Blog: What price premium?
Olly Wehring | 22 April 2010
I managed to grab some time with Diageo's chief marketing officer, Andy Fennell, yesterday and a fascinating chat we had too. The fruits of our conversation will be up on just-drinks early next week.
I thought I'd take the opportunity to ask Andy a question that I've been scared of asking anyone in the drinks industry, since I joined just-drinks, for fear of looking, well... a bit stupid.
"What price is premium?"
The term 'premiumisation' may remain a spellcheck candidate on Word, but in our industry it has become ubiquitous with every single one of you. But, how much does a product have to be to qualify as 'premium'?
"The generally accepted definition of premium (in the spirits category) is at the Smirnoff, Captain Morgan price point and upwards," Andy told me. "If you're in the US, you're talking US$10 and up per standard bottle is premium, $20 and up is super-premium and $30 and up is ultra-premium."
Do these levels ring true with your firm? Because $10 per standard bottle strikes me as remarkably good value for a bottle of premium spirit.
Whisk(e)y companies spend a lot of money and effort ageing their products for that premium taste....
PepsiCo created a stir last week with the news it is testing a product called Caleb's Kola, with some in the media claiming it was the beginning of a new “craft soda” category....
SABMiller's bid to widen the appeal of beer is very much in evidence at its latest 'House of Peroni' - with beer cocktails and a bigger bottle for the Italian lager brand on offer. ...
Here's a round-up of the big stories on just-drinks last week, featuring PepsiCo, SABMiller, the Scotch whisky category and the US wine market....
- Analysis - Remy's Cognac "dead-cat bounce"
- Comment - How Hand-Made is Tito's Handmade Vodka?
- Heineken to stay "active player" in beer M&A - CFO
- Diageo's future brighter than present suggests
- Diageo's Q1 Results by Region
- Moët Hennessy unveils first Travel Retail outlet
- United Spirits sees Q1 net loss
- Beam Suntory, Edrington part ways in Travel Retail
- Diageo puts Beckham centre stage in Haig Club ad
- Smirnoff Ice gets India launch