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Archive for the ‘Liquor Products’ Category

How Exclusivity Makes a Premium Liquor Brand a Cultural Phenomenon

Saturday, August 15th, 2009

by: Geoff Ficke
As in so many consumer product categories, it would seem that there is little room left for innovation in mature businesses like liquor. Most of the world’s best selling alcohol brands have pedigrees that extend back for generations, if not centuries. Johnnie Walker scotch, Jack Daniels whiskey, Dom Perignon champagne, Heinneken beer, Pusser’s rum and Stolichnaya vodka are just a few examples of seasoned products that are recognized and consumed around the world.

When an industry seems to be settled and stagnant, however, is actually when opportunity can be greatest for entrepreneur’s seeking to roil the waters of staid competitors. In category after category, from cosmetics, to bottled drinks, to retail, to automobiles, to ready to wear, and many more, new brands pop up, penetrate the market and seize sales and market share from old line companies that become bloated and lethargic.

A recent example of this phenomenon occurred in the vodka classification of the liquor industry. The largest selling alcoholic spirit in the world for many years has been vodka. The category is highly fragmented, consisting of premium Russian brands and much cheaper eastern European and American produced varieties. This striated marketplace created an opportunity for an aggressive entrepreneur seeking to capitalize on the industry’s corpulence.

Sidney Frank was a highly successful serial entrepreneur. In studying the premium spirits business he thought he identified a niche that was not addressed by any of the endless labels of vodka he saw on store shelves. Mr. Frank decided to develop and target a niche brand to address this perceived unaddressed soft spot in the market.

He quickly assembled a team of distilling specialists and took the crew to Cognac, France. Mr. Frank correctly concluded that American consumers associated French manufactured products with quality, luxury, exclusivity and high end craftsmanship. His simple, elegant idea was to craft a premium, French vodka that would be distilled and marketed to appeal to American tastes.

Sidney Frank’s vodka uses French winter wheat, is distilled through a column still with alpine spring water and filters the bulk through the limestone plateau of the Massif Central. Each of these artesian elements adds to the unique taste and brand mystery that has become entwined with the product that was introduced to the American market in 1997. In addition to the production features that make this vodka unique, Mr. Frank supported the launch with a most contemporary guerrilla marketing strategy.

For young hip Americans, the club scene, hip hop personalities and sports and entertainment are the beacons of contemporary fashion trend making. Sidney Frank made sure that his new vodka, priced at a super-premium level compared to his competition, was featured in the exclusive bars, clubs and restaurants that are enjoyed by these trend setters. Promotional parties and tastings were held across the country and invitations became highly prized. Soon rappers, actors, athletes and media personalities were seen drinking the product and mentioning the brand in numerous songs, at award ceremonies and in interviews.

The platinum vodka that Sidney Frank created and launched so successfully was Grey Goose. Only seven years after the brands appearance in the American market, Grey Goose was sold to Bacardi for $2 billion. This was the largest valuation ever placed on a single liquor product.

The hyper-success of Grey Goose has been replicated in various products and industries throughout American history. The particulars of the march to market of successful brands are remarkably similar, even if the end products are totally dissimilar. Invariably the process begins with an aggressive entrepreneur identifying an un-served or underserved niche in a mature market and filling the space with a superior new offering.

The success of Grey Goose has lead to a raft of new, super-premium alcoholic brand launches. Limited edition drinks and celebrity sponsored lines have become ubiquitous. However, Sidney Frank, now deceased, created the super-premium category and reaped the largest fortune because of his keen eye for consumer taste trends and his ability to respond with a superlative product and a unique guerilla marketing strategy.