Market research
In wanting to trumpet their credentials, craft spirits brands still owe much to the bigger, more-established brands in the segments. Richard Woodard believes beating up the big boys leaves craft brands open to charges of biting the hand that feeds them.
Do large volume sales make your brand dreadful?
It was a classic clickbait headline -- albeit one that appears to have backfired, since the post has since been removed: "Ban These Dreadful Gins". Which "'dreadful gins"? Oh, just the top four best-selling brands in the world: Gordon's, Bombay/Bombay Sapphire, Tanqueray and Beefeater.
Why? Well, the detail here is a bit hazy, but the author - a self-confessed "gin snob" - seems to think the brands in question are a bit too industrial, bland, commonplace, and so on. A bit too successful, in other words. So, ban them. Take them off the shelves.
We could spend a bit of time on the many holes in this argument, including the fact that many of the new 'craft' gins that the author cherishes are created not in some romantic micro-distillery, but contract-distilled in a large-scale plant.
We could point out that these 'bad' brands have almost single-handedly kept the gin category afloat when the segment was painfully unfashionable.
We could even point out that the entire premise of the article is utterly idiotic. Let's focus less on the misguided message, though, and more on the mindset that informs it.
This kind of thinking encapsulates what I believe will be the true legacy of the current craze for everything that is loosely - often lazily - termed 'craft'. Not so much the direct influence on the market of the products themselves, which in most cases, by their nature, remain small-scale, but their impact on the consumer mindset.
Better to dig up some obscure gin from Outer Mongolia that uses yak horn as a botanical
By this logic, it doesn't really matter what Bombay Sapphire or Tanqueray taste like or whether you enjoy them – they are immediately ruled out of court by their volume size and by their multi-national owners. Far better to dig up some obscure (and borderline undrinkable) gin from Outer Mongolia that uses yak horn as a botanical.
Nor is this phenomenon confined to gin: It transcends spirit categories, not just across the mainstream, but also in relatively niche sectors such as bitters. Here, the success of Jägermeister in markets such as the US, Germany and the UK is stuttering, partly because of a surge in interest in craft bitters that also has its roots in this conception that obscurity equates to authenticity, and that being a tiny, unknown brand somehow makes you more credible.
If you're a big brand owner, there are a number of ways to respond to this, but the broad mantra appears to be: "If you can't beat 'em, join 'em." This may mean anything from acquisition to innovation or simply a repositioning of your brand.
In gin, we've certainly seen this mixture of approaches. Pernod Ricard buying Monkey 47, Beam Suntory taking a controlling stake in Sipsmith – but also readying a new Japanese gin, Roku, for launch this summer.
Then, there's Hendrick's, which finds itself in an interesting position as the gin resurgence matures. A trailblazer for the 'new wave' of gins, the William Grant & Sons-owned brand has been hugely successful and is closing in on 1m cases a year. But, it hardly qualifies for craft status and risks ending up on the kind of 'gin-ocide' hate list where we began.
William Grant must have been tempted to leave well alone, given Hendrick's ongoing success, but instead the company has launched Orbium, a 'quininised' variant of Hendrick's at a 10% price premium to its parent. It's a dipping of a toe in the innovation water, rolled out to UK bartenders and with a 4,000-bottle initial release. More PR opportunity than serious product launch – for now at least.
Moving back into bitters, Jägermeister's response to the craft threat has a couple of strands to it: a repack, billed as the most significant change to the brand since its creation in 1878; and the launch of Manifest, a super-premium line extension with a higher abv and a more complex botanical recipe.
Meanwhile, Pernod's Havana Club teamed up with The Bitter Truth to create a range of four 'cocktail flavourings' back in 2014 under the banner of The Essence of Cuba – a response to the appetite in the high-end on-premise for niche bitters and cocktail ingredients.
When you're a brand with a distinctive positioning, such innovation makes sense. Not only do you hope that your line extension is a success in its own right, but you also aim to bring the spotlight back onto your core brand at a time when consumer attention may be wavering. In other words: "Look at me – I'm still here."
NPD is an essentially risky business, even if it stands on the shoulders of an existing brand
But, NPD is an essentially risky business, even if it stands on the shoulders of an existing brand, and many new launches are doomed to failure. For those with a gap in their portfolio, the best response to the rise of the craft mentality is likely to be acquisition, rather than innovation.
Hence Pernod and Monkey 47; Beam Suntory and Sipsmith. Hence Constellation Brands and High West; Pernod and Smooth Ambler; William Grant and Tuthilltown Spirits. Buy a reasonably established success story and reap the benefits of enhanced distribution.
These acquisitions aren't in any way replacements for the big brands these companies own (Beefeater for Pernod, Larios for Beam, and so on), but they can be useful bolt-ons that could provide lucrative returns as the craft zeitgeist grows ever more mature.
Or, in the case of gin snobs who want to ban brands on the grounds of their success and profitability, ever more immature.
