The beverage business blog from Olly Wehring
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Formula 1 Feedback
08 Feb 2006 12:37
Prior to last week’s missive from Paris, you may recall I voiced my confusion over the trifling matter of alcoholic drinks companies sponsoring Formula 1 teams. To recap, I asked for your opinions on what I felt was a grey area.
Well, talk about stirring up a hornets’ nest. Here are just some of the comments you wrote in with:
“Surely the point about the use of alcohol, or any other product, is about using it in a manner that shows responsibility to one’s own wellbeing and that of others. There is no harm in a racing driver or any other driver relaxing with a drink or two, provided they respect the old ‘eight hours from bottle to throttle’ rule.
“As you say, it’s all very complex and down to personal choices and values. The drinks industry should actively encourage responsible drinking but should not beat itself up if, despite this, its products are misused by a minority. This misuse is part of much broader set of issues about our society and the attitudes that exist within it.”
“I’m really surprised at Diageo because it has always tried to keep to both the spirit and the letter of the law. To align Johnnie Walker with F1 seems counter-intuitive. It’s because government ‘faceless-bureaucrat-out-of-touch-with-consumer-type’ campaigns don’t usually work, that industries, which do have an influence in the sphere of responsible drinking and driving - especially ones with strong, desirable imagery such as JW - should put out clear, uncompromising messages on the issue. To me, it’s a black and white case.”
“Many years ago, I was in charge of marketing communications for Seagram Distillers and every year I turned down requests for sponsorship of fast-moving automobiles. The philosophy then was that alcohol and fast driving don’t go well together. One accident to that car and the headlines will roar ‘Alcohol speedster crashes’. In those days it was a given that regardless of the audience and broader coverage than just the race, it’s not the right place to promote a distilled spirit brand.
“When did that change in the hunt for increasing stock prices? In those days Seagram never got much higher than US$35-$40 a share, possibly because the major stockholders recognised the pitfalls of antisocial behaviour and settled for lower dividends rather than bringing back Prohibition.”
“Formula 1 equates to ‘Bull fights’ justified by cultures that play to emotions not logic. Scientific factual data demonstrates speed and alcohol kill. Politicians take ‘donations’ in return for protection. For the record, smoking is still allowed, even though health costs reflect the community’s cost to support self-destruction. Profits not principles rule.”
Many thanks to those of you who tried to clarify the issue! As I feared, it seems that the only given in this matter is that it will continue to divide the industry.
When the Champers runs out, I'll be here for you
03 Feb 2006 15:59
The UK papers have been carrying stories recently about wealthy bankers blowing their bonuses in London’s bars and restaurants. The opulent spending has proved quite sickening to read, but also quite worrying for France’s Champagne houses.
Sales of jeroboams of Champagne in the UK have been so good in the last few months, that Dom Pérignon has almost run out, according to industry reports.
"We saw a similar pattern like this occurring this time last year,” a spokesman for Dom Pérignon told Decanter. “It seems that when bonuses are announced the city likes to celebrate with as big a bottle of Champagne as possible.”
The average jeroboam from a top champagne house costs over GBP3,000 in many London bars and nightclubs, Decanter noted.
Cheques should be made payable to Olly Wehring, and sent to just-drinks Towers,…
Wine Evolution - Greetings from Paris
01 Feb 2006 17:20
Today’s missive comes to you live and direct from Paris, where I’m attending the seventh annual Wine Evolution conference.
What initially started as a slightly depressing look at the western markets of the UK and Germany yesterday, has cranked up a gear today, as we’ve looked at the developing markets of Asia and the future for wine closures.
What’s been said before about the potential offered by the Chinese and Indian markets (for all beverage producers) doesn’t necessarily need repeating. However, hard and fast data on these countries is still hard to come by. So it was fascinating to hear the opinions of two people on the ground in these markets, both of which were clearly fired up by what could lie ahead.
A closer examination of the opportunities available for those entering the Japanese market, meanwhile, also shows that both the Old and New Worlds have a fair few adventures left ahead of them. Whereas imports into Japan in the first six months of last year slipped by 6%, the impressive performance of Yellow Tail – having sold 220,000 cases in its first year in the country - serves only to confirm the growing power of worldwide wine brands.
Earlier this morning, a lively workshop, including speakers for both natural and synthetic cork also showed that there’s life in the wine industry yet. With both sides arguing their respective corners, and screwcaps also added to the equation, this too is a story that we here at just-drinks will be keeping a close eye on for you.
Wine Evolution 2006 – Quote, unquote II
31 Jan 2006 14:10
Today’s key quotes from the wine industry’s leading lights at this year’s Wine Evolution conference in Paris.
“The impressive performance of Beaujolais Nouveau in Japan in recent times could suggest to the Southern Hemisphere that it too should consider a version of nouveau to highlight its portfolio in Japan.” – Lisa Perrotti-Brown, purchasing manager, Millesimes.
“India’s current per capita wine consumption stands at 0.006 litres – that’s almost 50 times less than China’s! Growth over the last three years, however, has been 25% in volume and 30% in value. 600,000 cases of wine were consumed in India last year; by 2010, India should hit 1.8m cases.” – Rajeev Samant, CEO Sula Vineyards.
“If you consider that movies mirror society, ten years ago you never saw the heroine (in an Indian film) with a glass of wine or a cigarette. You still never see them with a cigarette, but now you often see women with a glass of something and it’s almost always wine.” - Rajeev Samant.
“Our challenge is to defeat something that is measured in nanograms. If you’re going to do that, then you’re going to need science.” – Carlos de Jesus, marketing and communication director, natural cork producer Amorim.
“The debate is only beginning – people nowadays talk about substitutes for cork, not alternatives to cork. That alone shows that the debate is far from over.” – Carlos de Jesus.
“Not all synthetic corks are the same, and this is something that is not clear in the industry. You can have many different raw materials. It’s a question of education.” – Stefano Alderuccio, vice president European Sales, Supreme Corq.
“A lot of wineries seem to be taking a wait-and-see approach when it comes to screwcap – it’s very much a chicken-and-egg scenario. With synthetic corks, however, it would appear that the wine producers considering the closure have already changed to it – it’s maxed out.” Marc Engel, head of wines practice, B/R/S.
Wine Evolution - quote, unquote
30 Jan 2006 18:13
Greetings from this year’s Wine Evolution conference, here in Gay Paree.
This is my first time at this event, and I have left the running of the site in the capable hands of news editor, Dean Best.
It’s been a thoroughly absorbing, albeit slightly depressing, first day of Wine Evolution, in this our sixth year as media sponsor. The majority of speakers today have reflected on the harsh economical outlook facing the global wine industry. And yet, we were left on a high note after listening to a couple of opinions for the future that pointed to happier times.
To give you a good feel for what’s been going on, here are some of the more notable quotes of the day.
“I think in the future, wine marketing will be more linked to the moment of consumption, as well as the type of consumer, be they traditional or modern.” - Peter Klosse, Academy for Gastronomy, founder.
“Monopolies create both positive and negative opinions. Our task is to protect public health. We don’t make a profit, so there’s no incentive to encourage consumers to drink more.” – Louise Key-Hedberg, market analyst, Systembolaget.
“If you get your calculators out, at current rates, 12 November will be the day when the US overtakes France as the second biggest exporter of wines to the UK.” - Robert Joseph, journalist and founder of International Wine Challenge.
“There seems to be a paradox in the UK market, between a sophisticated consumer who is driven by low prices. My question is, why should smaller European wine makers bother trying to get into the UK wine market?” – Constantine Stergides, Greek wine journalist.
“In Germany, two out of every three bottles of wine are sold for less than EUR2.” - Werner Engelherd, chief editor Wein + Markt.
“There are 100,000 wines available in Germany, each claim is occupied. There is no need for 100,001.” - Werner Engelherd.
“The industry dilemma is the lack of real consumer insight – we need to make this a common target.” – Marian Kopp, president of Racke International.
“The playing field is being levelled, and time is running out for the dinosaurs of the wine industry. The New World is growing, while the Old World is struggling.” Vic Motto, chairman and CEO of Global Wine Partners.
“Premium wines are taking over the industry. This is a new paradigm for the sector… Higher price wines will become the new competitive battleground, this may change the very nature of competition.” - Vic Motto.
“Europe can recover because of the good example set by the New World, but they have to move fast.” - Thierry Jacquillat, president of Paris-Ile de France Capitale Economique and former general manager of Pernod Ricard.
“Even Coca-Cola is forced to adapt its product – the world consumer does not exist. I am French, and proud to be French, but not to do business with wine growers and co-ops in France.” - Thierry Jacquillat.
More tomorrow, so keep your eyes peeled.
Help me pass my driving test
25 Jan 2006 10:46
While writing up the story (even as editor, I still like to keep my eye in) regarding Martini entering Formula 1 sponsorship yesterday, I was reminded of a conversation I had just before Christmas with the communications vice-president of one of the world’s larger spirits companies.
In passing, I asked him for his opinion on Diageo’s entry into F1 through its deal to back the McLaren team with Johnnie Walker. To say that he was verbose on the matter is putting it mildly. “It’s absolutely ridiculous,” he spluttered. “How can an alcoholic drinks company possibly promote responsible drinking in such an irresponsible way?”
As the voice of the drinks industry, we’re naturally on the side of the beverage companies. But I find it really quite difficult to take sides on this one, and I need your help. It strikes me as peculiar to put the name of a spirit on the side of a very fast car, and then look at using the link-up to promote anti-drink driving campaigns. And yet, early last year, Diageo, when unveiling its Johnnie Walker sponsorship, asked an equally valid question: Who has the more powerful platform to educate consumers about the dangers of drink driving: the drinks companies themselves allied with high profile F1 drivers or faceless government authorities?
Add to the debate the fact that many soft drinks companies are being hit by bans from college campuses, for example, only because consumers who don’t get out much and watch too much TV (and don’t start me on this one) might get a little fat, and my confusion becomes overwhelming. Producers of alcoholic drinks, meanwhile, are freely able to advertise their wares in a sport which, if the product and the pastime are combined, could end up killing someone.
Believe me, I have actually lay awake at night trying to get my head round this. Could someone please talk me through it? Is this some sort of outside-of-the-box thinking that my little brain cannot comprehend?
Answers on a postcard, please?
Kaiser is dead - long live Kaiser
17 Jan 2006 22:49
The news this week that Molson Coors has finally exorcised its Brazilian demon will come as sharp relief to the North American company’s shareholders. Executives at the brewer have hardly had it their own way since the ink dried on the merger between Molson and Coors early last year. The struggling Kaiser business, though not alone among the brewer’s woes, has been one of its biggest headaches.
Molson bought Kaiser in 2002 for US$765m and saw the Brazilian brewer’s performance deteriorate at quite a pace. Distribution and marketing problems contributed to Kaiser slipping from Brazil’s number two brewer, with about 15% of the local beer market, to third place and only 8.5% market share.
And with Mexican drinks group FEMSA taking 68% of Kaiser for only US$68m, as well as assuming US$60m of debt, it would look like Molson’s South American gamble has been an unmitigated failure.
Molson Coors now plans to “focus on our biggest markets and to continue to deliver the cost synergies and other benefits related to the Molson Coors merger,” according to president and CEO Leo Kiely. Considering the company also said that it expects to report lower group sales volume and earnings per share, excluding items, for the fourth quarter, that’s exactly what the company needs to do, unencumbered by the Kaiser millstone.
So what of Kaiser? Is the brewer a poisoned chalice? Heineken, after all, appears to have shied away from the chance to up its stake in the company. Given that FEMSA is the largest distributor of Kaiser products in Brazil, however, one could conclude that Kaiser has found the best home it could hope for.
She's drinking WHAT?!
12 Jan 2006 16:50
Stay off the Stella and stick with Stoli – that seems to be the message from style gurus in the UK.
A new survey from liqueur brand De Kuyper has found that, when on a date, two-thirds of the UK population will make a judgement about their companion for the evening based on what they choose at the bar.
And that’s not all; a majority of these people (62%) are also prepared to raise a glass of something they wouldn’t normally drink simply to impress. Cocktails (38%) and a glass of fine wine (39%) come out top as the drinks to be seen with; it’s probably safe to assume that a pint of bitter or a Babycham didn’t figure too highly.
So, you’re on a date and what your companion drinks is just as an important factor in whether things progress as physical attraction or - God forbid - something as inconsequential as someone’s personality.
Shallow and small minded? I’d say so. But maybe I’m wrong because, according to (it gets worse) the country’s relationship psychologists, you are what you drink.
“It’s not only your clothes or hairstyle that give out clues about what kind of person you are,” says relationship shrink Mo Shapiro. “Your choice of drink is also a comment about your personality.” Thanks Mo. I like Guinness, so what does that make me?
And, tragically, it seems that some are using clothes and hairstyle in conjunction with the drink they choose. The survey goes on to say that more people in London than anywhere else in the UK match the cocktail they drink to an outfit they wear.
I ask you.
The Kid is all right
12 Jan 2006 16:27
A now-legendary quote in soccer circles here in the UK, came when a pundit insisted: “You don’t win anything with kids.” Suffice to say, the young team he dismissed went on to take silverware left, right and centre in the following months. So, maybe we should give youngsters a little more credit, perhaps? That’s what they’re doing in the US, it seems.
A fifth-grade student in Missouri has suggested a potential solution for the terminal problem of drink-driving, and one senator is so impressed with the idea that he has proposed it as a law change for the whole state.
Sen. Bill Alter has proposed that grocery and convenience stores would risk losing their liquor licenses if they sold beer at a temperature colder than 60 degrees. “The only reason why beer would need to be cold is so that it can be consumed right away,” he said last week.
The student came up with the idea when participating in a programme to teach elementary students about state government.
“You never know what’s on the mind of young kids - some of them are pretty smart,” Alter said.
Warm cans of beer as a cure to drink-driving? I’d just plump for an RTD, then. You’d even spill less.
Colouring in the grey
10 Jan 2006 17:12
It’s been a day of colourful characters hogging the headlines today. And if the drinks industry has plenty of one thing, then it’s colourful characters.
Karan Bilimoria, the Indian who made good in the UK by personally hawking his Cobra beer around the country’s Indian restaurants in the 1990s, was first up, as details emerged of his company’s flotation later this year. The brewer is eyeing a market capitalisation of US$1bn within the next ten years. Ambitious? Yes. But few would doubt the 44-year-old, who has had so much success in a UK beer market considered stagnant for quite some time now. Not only is he chasing success in the UK, but recent speculation surrounding Cobra has all been about upping its presence in Bilimoria’s home market of India.
Next, we welcome back former Allied Domecq CEO Philip Bowman into the drinks fold. Bowman’s business future has been one of the main talking points amongst spirits industry executives after the dust settled on the Allied sale to Pernod Ricard and Fortune Brands. Would he take the money he earned from the deal and head back to Australia, or would a man of his undoubted talents be tempted back into the fold? At 53 years old, I certainly wouldn’t have blamed him for taking early retirement – would you? But news today that he has joined Scottish & Newcastle as a non-executive director might just suggest that the drinks industry is far too enticing a gig to get out of.
That’s what I’m finding out, anyway.