A boozy gift!

The age-old supermarket wars are at full throttle in the run-up to Christmas, with deals being done on everything you could possibly need (or absolutely not need) during the festive period.

Take the pricing of spirits: Tesco has put many 70cl bottles at £14, whilst Morrissons has priced similar brands at £15 per litre. However, with talk of new alcohol pricing laws, this may be one of the last chances supermarkets will have to lure us in with such offers – a thought that will doubtless cause panic for many on New Year’s Eve, and relief to many on New Year’s Day…

I was struck when walking through Heathrow by the great use that brands make of this type of space – and of a captive audience.

Jack Daniels currently has an area dedicated to experiencing whisky, which really brings to life the brand’s values, time, care, quality ingredients and American heritage – a great way to make the link to its new ‘Gentleman Jack’ launch, which I doubt I would have noticed otherwise, and certainly would have been unlikely to link back to Jack Daniels.

With The Grocer having recently published its annual Focus on Spirits, it seems like a good time to follow up my recent post on premium spirits . Last time, I looked at some of the factors driving sales of premium spirits – such as the search for Total Basket VfM, the rise of a new type of status brand, and consumers’ desire for statement drinks.

This time, I thought I’d take a look at what some of those brands are doing to encourage consumers to trade up from their more everyday counterparts. So for those of you thinking about joining the modern-day gold rush that’s become the premium spirits market, here are four simple steps to success. Just don’t get trampled in the crowd!

Step one: Think outside the box (with some distinctive packaging)

Brands like Belvedere, U’Luvka and Iceberg vodka have made a talking point of their packaging, giving them standout on shelf but also in-home. These brands begin to justify their premium pricing from the moment consumers set eyes on them.

Step two: Make like the Brothers Grimm, and find yourself a story

Brands like Sipsmith or Zubrowka Bison Grass have focused their communications on a clear narrative, which engages and involves consumers on an emotional as well as rational level. In doing so, they encourage a greater loyalty to the brand, creating advocates and educators.

Step three: Give ‘em a moment of magic

A number of the premium spirits brands have adopted the same tactic as their more mainstream cousins, looking to create a unique ritual around the drinking experience. The classic example of this is of course the ‘Gordon’s serve’, as showcased until recently by a certain fiery, foul-mouthed chef. Brands such as Russian Standard have done so by tapping into the popularity of cocktails, as consumers escape the bleak climate with a touch of glamour. Its Golden Summertime Iced Tea cocktail was created especially to showcase the distinctive flavours of Russian Standard, and the ritual of its creation allows consumers to feel closer to the brand.

Step four: Start a rumble in the jungle

One of the biggest trends for spirits in general, and particularly for the premium end of the category, has been the use of experiential marketing to promote and build engagement with their products. Last year we saw the Smirnoff Nightclub Exchange make headlines around the world, and this year the brand’s coming back for more – more events in more countries, with Madonna as ambassador.

At the premium end of the market, there are some great case studies such as the Jameson Film Club or Hendricks Curiositorium, but the grand prize has to go to Courvoisier, which  has partnered with a range of eclectic, exciting partners from Secret Garden Party to Bombas & Parr to speakeasy White Mink, currently popping up at the Edinburgh Festival. Courvoisier has created a series of high-class, exclusive events that attract its target demographic of ‘forward thinking 28+’, and in doing so, has ensured that the positive memories customers carry away from those events will be indelibly associated with the brand. Through the creation of these experiences, spirits brands are making themselves more than just drinks: they’re a key part of the buzz.

So there we are: four steps to success. As with most of life’s formulas, when you break it down, it suddenly looks simple. I’m off to find my home distilling kit – Elderflower & Cadbury’s Creme Egg vodka, anyone?

PS – if you’re interested in long-lasting innovations in drinks why not check out our 40 Drinks Innovations that Shook the World?

News came from Marketing magazine’s website last week that Drambuie is to launch a premium edition into the UK market. Drambuie 15 will target ‘discerning malt whisky drinkers’ and has a drier taste than its other products.

According to First Drinks’ Spirits & Champagne 2011 market report, sales of premium spirits have increased by 11% in the past year to £202m in the off-trade and £234 million in the on-trade.

So what’s behind the rise in sales? While it’s impossible to pinpoint exact causes, here are three factors that may be helping to drive the category…

The search for Total Basket VFM

One of the big developments we’re seeing at The Value Engineers is a shift in the way consumers are shopping for their food & drink. Brand is no longer king across the categories, and ‘value’ brands are a far cry from the downmarket, low quality alternatives as which they were once perceived. Instead, consumers are looking for ‘total basket VFM’ (value for money), mixing and matching premium and value brands. It’s a phenomenon that our sister agency, Leapfrog Research, called ‘spectrum shopping’ in a recent report for Marketing Week.

The recession has forced shoppers to recognise which brands they’ll trade down on. As a result, they’re buying more budget brands and compromising on the everyday – in order to free up spend for the two or three brands that really matter to them. It’s behaviour that benefits the premium spirit brands, as these brands have worked hard to persuade their consumers of their unique benefits and ‘statement brand’ position.

In the  same way that John Lewis has seen sales soar in the classic recessionary purchases of lipsticks and cushions, as consumers look to refresh their look or their décor without substantial spend, so the high-end spirits brands offer consumers a premier option with associated cues of quality and indulgence, at a relatively small price premium.

A new type of status brand

Since the financial crash, we’ve seen a backlash among younger professionals against über-consumption and ‘massification’. This has has led to a new type of status brand emerging: one that’s niche rather than mainstream, and not immediately recognised by those outside its fan base. Think of Chase’s Marmalade Vodka, or Sipsmith, which has deliberately positioned itself with a more niche, artisanal focus:

“We hand craft our spirits in tiny batches of around two hundred bottles, with skill, care and an almost fetishistical love.”

A desire for ‘statement’ drinks

Finally, premium spirits have successfully promoted themselves to consumers as ‘statement’ drinks – brands that demonstrate their customers’ knowledge and expertise, or more sophisticated palate. Look at the recent surge in consumers buying premium tequila in pubs, with brands such as Cazadores or Silver Patron becoming the symbol of sophistication that we once saw in Perrier Jouet or a martini. Such brands are seen as a smoother, higher quality drink than their value cousins, giving a clear justification to consumers looking to trade up at point of sale.

Of course, the three factors I’ve identified are only a part of the wider picture: the brands that sit within the category can also claim credit. In my next blog, I’ll look at some of the ways in which premium spirits are encouraging consumers to trade up. In the meantime - cheers!

In a new series of posts, Polish born Kamil Michlewski, Senior Consultant at The Value Engineers, looks at the big questions facing Polish brands trying to make it in the UK.

There are now hundreds of Polish brands, especially FMCG products, in the UK. Will they actually be bought by British consumers?

In order for the UK consumers to pick up Polish products, Polish brand owners and marketers will need to look at how their brands can be adjusted to suit local expectations and tastes. In our experience at The Value Engineers, the product is the strongest part of the marketing mix of Polish brands. Other elements - packaging, promotion, distribution – tend to be lacking.

The difficult to pronounce brand names themselves do not help in the recall and recognition amongst Brits. Hence, Polish brands currently do not feature on the British shopper’s consideration set. To give just one example; Żubrówka gets phenomenal word of mouth from the Poles in the UK but the recognition of the name amongst indigenous population is extremely poor. The local brand shortcut is ‘bison grass’ vodka.

A case could certainly be made for developing this distinctive feature into a true differentiator amongst the largely generic vodka category in the UK. To achieve that, it would be important to look at UK brand hierarchy and how it connects with the needs, preferences and expectations of the British population. As one can imagine, the potential rewards for getting it right are huge.