Comment - Brown-Forman's Southern Comfort Faces Uncomfortable Dip
The ad campaign brought Southern Comfort back to relevance
Southern Comfort's marketers like to take their branding cues from the brand's spiritual homeland, New Orleans.
But even the relaxed Big Easy would find it tough to shake off Wednesday's disappointing first-half results that saw Southern Comfort's global sales slip by 4%. Never mind that the drop matched the decline the brand saw during its last financial year - or that Brown-Forman's North America whiskies in contrast seem to be able to do no wrong at the moment. What will really hurt Southern Comfort's handlers was a sales decline in the US.
After all, it was just six months ago the brand's global marketing director told me that Southern Comfort's unconventional TV campaign - and online viral hit - had helped the portfolio post growth for the first time in five years in the US. Next, she said, the company was to aim its “secret weapon” campaign at Southern Comfort's other main markets, in the UK, South Africa, Australia and Germany, and affect a similar turnaround.
That turnaround has actually happened outside the US, as overseas sales increased by 1% in this week's results. However, as the focus shifted overseas, Southern Comfort was unable to keep its US plate spinning, and in the first half of the current financial year, the portfolio saw its domestic sales decline by a high single-digit rate.
It's an unfortunate situation for a brand that traces its roots back to 1874, but the harsh reality is that what once occupied a sparsely-populated liqueur category today finds itself jostling for position among the slew of flavoured vodkas and other ready-to-pour spirits. Paul Varga told analysts after first-half results that Southern Comfort faces “competitive pressures” despite the ongoing media campaign.
Varga was right to mention the global push because the initial marketing campaign, for my money at least, delivered the best alcohol TV ad of last year. Its insouciant man-on-a-beach character, was for a time able to bring the brand back to the mainstream just through its quirky, easy-going charm. That momentum, however, though a combination of time and weaker follow-up commercials, seems to have been lost.
Asked yesterday if the marketing campaign's initial sales boost has petered out, a Brown-Forman spokesperson told just-drinks the company still has a lot of faith in the push, which “brought the brand back to cultural relevance”. “While the last quarter was softer than expected in the US, we still have confidence in the long-term effects this campaign will have for the brand,” the spokesperson added.
Despite the optimism, Brown-Forman must be aware that there is a lot of work ahead for Southern Comfort. The slogan for the adverts is “Whatever's Comfortable” - this week's results, however, were anything but.
It looks like 2014 is shaping up to be the year of surprises in the spirits industry. First up, in January, we saw Beam Inc head in a direction that few of us foresaw. Then, today, Whyte & Mackay has ...
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