Posted on | July 27, 2012
Written by | BevNetwork
The Beverage Network sat down recently with Robert Furniss-Roe to discuss how the ever-expanding spirits market has become more challenging than ever.
THE BEVERAGE NETWORK: As Bacardi celebrates 150 years in business as an industry leader, where do you see opportunities going forward?
ROBERT FURNISS-ROE: What characterizes us best is our very focused portfolio; we are not all things to all people. There are some categories in which we don’t play—and who knows, maybe one day we might. That said, the obvious opportunity would be American whiskey. However, if you look across the U.S. spirits market, the largest categories—from a growth perspective—are vodka, rum and tequila. We have very large positions in all three, as well as a very large position in Scotch. So we are in the right categories, and we are always looking to expand. And that’s why we supported the idea of taking on distribution of a new Cognac, for example, with newly launched D’Ussé.
We’re all about substance. We don’t throw a hundred products against the wall every year. We try to be very focused; we try to be very deliberate, and we try to do it for the long term. When we go to the retailers—whether they’re in the on-premise or the off-premise—with a new product, the marketing package with it is complete. We’re not keen on just filling retailer shelves and then leaving them with the responsibility to see what’s going to work.
Like everywhere in the world, one of the reasons people relate to good spirits brands is because it’s an affordable luxury. There will always be a place for quality. People are willing to pay for that, if it’s a notch above the average.
TBN: There has been an explosion of new products and line extensions in general in recent years. How does Bacardi stay in front of the pack?
RF-R: We support retailers by building brand equity for the long term and by encouraging trade-up. One of the things that should resonate with our friends in retail is that we believe in the long-term premiumization of the business, that it is important to encourage consumers to be more connoisseurs. Also, we are very interested in sell-through, rather than sell-in. I think some of our competitors still talk the language of sell-in. I think it’s far more useful to look at consumer pull, and to put yourself in the shoes of the consumer. Our industry faces the challenge of how confusing we are to the consumer. We like to focus on helping consumers better navigate and understand our products on the shelf.
TBN: Sometimes that is easier said than done. What sort of approaches are working for Bacardi?
RF-R: It’s all about education. The world we live in is changing; consumers are better informed. It’s critical that the retailer keep up with the information flow because the consumer is likely to have done research prior to purchasing a product. We’re increasing our focus on point of decision and how to adapt our offer to different environments. We’re able to deliver different learning experiences according to what people are looking for.
At the other end of the spectrum, a lot of what we do in the digital space involves short films that educate the consumer around the history and heritage of the brand. We’ve had an amazing response to the things we’ve done there like offering consumers vintage items (T-shirts, etc.) in exchange for which they view a film to gain a bit of brand knowledge/education.
TBN: Flavor variations have become an important source of growth for many categories, including rum. Bacardi was a pioneer in this regard, and most recently introduced Bacardi Wolf Berry and Black Razz. Where do you see flavored spirits heading?
RF-R: Instead of launching flavors that people already know, we try to bring things that will appeal to the Millennial consumers who have been brought up in this environment of choice. They are more cosmopolitan, more connected than ever before. We go through a thought process: what are the combinations, the level of flavor and intensity of a product that will deliver the best finished drink to the consumer?
Black Razz uses a particular fruit only grown in Mexico: sapote. The flavor is more subtle, more interesting because it’s a fusion, between fruit and exotic flavor. For our spiced rum, OakHeart, we focused on the liquid, on trying to create spiced rum with a smokiness, from barrels that are over-charred to deliver that differentiating hint.
As the leaders in the rum category, we had to come up with something that was proven to be preferred by more people. We’ve taken the idea of spiced rum to the next level. Grey Goose Cherry Noir was done with a huge amount of thought and care to stay true to the French origins of Grey Goose. It is important to develop a product that has the right balance that’s ideal for making a selection of drinks rather than having an overpowering flavoring element. Reaction to that has been fantastic so far.
On Distinctive Spirits
TBN: Bacardi is unveiling a new-to-market Cognac, D’Ussé. Why the decision to take a position like that right now?
RF-R: We fell in love with the brand. The rest of the category is about old royalty; D’Ussé is about new royalty. The Cognac category is a bit dusty, backward looking, not attentive to trade. D’Ussé has a fresh approach. It has Cognac credentials, but with a very different bottle and symbol. Amazing liquid, very sophisticated, refined, smooth. It won’t be pushed out everywhere, retailing for $50 a bottle.
TBN: With Cazadores and Corzo, Bacardi has an important stake in the tequila world. Do you see the superpremium segment decreasing or increasing in overall importance?
RF-R: It is a large category, and still growing. Cazadores is all about authenticity, made in the highlands in a very quirky, old fashioned way. It represents the heart of the tradition of old Mexico. Those are our strengths—that sense of authenticity and that sense of craftsmanship.
Corzo is more about sleekness, design, and its striking packaging. It’s an approachable liquid, more refined. Bottom line: the future for premium spirits is positive in the U.S.—no exception in the tequila business.
TBN: Any other thoughts on what you think people are looking for in spirits?
RF-R: There is a relentless pursuit of novelty, entertainment and new products. But, again, what we believe in is not innovating on the massive scale, but doing a few things really well and properly thought out. What people look for is solidity, substance, and value. There’s a reason why Bacardi has been around for 150 years. Bacardi is the “one bottle bar”—it’s made expressly to be a product that doesn’t dominate and doesn’t disappear. Enough body to bring the spirits feel but not too much flavor to overpower a cocktail.
Our Light products are an example of innovation with a purpose: great taste with 95 calories a serving. It’s the brand you trust (Bacardi) coming out with the innovation you’re looking for: calorie control. Not a new idea but it’s been done in a good way. We are re-inventing the products to make them more natural and better-tasting. People have high expectations in that area of innovation—we want to be sure that we are delivering.