SPIRITS BUSINESS

REINVENTING SCOTCH

A couple of twenty-something managers at a small Wisconsin liquor store are playing a big role in recasting Scotch as a hip, fashionable, easy-to-quaff drink for young adults throughout the country.

The two managers, Rick Streed and Anders Carlson, had been cutting, pasting and hand-painting signs promoting J&B Scotch for the 1,500 sq. ft. Badger Liquor store in Madison when their work was spotted by a creative director at ad agency J. Walter Thompson. Before long, the duo was being paid by the agency to craft J&B’s new print campaign — an extension of their original in-store poster art (see sidebar).

Call it desperate. Call it inspired. The simple fact is that some of the most exciting, unexpected and intriguing advertising in the entire distilled spirits business is occurring in, of all places, the Scotch category. Ads and related promotions from several of the leading blended Scotch brands are, in that overused favorite of marketers everywhere, truly “breakthrough.”

These new advertising campaigns are part of a large and ambitious marketing drive to recruit younger consumers. The various creative efforts, ranging from the hip, edgy and retro to the more sophisticated and whimsical, all seem destined to resonate with their respective 21- to 35-year-old target consumers.

At the same time, several marketers are tossing aside the “country club rules” of Scotch usage — neat, on-the-rocks or with a splash of water — in favor of a more radical mixology: Scotch with Coke, Mountain Dew, lemonade, ginger ale or just about anything else that appeals to the sugared sensibilities and sweet palates of 21- to 35-year-olds. It’s about breaking down some of the category’s traditional taste barriers and leveraging some of the beverages this crowd already mixes with their Jack Daniel’s, Absolut, Jim Beam, Bacardi, Captain Morgan, Crown Royal and other fashionable brands.

“There are a lot of individual brands going out to recruit a younger consumer. Inadvertently, it’s turned into a major effort,” observed Bob Dubin, Seagram’s commercial director, Scotch whisky, North America. “Whatever individual brand messages are out there, the consumer is hearing a collective message” that Scotch is the drink for them.6803A

A new eye-catching campaign for Cutty Sark includes print, outdoor, on- and off-premise p-o-s as well as sponsorship of 240 concerts with bands including Godsmack and Chicken Shack.

While each of the leading brands faces its own particular challenges, the general dilemma confronting the category is this: a disproportionate share of Scotch drinkers are men 50 and older, most of whom will consume less as they continue to age. Compounding the problem is that they haven’t been replaced by new consumers. Thus, Scotch consumption has declined from a peak of more than 22 million cases (mixed) in 1979 to 8.4 million cases (mixed) or about 9.5 million cases (9 liter) in 1998, according to the authoritative Adams Liquor Handbook. And while the actual consumption of Scotch declined 62% during that period, the category’s share of total distilled spirits consumption dropped from almost 14% to less than 7%.

Nowhere is this quandary, as well as the category’s new direction and future potential, more starkly revealed that in the fortunes of two brands, Cutty Sark and J&B. In their heyday, these brands sold millions of cases a year. In fact, in 1978, J&B was the category leader with annual sales of about 3.5 million cases. In 1998, however, J&B had sales of approximately 615,000 cases while Cutty Sark recorded sales of 285,000 cases. Although many factors contributed to the erosion of these brands, including pricing and distribution tactics partly unrelated to their inherent consumer appeal and perceived value, the simple fact is that J&B and Cutty are not the brands they once were. But that is likely to change. With little downside risk, both brands are making big strategic shifts.

The new J&B campaign forgoes traditional Scotch advertising imagery in favor of an off-the-wall, primitive poster-art style that heralds “J&B + Cola” in almost all its executions. The campaign is currently in six test markets (Denver, Boulder, Madison, Milwaukee, San Diego and Providence) where the brand is now posting double-digits gains.

“The tone and feel of this advertising is so radically different,” says Michael Stoner, vice president and product group director for J&B and single malts at Schieffelin & Somerset. “It breaks through the clutter in the right kind of way. It’s irreverent, fun and all about J&B and cola. And it’s well-targeted against a hard-to-reach, beer-drinking male audience.”

Cutty Sark is also redefining itself to fit in with the tastes and lifestyles of its new consumer target: 21- to 30-year-olds. Marty Fettig, the Skyy Spirits brand director on Cutty Sark, explains that “historically, blended Scotches positioned themselves as premiums within the category. But the advent of single malts has pushed blends down in prestige. Blends can either fight that or take a more middle-of-the-road attitude and positioning — kind of the Budweiser of Scotches — and that’s where we’re positioning Cutty Sark. We’re targeting the mainstream regular guy.”6803C

“Sit back. Pour glass. Survey Kingdom. Chivas Regal, When You Know” is one in a series of new ads aimed at late 20-year-olds and early 30-year-olds.

As a result, Skyy is promoting non-traditional usage including Cutty and Coke, Cutty and lemonade, Cutty sours and Cutty with any mixer that appeals to younger drinkers.

To reach these younger drinkers, who typically know little, if anything, about Scotch (except that maybe their fathers or grandfathers drank it and that it’s not particularly relevant to their own lives), Cutty Sark is focusing on two areas of special interest to men — women and music. Over the past few months, Cutty Sark has sponsored more than 90 concerts featuring up-and-coming rock and roll acts. The venues are typically smaller clubs that provide the brand with good consumer sampling opportunities.

In addition, Cutty Sark has gone back to the future to develop some of the industry’s most visually arresting and instantly memorable advertising. The premise is simple: a campy sendup of 1950’s calendar girls in tastefully provocative poses aboard yachts (a nod to the brand’s traditional nautical imagery) along with a discreetly placed bottle of Cutty.

With less at stake than their larger counterparts, it is easier for brands such as Cutty Sark and J&B to make dramatic shifts and oversized bets. The risks are greater, however, for the bigger, growing or higher-priced brands — Dewar’s, Johnnie Walker, Chivas Regal. Nonetheless, these three brands also recognize the need to aggressively go after younger consumers and have developed new marketing programs to reach them.

Late last year, Dewar’s (annual sales close to 1.4 million cases) introduced a dual advertising campaign. One campaign, called “Profiles for the New Millennium,” focuses on user imagery. The second, called “The Highlander,” concentrates on the product and its heritage. Spending for the two campaigns is set at more than $20 million in the first year.

The Profiles effort is a re-working of the long-running “Dewar’s Profiles” campaign which was dropped in 1993. This time around, instead of featuring older, established individuals, the ads feature younger groups of people, albeit successful, but still on their way up. The ads are aimed at 25- to 35-year-olds “who are ready for a change in what they drink.” As Marshall Dawson, marketing manager for Dewar’s explains, “We want to appeal to those consumers who are at a transitional point in their lives. We want to offer them a brand proposition that makes sense as they approach new branches in the road of their lives.”

The Highlander campaign is a more offbeat and humorous effort that brings the brand’s famous highlander icon to life in a series of unexpected ways. In one execution, for example, a shirtless, sunglass-wearing highlander is shown with a surfboard under his arm.

Meanwhile, a U.S. adaptation of the recently launched global advertising campaign for Johnnie Walker (“Keep Walking”) is being developed for a planned debut this September when the current “Civilization” ads will be retired. As with Dewar’s, 25- to 35-year-olds are in the crosshairs of the new effort. According to Elizabeth Sorota, Schieffelin & Somerset’s senior brand manager for Johnnie Walker, the brand already enjoys a substantial edge over its superpremium Scotch competitors among 25- to 40-year-olds, with that age group constituting about one-third of Johnnie Walker’s total consumers.

Nonetheless, Sorota says there is a real need to “build a stronger bridge” to a younger demographic. “The problem with Scotch now is that although consumers perceive it as masculine and somewhat associated with success, it’s also seen as somewhat solitary and outdated. It’s the drink your father drank and still drinks, and younger consumers don’t identify with it. They certainly don’t identify with it the way they do with bourbon.”6803E

Johnnie Walker’s “Civilization” ads run through September when a U.S. adaptation of the global “Keep Walking” campaign is expected to debut.

Noting that the new advertising “will be a very sophisticated campaign,” Sorota adds that with the U.S. being “very multi-ethnic, our challenge is to make (the new advertising) very important to all our constituencies and ethnic markets.”

Mixing Scotch and cola has also long been popular among blacks. It is a practice that has contributed to the success of Hennessy Cognac, a brand Sorota worked on for several years. “Hennessy is an ethnic business trying to be a mainstream business,” she says, “and there are some similarities with Johnnie Walker. Hennessy has had success in the African-American market partly because “they’re not afraid to mix it” with cola and other soft drinks.

Cola, however, isn’t necessarily a panacea for every brand of Scotch. For instance, concerned about protecting its aspirational positioning, high prestige and super premium pricing, Chivas Regal is reluctant promote cola as a mixer. “We have to maintain the image of the brand,” says Seagram’s Bob Dubin. But that doesn’t mean Chivas isn’t reaching out to younger consumers with contemporary adaptations of traditional cocktails, a new advertising campaign and media buys targeting a younger audience.6803B1

The iconic Highlander comes alive in a new series of Dewar’s ads that focuses on the product and its heritage.

Last fall, Seagram rolled out a new global campaign with the tag line, “When You Know.” The ads are intended to talk to a successful and streetwise thirty-something consumer dubbed, the “newly grown up.” These are consumers who are reaching a stage in their lives where they have achieved some success and have enough money to indulge themselves in “a more grown-up premium spirit.”

According to Joseph Tripodi, chief marketing officer, The Seagram Spirits and Wine Group, “Chivas Regal is casting off its ‘for formal occasions’ image to re-emerge as the ‘must have’ premium spirits choice among the contemporary and stylish.” Adds Mike Spurling, Seagram group head, Scotch whiskies, “We’re saying that for those that can appreciate it, Chivas really is the best; it’s something highly desirable, and a brand to aspire to. It’s what counts for the people who know.”

While Scotch marketers have long acknowledged the need to rejuvenate their franchise, the combined initiatives of these leading brands represent the most comprehensive, dynamic and on-target effort to recruit younger consumers in the past two decades. This year and next, assuming the brands maintain their creative focus and continue to increase spending, may well mark a real turning point for Scotch in the U.S.

As Seagram’s Bob Dubin notes, “The efforts of one brand alone won’t do it. But over time, with a consistent message from all the brands and a considerable amount” of spending, total Scotch consumption will increase. “But it’s a long-term effort on the part of all distillers to change attitudes.”

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