor.
By creating its own events, rather than sponsoring someone else's, Diageo hopes to build stronger emotional bonds with consumers by being the source of the entertainment and benefit provided to the consumer.
Though the focus of the news has for once shifted away from the Smirnoff RTD products and back onto the parent brand, the likes of Smirnoff Ice and Black Ice remain integral to the overall strategy. The new design will be rolled out in the RTD range in February and March next year. And the company is currently testing its latest spin-off, a Smirnoff Twist RTD, which is available in about 15% of the US, primarily in the Northeast.
After a difficult year in the US, where the brand had declined 17%, Fennell says Smirnoff's RTDs returned to growth during July and August, with the help of the launch of Smirnoff Black Ice. "We were very focused on growing the (RTD) concept and slow in renovating in core market. You want to renovate when it's got great momentum, something we didn't do with Ice," admits Fennell.
Renovating on the back of momentum is certainly something Diageo has done with the parent brand now. And it will now hope that momentum will gather the pace it will need to topple Bacardi from the top spot.
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