What makes certain premium brands pop? Two years ago Pernod Ricard launched New Brand Ventures (NBV), a division that aims to identify, acquire and grow such brands. Currently NBV is comprised of Del Maguey Single Village Mezcal, Plymouth Gin, Aberlour single malt, Monkey 47 gin, Powers Irish Whiskey, Smooth Ambler whiskey, and the French aperitif Lillet.
A number of these brands have become common to back bars and consumer’s shelves. What is Pernod Ricard looking for in premium brands that have growth potential? For answers we recently spoke with Jeff Agdern, Senior Vice President of NBV.
Kyle Swartz: What does NBV identify in a brand?
Jeff Agdern: Brands in the market today that are premium and super-premium. Brands with authentic stories and compelling propositions, and which are operating in the categories that interest consumers.
Take Monkey 47 Gin. There’s a resurgence in super-premium gin. It has an authentic story about the place where it’s produced, and has a global bartender affinity. We’ve only recently started to commercialize it in the U.S.
KS: What makes a brand pop?
JA: I think it’s a combination of factors. There’s no one sure formula. In today’s world, what’s important is the authenticity of a product’s story, the people who make it, especially if it is super premium, and the manner in which that story is told.
Packaging and naming both continue to be important. You have to be able to communicate a brand and its story in a way that’s distinguishable for consumers. And people need to be able to feel comfortable ordering the brand.
And brands that pop also need a little bit of fairy dust. There’s lots of great brands out there that have never become successful. There’s a lot of magic to the marketplace.
KS: How can wholesalers/distributors improve the way they handle premium brands?
JA: Look at the recent IWSR report and you’ll see that craft in the U.S. is growing by leaps and bounds. Who knows if craft spirits can ever be as big as craft beer, but certainly wholesalers should take notice
Wholesalers can evolve by adding craft specialization or craft divisions. They should recognize the business potential, look at the segment and the accounts selling it, and think about how they can develop specialized capabilities to service these accounts. They may not be the largest accounts but they are definitely emerging as profitable accounts, especially on a per-case basis.
KS: What was the thinking when Pernod Ricard purchased Del Maquey last year?
JA: This brand is an overnight success that’s 20 years in the making. It’s still a fairly new proposition, though, since it’s operating in a category that’s just now growing — and is helping lead the development of that category.
Mezcal is great for sipping or mixing, and has an unbelievable production and culture story. The sustainability aspect of it has really resonates with people. On-premise mixology is obviously a trend in the industry that’s been going on for years, and you could see bartenders gravitating towards the tequila category. Naturally they began exploring other agave spirits.
KS: What about Aberlour? The scotch category has been up and down recently.
JA: We believe Aberlour has the potential to break out and become a growth brand.
Scotch overall is a challenge, but single malts are still a growth area. Our view is that with scotch there used to be a very traditional way that customers took a whisky journey. They used to start with blended scotches and then work their way up to single malts. We don’t believe that’s the case anymore. Super-premium single malt has been democratized. People are drinking less but better, and making the leap across categories more and more. They’re starting in bourbon and then making the leap to single malt without the traditional journey through blended whisky.
KS: What’s in pipeline for NBV?
JA: We’ve recently repositioned Smooth Ambler’s Contradiction Bourbon, which has been 100 proof for $50, as 92 proof for $39.99. We wanted to make it a more accessible product because our supply at Smooth Amber has really come online in the last 12 months. We’re ready to ramp up commercialization of Smooth Ambler.
And we have a new item with Aberlour, a new triple-cask whisky for $60.