Posted on | June 28, 2012
Written by | BevNetwork
SVP & Chief Marketing Officer
THE BEVERAGE NETWORK: Rémy’s portfolio is all about luxury. Have you seen the return to superpremiums that many economists talk about?
MARK BREENE: Absolutely. We are entirely in the luxury space—our range starts at about $30 and goes up to $2,500 for the Louis XIII Rémy bottling. As the economy has picked up, consumer confidence has increased and we are seeing greater spending on superpremium brands. Just look at last year: In 2011, spirits grew about 2.9% in volume, but the superpremium segment grew by double digits, so there is no doubt luxury is coming back.
After all, why do people consume spirits? They love the variety, the style and the sophistication. The more you move up the scale towards luxury, the more you get the things that people are looking for.
TBN: Are you seeing this return to consumer spending happening both on- and off-premise?
MB: Our portfolio is growing in both channels, particularly now that the on-premise has come back so strongly. Full service restaurants back up to pre-recession levels which is great to see. In fact, we are not only getting more people going to the on-premise, but we see them spending more every time they go—particularly on luxury cocktails. This has been a huge factor in the growth of the cordials category, for example.
On Cordials & Cognac
TBN: You mentioned cordials. After years of decline, the category is indeed showing growth, but only at the premium level, correct?
MB: Yes, the value segment continued to decline in 2011, but the overall category is growing thanks to very strong growth by some luxury cordial brands, such as Cointreau. In addition to on-premise recovery, another big trend contributing to the category increase is the reemergence of classic cocktails.
Cointreau has been at the heart of so many classic cocktails since it was created in 1874, and we are working to build that awareness. One thing we do is share some of the original cocktail books—many are 100 years old—and they all call for Cointreau. It’s one of the only brands historically called out by name. We also have a trade program called Bartender Engagement, which educates bartenders on how to make great cocktails.
TBN: How do you get the cocktail craze to translate to the off-premise?
MB: It’s more challenging for sure. Consumers are very adventurous with food choices and are willing to experiment in the kitchen with trying new recipes, but we have found that they are hesitant to try creating their own cocktails. So we developed a consumer-targeted program called Rendezvous where in literally in 15 minutes we can teach people how to make three simple but really great classic cocktails. We help them gain confidence for at-home entertaining.
TBN: What about Cognac. It’s on fire in Asia, but what opportunities do you see here?
MB: Certainly we see the potential in the U.S. as enormous as well. We are looking at places where we can bring new consumers to the market. For example, Hispanic consumers aren’t the traditional consumer for Rémy, but we know Mexican-Americans enjoy drinking status-driven brands and we know that brandy is a big category for that demographic, so it’s not an enormous stretch to say that they would enjoy drinking Rémy in the U.S. Similarly, we are reaching out to Vietnamese-Americans. Cognac is huge in Asia, and brands like Rémy 1738 do really well there, so that gives us the opportunity to promote it here to that ethnic group.
The other opportunity we see is bringing innovation to the category. Last year we launched Rémy V, a clear eau de vie from the house of Rémy, which is rolling out nationally now. It’s a mixable white spirit which enables us to bring more consumers to the category. Priced the same price as the VSOP ($39.99) we are currently selling every bottle we can get right now. Though Rémy skews slightly male, Rémy V skews female, so it’s helping us bring more balance to the portfolio.
TBN: With the various age statements, Cognac can be complicated. Have you seen overall consumer and trade knowledge increase?
MB: People definitely are more educated, but there is still a ways to go and we think that is our job. We have found the best way to increase education is to engage consumers and trade, so we’ve launched a program called The Heart of Cognac. It’s a 45-minute program that brings the experience of being in Cognac to the U.S. and we are offering it to retailers, wholesalers and consumers around the country.
On The Industry
TBN: Innovation seems to be a particular priority for Rémy right now. How important is innovation to success in the U.S. marketplace?
MB: The numbers easily reveal how critical innovation is in the U.S. market and we want to be part of that. American consumers are wonderfully open to trying new things. Tradition is important, but when they see new things, they want to try them. We have an innovation team in France currently, but we are creating an innovation team in the U.S. because we believe successful innovation has to be created in local markets. And we’re always learning as we go. For example, we launched Cointreau Noir a few years ago we learned that while consumers loved the liquid, we weren’t doing the best job with the package, so we’ve repackaged and repositioned it and are rolling it out again in a few months.
TBN: Rémy USA has also taken a new, more aggressive approach to advertising.
MB: Our communication always evolves as consumers do. We will talk to our consumers wherever they are, so we’ve shifted our communication strategy—and we’re investing more than we ever have in the past, which is a sign of our confidence in the upside of the market.
We’re running our first ever national TV ad campaign for Rémy Cognac, which hit in June with the tagline “Things are Getting Interesting.” Yet as more consumers move to digital media outlets, we are also heavily spending on sites like ESPN.com, BET.com—any place we can speak with young men, our target audience.
TBN: Rum is a category that Rémy has become increasingly invested in. Where do you see rum headed?
MB: People have been talking for many years about rum taking off, and we believe this will happen, but we must drive it. Rum is incredibly unique in that there is really something for every palate—there are rums that taste like vodka, those that taste like whisky, then all of the flavor variants. With our Mt. Gay brand, we have a growing number of super premium offerings—Mt. Gay Black 100-proof, and XO and 1703 Old Cask Selection. Our newest brand, Brugal, offers a uniquely dry Especial white, which isn’t sweet like most white rums and perfect for people with a dry palate.
TBN: What do you feel is the most important element a brand can possess in today’s market?
MB: Authenticity. I see it as part of the luxury trend returning. Consumers want to learn about brands more than ever before—the stories behind them, how they are made, who the cellar master at the distillery is. We are looking for more ways to tell stories around our heritage-rich portfolio at sampling events and through educational programs to trade and consumers.
This is something we look for in brands we acquire or develop as well, and we see tremendous opportunities in categories that we don’t currently play in. I suspect if we sit down in a year from now, I’ll show you how far we’ve gone from the portfolio we have today.