Olly Wehring

Please, buy our products - No, not you.

By: Olly Wehring - 19 June 2006 14:54

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Probably the most popular buzzword in the drinks industry of the last few years has been ‘premiumisation’. Hated by many for its lazy butchering of the English language, the premise of the word is really quite simple.

Getting consumers to trade-up and spend more is the aim of pretty much all of you out there, but what happens if, in trying to do this, a company finds itself attracting what it feels is the wrong crowd?

French Champagne maker Louis Roederer’s run-in last week with rapper Jay-Z is a class example of the potential minefield facing all brands.

In an interview with The Economist magazine, the company’s managing director, Frederic Rouzaud, was asked if his Cristal Champagne’s association with the hip-hop industry could harm his brand. “That’s a good question, but what can we do?” he replied. “We can’t forbid people from buying it. I’m sure Dom Perignon or Krug would be delighted to have their business.”

Jay-Z took exception to Rouzaud’s comments last week, deeming them “racist” and leading a boycott.

At the other end of the scale, this reminded me of an interview a couple of years ago with (then Interbrew but now) InBev’s John Woods about his Stella Artois brand. Here in the UK, GBP5 will get you six cans of Stella, a brand which boasts of being ‘reassuringly expensive’. “If there were evidence that price discounting was having a bad effect on the brand, then we would be concerned, but we don’t have any such evidence,” Woods told me.

Both situations highlight what’s on either side of the tightrope that brand managers need to walk.

And yet, both brands are also household names - although Cristal might be more of an aspiration than a realisation in most households - suggesting that one needs to be careful what one wishes for.

Comments on this blog post

Interbrew are now discounting. You can now buy 20 cans (4440ml) at GBP10 plus VAT at Makro as opposed to up to GBP3 a pint in bars.

 

John Curran, United Kingdom

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