just the Answer - Mike Isaac, global marketing director Southern Comfort
Southern Comfort, which is inextricably linked with New Orleans, has sat in Brown-Forman's stable for over 30 years now, and has been the recent subject of a makeover. In this month's just the Answer, Olly Wehring talks to the brand's global marketing director about past performance, future opportunities and the danger of over-extending.
just-drinks: Brown-Forman's spirits portfolio is dominated by two brands – Jack Daniel's and Southern Comfort. How do the two sit together?
Mike Isaac: I don't suppose it's much of a secret that Jack Daniel's is the larger brand – I believe it's still one of the top five spirits brands in the world. Southern Comfort is a smaller brand that still fills a vital role within the company. When we purchased the brand in 1979, it was our lead entrant into many markets outside the US. Southern Comfort had a more established international distribution which Jack Daniel's was able to leverage. So, there's still a vital strategic importance for Southern Comfort within the company.
j-d: Many companies talk of smaller brands piggy-backing on larger brands' shoulders into some markets, but it sounds like it's the other way around for Brown-Forman. Is that fair?
MI: Historically, that was true. Conversations within Brown-Forman tend to take a longer time-horizon than many other packaged goods companies. It's been around since 1870, so when we refer to an event in Southern Comfort's history that was 40 years ago, it seems that it was in the recent past. Jack Daniel's today is probably more the lead dog into more international markets, but then the world has changed quite a bit in the last 40 years – it's become flatter and more open.
j-d:What are the main markets for Southern Comfort?
MI: The US, the UK, Australia, South Africa, Germany and Greece. The US accounts for a significant majority percentage of Southern Comfort's performance.
j-d: And which markets offer potential for the brand?
MI: Most brands look to Asia as an obvious area to expand into. China offers impressive early volume performance, but the profitability from that volume is somewhat questionable. So, I don't necessarily pine for that opportunity for Southern Comfort. Instead, I'm looking at the potential within our established footprint. With changes like new packaging and line extensions, those are bigger short-term opportunities than any major geographic expansion at this point.
j-d: In March, Brown-Forman's results for the first nine months of its fiscal year did flag up some sales declines for Southern Comfort. Why?
MI: Southern Comfort is a brand that has needed a refresh of the story that we tell to the trade and the consumer. There hasn't been a lot of news for us to share – that lack of news has informed a lot of work that we've done around the brand. That said, I think we're seeing the business strengthening in certain pockets in recent months. Seeing the business firm up just as a lot of new changes are hitting the market makes us very optimistic going forward.
j-d: So, the recession is over?
MI: That certainly helps. A rising tide is going to lift all ships, as the cliché goes. Inevitably, there are a lot of moving pieces to this – the strengthening economic situation is a factor, although having a brand that's been retooled to compete where our consumers are spending more time – particularly online – is a story we're becoming more capable of telling.
The new look for Southern Comfort was unveiled by Brown-Forman in April
This is a brand that's been around since 1874, it's a unique product with so many different storylines we could tell consumers. I think we're becoming more aligned and more adept at telling that story, and that's helping us as much as the economy is improving.
j-d: taking a slightly different look at where your consumers are spending more time – is the growth of ready-to-serve – a sub-category that Southern Comfort is pretty active in - related to the shift away from the on- to the off-trade in your markets?
MI: There is a longer-term trend to the off-premise across the category. We want to make sure that we have very competitive and compelling offerings to give consumers in that channel. That said, the on-trade is always going to be important for recruiting LDA (legal drinking age) to 29-year-old cohorts. This is typically where their first encounter with our product will be, so the importance of that never goes away. But, it makes sense - for Southern Comfort particularly - that we have a broader offering for them in the off-trade.
j-d: When it comes to brand extensions, is this innovation or is it more that drinks companies are looking to cover all taste bases?
I don't know that they're mutually exclusive. From a taste perspective, Southern Comfort is at the core of all our brand extensions. It's been around for a long time, so there are obviously many things going right with it to be able to sustain numerous extensions. While they can hit certain flavour bases, I think you have to be mindful that you're hitting the right occasions as well. We don't extend with the intention of getting a few short commercial wins and not having a robust product for the long term. Take a look at Southern Comfort with lime – that's how LDA to 29 consumers in the US have encountered the product. With that equity already there, we've looked to make the perfect serve of the combination. I would certainly classify that as innovation, but I also think you have to do it within the constraints of what the brand can sustain and what consumers are looking for.
j-d: What was the thinking behind the packaging revamp earlier this year?
MI: We wanted to contemporise the brand in a way that still felt like it belonged to Southern Comfort, and reassert the brand's relationship with New Orleans, where it was born. I think the new packaging works a lot harder to tell that story.
The first management briefing of 2011, brought to you by Euromonitor, looks at what this year will bring for the global drinks industry. Ahead of this, just-drinks looks back to look forward: Our brie...
In this, the final part of just-drinks' review of 2010, Olly Wehring takes a look at what made the wine headlines this year....
- Craft spirits shake-out will be just the beginning
- How Treasury is rewriting the rule book - Comment
- Drinkable yogurt - The next drinks opportunity
- Has Diet Coke passed its sell-by date? - Comment
- Coca-Cola India suspends bottling operations
- Diageo brands need "fixing and nurturing" - TWE
- SAB shareholders granted AB InBev vote split
- This week in wine & spirits on just-drinks
- Spirits volumes slide in Global Travel Retail
- Pernod Ricard wins Ron Matusalem 'Cuba' legal row
- The Next Seven Big Beverage Markets
- Global rum insights - market forecasts, product innovation and consumer trends
- Carlsberg AS (CARL B) - Financial and Strategic SWOT Analysis Review
- Global RTD insights - market forecasts, product innovation and consumer trends
- Adultifying Soft Drinks; Capitalizing on rising adult demand for non-alcoholic beverages