Market research
Last week, Mast-Jägermeister, the German owner of the Jägermeister herbal liqueur, took control of its US distributor Sidney Frank Importing Co. Part of Mast-Jägermeister's new strategy to control distribution in its core markets, the acquisition was otherwise noteworthy because of the important role Sidney Frank has played in Jägermeister's global rise. With Jägermeister volumes in the US under pressure, Mast-Jägermeister is looking to move away from its famous brand's reputation as a party shot and embrace the new craft spirits culture. But, as Mast-Jägermeister executive board member Michael Volke told just-drinks from New York last week, not completely away.
//i4.aroq.com/5/image1.jpgjust-drinks: Why did Mast-Jägermeister buy Sidney Frank?
Mast-Jägermeister executive board member Michael Volke: For us it was a logical step. We now control our three biggest markets, which are Germany, the US and the UK. We wanted to control these three markets and have direct access to them.
We've been working with them [Sydney Frank] for many decades. We've come a long way together, and seen the brand come from small beginnings to the biggest liqueur in the industry here.
It's a new exciting chapter for Jägermeister, with two-thirds of its global distribution under our own control.
j-d: This is a slightly different acquisition, however, because of the history Sidney Frank has with Jägermeister.
MV: They've [Sidney Frank] have done enormous development for Jägermeister, not just in 1974 when they started [distribution in the US]. The Jägermeister brand was then a very different brand in terms of global footprint and they developed it from small beginnings.
That's the reason that it is a different decision, but also what makes it even more logical because of our long-standing relationship. We know all the people here and they know us and our strengths, so it makes super sense.
j-d: Will you make any changes at Sidney Frank?
MV: We bought Sidney Frank because of the people here. It is one of the best companies of its kind with global acclaim. So I think most of the things will stay in place, it will operate as is. Possible changes will come in over time but they will be geared to building the Jägermeister brand capability. Most important for us is to have no disruptions.
j-d: Will those changes involve job cuts?
MV: No. It's not planned at the moment.
j-d: Why have Jägermeister volumes in the US fallen?
MV: The brand has gone through a rough time of it recently. The core drinking occasion - the shot market - has come under enormous pressure over the last couple of years.
The consumer is more open today to new experiences and Jägermeister has seen some decline in recent years. But this is not dissimilar to other markets - it's not a Sidney Frank thing, this is a life cycle question. It happened in our home market in Germany years ago.
So with the very substantial brand equity we've turned these markets all around and we will do the same here. And that's very much based on quality, taste and a super cool brand. And with control of Sidney Frank we can tap the market and execute innovation and marketing concepts much quicker and like never before. That's why we are very upbeat.
j-d: In the past year, Jägermeister has appeared to position itself more as a craft spirit. Is that a fair assessment?
MV: Absolutely right, and this will also be a part of the future. We have new campaigns coming and part of this will also be all the quality stories behind Jägermeister, because we have a super cool story to tell.
j-d: Do you want to leave the party image behind?
MV: No. Jägermeister will remain always a brand for lively situations and this will be continued. So the on-premise focus especially, the tasting programmes, the music programmes - everything which is on our plate is going to continue.
j-d: Jägermeister cocktails are also something you've been pushing...
MV: Yes, it's fascinating. More and more bartenders are looking into herbal liqueurs for cocktails. It's an area which is relatively new and I think that's something we can play with even more in the future. And we will do.
j-d: Looking back at the history of Jägermeister, was there any resistance from the management in Germany when Sidney Frank first started positioning Jägermeister as a party drink, using the 'Jagerette' hostesses in the on-trade for promotion?
MV: Obviously, it took us a while to understand what it was. At that time we were big in Germany and some other European markets. But it was a leap for everybody at that time, no question. But it developed from a 1m-case to a 7m-case brand in the space of ten to fifteen years. So it was amazing for a liquor brand in Germany. We were impressed by what happened.
