White spirits: the retailer's perspective
How do travel retailers go about making sense of the increasingly competitive white spirits segment for their time-poor customers? David Davies spoke to Interbaires (store pictured left) and Aldeasa (store pictured below) in a bid to find out
From major name suppliers like Diageo to more localised producers that may be responsible for just one or two offers, white spirits is extremely big business. Indeed, the last decade has arguably witnessed an unprecendented explosion in creativity, with a raft of exciting new white spirits products reaching the market.
This development has certainly not been limited to the domestic market, and the overriding impression after speaking to Aldeasa and Interbaires is that travel retailers are now experiencing increasing levels of success with a wide variety of white spirits products.
Just ask Rafael Arroyo, liquor category representative at Spain-based retailer Aldeasa. “White spirits was one of the fastest-growing segments last year in the drinks family at Aldeasa,” he confirms. “For the year 2007, the growth of vodka sales outpaced total spirit sales, growing by nearly 18% compared with the previous year.”
The segment is also performing strongly for Argentina-based retailer Interbaires. “The white spirits category is an important one for our business,” says the company’s marketing manager, Manuel Aubone. “Although it doesn’t reach the volumes of whisky or wine, it has grown consistently in the past years.”
International prestige
With so many established white spirits products already on the market, and so many news ones fighting for attention (and shelf-space), Frontier asked its featured retailers how they approached the process of devising a comprehensive – and attractive – white spirits offer.
“In order to include a new [item] in Aldeasa’s portfolio [of] brands, they need to have a great international prestige, especially in the domestic market of reference,” explains Arroyo. “In the case of saborizados, they will have marketing, promotions, special offers, and demonstrations or testing in our shops.”
For Interbaires, the white spirits strategy is informed by the simple fact that Argentinians tend to prefer wine over other liquor products. “Even though the sub-category could be more widely developed, we carry only some brands on each type of spirit,” explains Aubone. “The reason for this is limitations in store space, and the fact that Argentinians are not heavy consumers of white spirits. Argentinians are mainly wine consumers in terms of alcoholic beverages.”
Building the category
Not surprisingly, vodka offers such as Absolut figure prominently in many retailers’ lists of the most successful white spirits products. Many have also moved to enhance the sales of vodka – and indeed other white spirits items – with carefully targeted campaigns, GWPs, in-store tastings and other promotional activity.
“Regarding promotional activities, the sub-category is quite active with discount promotions, GWPs, and even product launches with in-store tastings,” observes Aubone.
Aldeasa’s promotional efforts on behalf of white spirits encompass its retail operation worldwide. “We have successfully handled many promotions throughout the world,” confirms Arroyo. “At present we are offering a twin-pack of Absolut Blue – for example, at Cancun Airport – with a 20% discount off the normal price. We are also offering 20% off Grey Goose (Atlanta and Peru) and Bacardi Superior (Spain).”
Overall, the most successful brand at present for Aldeasa is Bacardi Mojito, with the recently-launched Absolut Mango also performing strongly. “That has got a favourable reaction from the vast majority of our clients,” says Arroyo.
Interbaires also has reason to praise the creativity of the Absolut team. “Vodka is the main beverage within the category, led mainly by product launches and innovation in flavours carried out by Absolut,” notes Aubone, who adds that tequila is also becoming an increasingly important aspect of the white spirits segment.
With both long-established and new offers continuing to generate strong sales, there is every reason to expect that white spirits will increase in importance to the overall liquor category. Originality and creativity are arguably at an all-time high in this corner of the market, so it comes as no surprise to discover that retailers are upbeat about the potential for further growth.
“The prospects for the next year are fairly optimistic for white spirits,” says Arroyo. “The main challenge is likely to be strengthening the range with recognised brands like Belvedere, Cyroc, etc. Beyond this, we remain ready to serve our customers with a competitive price, quick response, prompt delivery and best quality products.”
Featured promotion: Smirnoff sales stirred by Bond
Three iconic brands – James Bond, Smirnoff and Dubai Duty Free – were brought together for a recent campaign surrounding the release of the latest Bond film, Quantum of Solace.
According to Smirnoff owner Diageo, the synergy between the three brands provided an ideal opportunity to reach Smirnoff’s key target markets and enhance perceptions of the brand. The current surge in premium vodka is complemented by the enduring appeal of Bond, particularly to males in the age group 25-40 – the most vital segment in Smirnoff’s targeting.
Tom Hickton, Diageo GTME brand manager, tells Frontier: “The key focus was the November 2nd launch of the travel- retail campaign in the region with the Smirnoff Black limited edition cocktail shaker. This was a stylish presentation of a sleek stainless steel cocktail shaker encasing a 70cl bottle of Smirnoff Black vodka. In partnership with DDF, we set out an intensive programme of support around the pack, emphasising the premiumisation potential not only for Smirnoff Black but also right across our vodka portfolio. The stylish retail environment at Dubai was the perfect backdrop for the campaign.”
The campaign at DDF incorporated a major emphasis on the quality of design and high quality materials, including the tailor-made bottle glorifier, cocktail recipe book, fixtures transformation, and special glorifier on current fixtures. There was also support in the form of staff training and extensive ATL advertising in inflight and regional magazines.
Meanwhile, the global Smirnoff/Bond marketing campaign encompassed a broadcast advertising campaign, on-and off-premise promotions, a public relations campaign, and digital campaign linked to the Smirnoff website.
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