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.
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