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Lynn M. Walding, Administrator

	e - NEWS
September 19, 2003

1. College Drinking Linked to Marketing

2. Smirnoff Aims for Bacardi’s Crown

3. MEXICO: Tequila Production Hits Low but Exports Up

4. US: Allied Unveils National Launch for Rum

1. College Drinking Linked to Marketing MSNBC News September 12, 2003
	Bingeing blamed on availability of cheap booze, study finds
	Janelle Kanovich, 22, of Harrisburg, Pa., drinks tequila poured for free by a bartender at a nightclub during her first night of spring break in Cancun, Mexico, on March 9, 2002.

Authorities who hope to curb binge-drinking among U.S. college students should consider controlling the marketing of beer and other alcoholic beverages near campuses, a new study suggested on Friday.

RESEARCHERS FOR the Harvard School of Public Health visited 830 bars, restaurants and nightclubs, as well as 1,684 liquor stores and other retailers that sell alcohol near 118 college campuses to see if there was any correlation between drinking habits and advertising or promotions.

What they found was high rates of binge-drinking on campuses with large numbers of outlets selling beer in volume packages, such as 30-can cases, kegs and “party balls,” or bars and restaurants offering frequent price promotions.

Long identified as a chronic problem affecting up to 40 percent of college students, binge-drinking has been blamed for a range of ills from poor grades, vandalism and sexual violence to full-scale campus riots. Nearly half of campus binge drinkers are underage.

“You’re not going to make great headway with college binge-drinking unless you address the issue of the alcohol environment that envelopes most colleges,” said Henry Wechsler, lead researcher and director of Harvard’s college alcohol studies program.

FIVE-CENT BEER

 “It’s not just the advertising dollars. It’s the five-cent and 25-cent beers, it’s the extra pitcher of beer for a penny, it’s the $5 refillable cup. It’s not simply that these things make people drink, but that they make people drink much more,” said Wechsler.

Wechsler defines binge-drinking as the consumption of five or more drinks in one sitting by a man, or four by a woman.

The Harvard study came on the heels of a report from the National Academy of Sciences, which recommended government officials combat underage drinking with higher alcohol taxes and curbs on television and magazine advertising.

But both studies came under fire as “neo-Prohibitionist” from the American Beverage Institute, a Washington-based lobby group representing chain restaurants. It blamed campus alcohol problems on “abusers” and said the Harvard study had shown no causal link between promotions and binge-drinking.

 “What they’re really looking for is a reduction of drinking among all Americans, including responsible adults,” said American Beverage Institute Executive Director John Doyle.

2. Smirnoff Aims for Bacardi’s Crown

Source: just-drinks.com editorial team

September 16, 2003

In one of the most radical overhauls of a leading drinks brand in years, Diageo unveiled the new-look Smirnoff last week. Chris Brook-Carter reviews the design and asks why the company is tinkering with a recipe that has brought so much success?

With over 17m cases sold of the core brand last year, 1.8 billion bottles of its spin-off-ready-to-drink brand shifted, 6^ volume growth and 8% net sales growth, Smirnoff vodka is one of the drinks industry’s most successful spirits brands of all time. Its packaging, marketing and overall brand strategy have been a recipe for success and as a result it is one of only a handful of brands every drinks company wishes it owned. If ever there was a case for the “if it ain’t broke, don’t fix it” cliché, Smirnoff is surely it.

And yet last week, owner Diageo unveiled a relaunch for Smirnoff that will span its entire product range and include new packaging, new advertising and an overhaul of its marketing. And neither is this the kind of tweaking the brand underwent some four years ago, when it attempted to differentiate itself from copycat brands, this is a significant makeover.

“The re-launch is at a time when Smirnoff is at its strongest position in its history,” says Andy Fennell, president of global marketing Smirnoff. “I can’t think of another consumer brand of this size that has delivered growth of this level.”

The announcement has sparked some speculation in the press that Smirnoff has been concerned by the continued growth of the super premium end of the vodka category, which has been eating into its overall market share. According to research by Deutsche Bank, the brand’s market share by volume has slid to 32% from 50% in 1990.

However, it is a theory Fennell dismisses. “That is not the big story,” he says. “If we have a foe its Bacardi.”

Diageo announced last year that it wished to claim the number one spot off Bacardi which has been the world’s largest global spirits brand for years now. Now it is hoped that this re-launch, which will include a 50% increase on the global marketing spend, including US$157m in the US alone, will do just that.

“In two years' time Smirnoff is predicted to overtake Bacardi overall in volume sales when including ready-to-drink products,” Fennell said.

The new packaging certainly hints that Bacardi and not Grey Goose or any of its super-premium vodka brethren is the target. Out is the classical, understated design that has become associated with top-end vodkas; in is a more brash and contemporary look. The bottle is tapered at the top, while the label is a bold, red and silver attempt to mix traditional Russian values with a more modern image. Anchoring it is the new Smirnoff logo – something you can be sure we will be seeing a lot of – which is a double-headed eagle that apparently takes its inspiration from awards handed to the original owner Pierre Smirnoff in the late-1880s.

“We updated our look to make a bold, contemporary statement about our category leadership and quality product. Our extensive research reveals that consumers associate the new packaging with a stylish brand and a good quality vodka and we’re delighted to satisfy consumer interest in distinctive, modern packaging at the same time.”

In short, this is a brand aimed at the clubbing generation rather than the purveyors of the top end style bars, where Grey Goose, Belvedere and the like hold sway. And certainly it is a design that will transfuse well into Smirnoff’s range of RTD brands, including Smirnoff Ice and Black Ice, when the new design is rolled out across the portfolio.

The company’s marketing activity will support this drive. Besides the television ads, which admittedly promote a more premium image by encouraging drinkers to “try the award-winning Smirnoff – neat” - a concept more generally associated with super-premium brands - a good deal of the focus will be on the Smirnoff Experience.

The Smirnoff Experiences are dance events hosted by the brand around the world. So far they have been held in 23 countries, although this number will reach 30 by the end of the year. “Along with our packaging and advertising, these events are just one more way we’re keeping the brands fresh and relevant to consumers,” says Fennell.

The Coors Brewers’ brand Carling has launched a similar initiative in the UK. “These types of events are likely to become increasingly popular methods of event marketing. Simple sponsorship often fails to provide brands with significant results and do not always guarantee increased brand awareness,” says the industry analyst Datamonitor.

By creating its own events, rather than sponsoring someone else’s, Diageo hopes to build stronger emotional bonds with consumers by being the source of the entertainment and benefit provided to the consumer.

Though the focus of the news has for once shifted away from the Smirnoff RTD products and back onto the parent brand, the likes of Smirnoff Ice and Black Ice remain integral to the overall strategy. The new design will be rolled out in the RTD range in February and March next year. And the company is currently testing its latest spin-off, a Smirnoff Twist RTD, which is available in about 15% of the US, primarily in the Northeast.

After a difficult year in the US, where the brand had declined 17%, Fennell says Smirnoff’s RTDs returned to growth during July and August, with the help of the launch of Smirnoff Black Ice. “We were very focused on growing the (RTD) concept and slow in renovating in core market. You want to renovate when it's got great momentum, something we didn’t do with Ice,” admits Fennell.

Renovating on the back of momentum is certainly something Diageo has done with the parent brand now. And it will now hope that momentum will gather the pace it will need to topple Bacardi from the top spot.

3. MEXICO: Tequila Production Hits Low but Exports Up

Source: just-drinks.com editorial team

September 18, 2003

Production of the Mexican spirit Tequila has fallen to its lowest level in eight years, despite the fact that exports are rising, according to Tequila Regulating Council figures in today's Mexican press.

In the first eight months of this year, output reached 83.5m litres. The previous low was in the same period in 1996 when it reached 86.4m litres.

However, in the same period this year exports were up to 69.5m litres. A total of 7.6m litres of that was 100% agave. Exports meant that only 14m litres were left for the domestic market.

4. US: Allied Unveils National Launch for Rum

Source: just-drinks.com editorial team

September 18, 2003

The US division of Allied Domecq is rolling out its rum-based drink Kuya across the country. The launch will be accompanied by its inaugural advertising campaign, in what the company is calling its biggest ever US product launch.

Featuring print, radio and out-of-home ads, the campaign features the question “Do Ya Kuya?” The ads will appear as “wild postings” and on billboards in key markets, and in such national magazines as Maxim and Stuff.

The product was introduced in 18 markets in May 2003, and it received faster and broader distribution than anticipated due to strong distributor and retailer enthusiasm, Allied said in a statement.

Allied Domecq supported Kuya’s initial launch with thousands of summertime “React to the Beat” on-premise sampling events and a full range of promotional materials. “These efforts, along with the extensive marketing support behind the national rollout, make Kuya the biggest product launch in Allied Domecq’s U.S. history,” said Barbara Jackson, Vice President, Marketing for Kuya and Kahlua at Allied Domecq Spirits, North America.

Kuya's "Do Ya Kuya?" campaign is one in a series of marketing campaigns launched by Allied Domecq for the upcoming holiday season. "The Allied Domecq brand portfolio is enjoying a 20% increase in advertising spend over last year, signalling our heavy investment in the brands people want - for celebrating, for entertaining and for gift giving," said Simon Cunningham, executive vice president, marketing, Allied Domecq Spirits, North America.