LUXURY AND PREMIUM PRODUCTS FOR BACARDY AND DIAGEO

Last week, at the 42nd Annual Impact Marketing Seminar, Bacardi North America regional president Pete Carr discussed the group recent acquisition of Patron Spirits for  $5.1-billion, a deal that lifts Bacardi from the fifth-largest spirits company in terms of U.S. market share to the second-largest.

Moving forward, Carr noted, 75% the company’s business will center on three brands, split between Bacardi rum at 22%, Grey Goose vodka at 26%, and Patrón at 27%.
Turning to Bacardi’s core rum brand, Carr used the occasion to unveil a revamped and expanded upscale portfolio, with new Reserva Añejo Cuatro and Gran Reserva Diez expressions set to join Bacardi’s Reserva Ocho and Reserva Limitada. “We’re placing a huge bet on rum premiumization,” said Carr. “Rum is the last category to premiumize, and we think there’s a $550 million category opportunity.”

Carr went on to detail efforts on several other top-performing Bacardi brands, including Cazadores Tequila and D’Ussé Cognac, and explained the turnaround strategy for Grey Goose, concentrated on plans to hold price, focus on the on-premise, and attract younger LDA and multicultural consumers to the high-end vodka franchise.

Meanwhile, Javier Ferrán, chairman of Diageo, spoke on the topic “Marketing Luxury Spirits In A Changing World.” According to Ferrán, several factors are set to drive luxury spirits growth in the coming years, including a consumer propensity toward “drinking better rather than drinking more,” and the ongoing rise of the middle class in emerging markets like Asia and Africa. He estimates that more than 700 million new consumers in emerging markets will be able to afford international spirits within the next decade.

He also noted the importance of consistently maintaining—and taking—price. “A key driver of perception of quality is price,” said Ferrán. “Luxury goods brand-building is a long-term game.”

Source: ShankenDailyNews.com

COGNAC D'USSE NEW XO EXPRESSION

D’ussé Cognac XO comes after the VSOP.

Two years after launching the D’ussé Cognac brand with a VSOP quality, Bacardi is extending its product line depth by applying an upscale brand stretch.

Note the technical terms, i.e., upward and downward product line stretch, product line versus SKUS, product line width versus depth versus length.

When creating a luxury line or luxury brand, one has to always consider these issues of brand stretching. Now the important matter is: where to start from?

. Middle, then down, followed by up.
. or High, then middle, then low.
. or lower, then middle, and then high.

It depends if the brand carries a true luxury authenticity, the process should be Higher, middle and then lower.
If the brand is building on popularity and milking democratization for the sake of building Brand Image, then going from low to high make sense, i.e., business model of 'masstige'.

D’ussé XO, produced at the Chateau de Cognac (Otard) by maître de chai Michel Casavecchia, is made from a blend of eaux-de-vie aged at least 10 years. Bacardi introduced the XO to a small group of journalists and mixologists in New York last last May. Bacardi plans to cover 11 states in the USA by the end of the summer.

Bacardi has sought to position D’ussé as a modern spirit that can draw drinkers from both inside and outside the Cognac category, and says the VSOP ($45) has succeeded on that front in the early going.

Cognac D'Usse VSOP by Bacardi

With D’ussé’s new XO, Bacardi has taken an aggressive stance in staking out the brand’s ultra-premium credentials, price-positioning it significantly above the XO Cognacs of competitors like Hennessy, Rémy Martin and Courvoisier.
Retailing at $275 a bottle.

Source: dusse.com