Comment - Spirits - Nurturing All the Way to the Bank
These days, mergers and acquisitions appear to be the main ways to own a big spirits brand. Patience Gould, for one, misses the days of building a brand from scratch. Is nurture no more?
So, while the French multi-national can celebrate the extraordinary success of Jameson, it has taken over 20 years of consistent marketing and above-the-line support to give the brand the momentum it enjoys today. Currently, Jameson’s annual case tally is now nudging 4m with an impressive gain just a tad over 19% last year, compared to 2010.
On its shoulders rests the renaissance of the Irish whiskey industry.
You may, however, be asking, so what? Well, it’s just a thought, but has Diageo got the patience to do likewise with Bushmills, which the multinational acquired from Pernod for GBP200m back in 2005. Off the top of my hair-do, I cannot think of a single brand which Diageo has nurtured to such success, aside from Johnnie Walker and Smirnoff. But, more of those two later.
In fact, it’s easier to think of ones that have gone the way of old flesh - Gordon’s springs to mind, so too Pimm’s - but for some that may be a moot point.
To be fair, Gordon’s downturn had started prior to the formation of Diageo, when the then United Distillers & Vintners sanctioned reducing its strength from 40% to the current 37.5% abv. In short, Gordon’s could no longer claim to be “the heart of a good cocktail”, which was once the proud boast on its label, and in today’s super-premium gin environment, Gordon’s cannot hold a candle.
But I digress.
So, what’s been happening at Bushmills since Diageo acquired both brand and distillery? Well production capacity has been substantially increased, doubled in fact, the 400th anniversary passed by, a few sponsorships have been announced – like the Irish Open – and most recently Diageo jumped on the flavoured whisky bandwagon with the launch of Bushmills Irish Honey.
Meanwhile, in the rival camp, Irish Distillers PR is ramping up its offering at the super premium end of the market. Already leading the Single Pot Still Irish whiskey sector with its Redbreast duo, it is extending its range with the launch of Yellow Spot – a ‘brew’ which weighs in at 46% abv, carries a price tag of EUR65 (US$81), and which joins Green Spot. Yellow Spot is a 12-year-old whiskey which has been matured in three different wood types: Bourbon, Sherry Butt and, intriguingly, Malaga casks.
All of which not only underlines the company’s commitment to the Irish whiskey category, but also signals its intention to introduce a new single pot still expression every year.
Please note; no flavoured line extension here. No, this activity is all designed to enhance the value of its Irish whiskey offering, which gives its flagship Jameson an enviable quality image halo much in the same way as single malt Scotch whiskies do for blends.
So, can Diageo ‘nurture’ a brand? Well it has to be said it’s done phenomenally well with Johnnie Walker – now incredibly an 18m-case Scotch whisky brand, and also with Smirnoff, which is a few hundred thousand cases shy of the 25m mark. But, this is hardly brand-nurturing. Certainly in the case of Smirnoff it’s a question of mass marketing and having the necessary funds to support the cause.
In a very different way, it’s much the same for Johnnie Walker – though this is a range which now boasts six core Labels, Red, Black, Double Black, Blue, the newly-added Gold Label Reserve and Platinum Label 18 Year Old, which does stretch brand credibility, just a tad.
Furthermore, it’s also worth pointing out that Johnnie Walker’s international credibility had already been established by Red Label together with Black and that was back in the days of the old Distillers Company.
In short, it was there for Diageo to build on, there was no nurturing needed here.
Hats off the Sunday Telegraph for breaking the story today (9 December) that Diageo has been sniffing around Beam Inc....
- Remy, dead cats and the power of China's new year
- just the Facts - Top 20 US Beers by Value, Volume
- Will Lucas Bols' IPO Bring Much-Needed Stability?
- Editor's Viewpoint – What I've Learnt About Chile
- Price drops would damage our DNA - Remy Cointreau
- Diageo speaks out over supplier contract changes
- Maxxium UK head to depart for Edrington role
- Brown-Forman appoints Jack Daniel's president
- Diageo inks UK distribution deals
- Diageo's United Spirits stays in red in YTD
- Global RTD/RTS insights - market forecasts, product innovation and consumer trends research
- Global vodka insights - market forecasts, product innovation and consumer trends research
- Edrington Group in Spirits (World)
- Global Consumer Trends and Key Consumer Targets in Alcoholic Beverages
- Diageo plc (DGE) - Financial and Strategic SWOT Analysis Review