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

DIAGEO IS INNOVATING IN THE SPIRIT INDUSTRY USING THE FIRST INCUBATOR PROGRAM

It is very difficult when you are a start-up which is ahead of the curve. It is very difficult for many reasons but one which is that you see and make changes, and that many people want change but they expect changes to come from the established companies. Why? Less risk, more comfortable for them, wait for a plan and process, etc.

But change comes mostly from small companies. Savvy large corporations know that 'for the most part' they are behind the curve and many try different strategies to cope with this.

One smart process used by large companies to gain innovation, besides buying a 'promising' start-up, is to work with incubators.

A business incubator  is a company that helps new and startup companies to develop by providing services such as management training or office space.

Mot many large companies are doing it because very few companies get the point of this at the moment.

Disney Accelerator is a rare exemple. It is powered by Techstars, is helping today's tech innovators turn their dreams for new media and entertainment experiences into reality.

Some cities get into this, for instance the city of Los Angeles is supporting an incubator campus named LACI, for LA Cleantech Incubator.

LA Cleantech Incubator is the City of Los Angeles's official cleantech business incubator established to accelerate the commercialization of clean technology in Southern California.

Now, in the wine & spirits industry innovation is mostly driven by merger and acquisition. The concept of accelerator and incubator is mostly unknown. DIAGEO, Pernod-Ricard, Bacardi, etc. the big guys are struggling with generating 'disruptive' innovations and they are often relying on buying out companies which have successfully launched something new which made sense.

My biggest surprise was to hear in 2013 that DIAGEO was creating its own accelerator and incubator program.

DIAGEO!! Are you kiddin me!

Well they are the biggest and they know how to stay the biggest by taking all the necessary steps to maintain their leadership.

DIAGEO called this 'Distill Ventures'. I am blown away, check them out!

Screenshot of website of Distill Ventures by DIAGEO 18 Nov. 2015

I believe there are incubating 8 spirit companies right now.

Source: Distill Ventures

Pernod Ricard May be the New Owner of Courvoisier - What Would Martell Think?

Today an interesting thing is unfolding in the world of big money where shares of faceless big companies are taking overs of each other making the spirits industry even harder for small brands. Today Bloomberg and Goldman Sachs are announcing possible change of hands for Beam Inc. Beam Inc is the owner of multiple brands of spirits including Courvoisier Cognac. Potential companies predicted to take over are the two European spirits companies Pernod Ricard or Diageo. In both cases, it makes for an interesting scenario. In the case of Diageo, they already own multiple agreements and business shares of Hennessy Cognac in association with LVMH. A take over Courvoisier from Diageo would create some tensions for sure. On the other hand, Pernod Ricard is the well known owner of Martell, now the 2nd largest cognac company. If PR was to take over Courvoisier - what would happen!
I can hardly imagine what it must be to manage one of these Houses but two!! There would be certainly some difficult decisions and it may not be in the advantage of Courvoisier.
Read more at:http://tinyurl.com/3heza89