A Conversation With Industry Professionals
very strong affinity for the brand. There is
nothing to benchmark it on, since it is such a
unique product, but early indicators are en-
couraging: One bar in Miami did 70 cases
in 3 hours! At $32 (SRP) it’s less expensive
than Champagne but still very premium.
What else is new with Absolut?
Absolut remains the most iconic
vodka brand in the world, and the number
one call brand on-premise. We’ve main-
tained our premium position without dis-
counting, and the brand’s profitability has
increased every year since we purchased
it five years ago. Flavors are still strong for
us—Absolut essentially created the flavor
phenomenon; we just released Hibiskus
and we have a new flavor coming out this
spring with a Hispanic tilt.
We are also launching an ultra-premi-
um expression, called Elyx, for $49 (SRP).
It’s a single-estate, hand-crafted vodka
from a small farm in Sweden. We’ve been
working on it for two years, and believe it’s
the best-tasting vodka out there—I love
drinking it straight. Look for it in April.
Unlike vodka, the cordials/liqueur
category is quite flat. How does a
brand like Kahlúa find growth there?
Like Absolut, Kahlúa has tremen-
dous brand equity, but the challenge
here is that the brand is constrained to
the occasion. In the past, Kahlua was fo-
cused on two or three drinks which aren’t
quite as popular anymore, so our innova-
tion has been designed to widen its us-
age and bring in new consumers. Kahlúa
Midnight is less sweet and targets the
shot occasion on-premise.
Another innovation you are first-
to-market with is a low-calorie rum
sweetened with zero-calorie Truvia.
Our research on the female demo-
graphic revealed that they enjoy spiced
rum, but they drink vodka and soda in-
stead because it’s lower-calorie. And we
also felt that the low-calorie products on
the market just don’t taste very good. We
developed Malibu Island Spice to meet
this need; and we put “70 Calories per
Serving” prominently on the label to make
it very clear to consumers.
The great thing about innovations like
these is that they elevate the base brand
as well. Malibu is showing strong growth.
Irish whiskey—thanks to Jameson—
has been exploding for some time. Do
you see this continuing?
If you look at the whiskey category
in general, you will see that Irish is still a
very tiny part of that, so we see tremen-
dous opportunity for growth. There are
many markets across the country where
we still need to introduce people to Jame-
son, and lots of multi-cultural opportuni-
ties. Another exciting trend is that people
are coming into whiskey in general—more
than ever, Americans are opening their
hearts and wallets to whiskey, and we
see huge potential to move them into
Irish whiskey. People feel very close to the
Jameson brand—it is accessible and not
at all pretentious.
ABOUT WINES & SPIRITS
What are Millennials looking for
We have done a lot of research into
how young people shop the wine category
and we have found that traditional wines
aren’t as appealing; details like country of
origin and grape variety don’t really mat-
ter to them. The younger demographic is
looking for simplicity, which is why blends
(rather than single varietal) are doing so
well. A strong package—something that
stands out—a good price and a delicious
taste profile are the crucial attributes.
Also, the taste profile this generation
prefers is different: What their parents may
perceive as very sweet, they find not-too-
sweet at all. Acidic wines are not appealing.
We actually developed a new blend called
Deadbolt—our first California still wine—
with the Millennial consumer in mind.
What is your opinion of the
word “luxury” and what role do you
believe it plays in the wine and spirits
In the U.S. there is a very large
group of people who appreciate the finer
things and are prepared to pay for it. We
have one of the finest luxury portfolios in
the business and plan to be doing more
in the high-end segment going forward,
with Perrier-Jouët Champagne, The
Glenlivet and Chivas. If you look at how
luxury consumer goods are sold, they
all have strong stories about craftsman-
ship and history to back up the price. If
you pay $200 for a bottle of Scotch, you
want to share the story about how it was
made, and why it is special.
The most effective way to sell premium
brands is to engage people—consumers
generally don’t come into a new category
because they saw an ad, they come in be-
cause a friend or relative introduces them.
THE MILLENNIAL GENERATION HAS
BEEN OUR BIGGEST MOTIVATION TO
INNOVATE ACROSS CATEGORIES.