Blog Entries

Hitting a Moving Consumer

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Category: General Blogs  |  Tags: soda

Beverage marketers today are faced with the ongoing challenge of finding their way through the ever-growing thicket of media opportunities and getting their ads watched by consumers. Boy, how times have changed since the ’70s when Coke tried to teach the world to sing or offered Mean Joe Green some refreshment! Yes, things were relatively easy back then when there were just a handful of channels and no internet.

Actually, beverage brands, at least for now, have been relatively lucky. While many viewers already record their favorite shows and fast-forward through the commercials, they still tend to tune in to live television events, especially sports. And, as we all know, beer and soda go great with that Sunday game.

But advertising against live sporting events can only go so far. So increasingly, beverages have turned to YouTube, video games, smart phones and any number of other emerging media to reach consumers.

But now comes word that many of the major brands have a lot of work to do when it comes to at least one of these powerful new channels—YouTube. According to a study from digital media company Touchstorm, large beverage brands like Coke are trailing smaller brands when it comes to harnessing the powers of YouTube for marketing. In fact, only 74 brands rank among the top 5,000 YouTube publishers in the Touchstorm Video Index: Top Brands Edition. Says Alison Provost, CEO of Touchstorm:  “With only 74 brands appearing in the YouTube top 5,000, it’s clear there’s a significant brand fail on one of the most important platforms today. YouTube has provided a content testing ground where celebrities, users, brands, content producers, retailers, and YouTube stars all have the same tools available to attract audiences. And while brands can afford to buy views and advertise their content, they’ve made very little progress in the organic viewership ecosystem.”

Among the study’s key findings:

  • •Big brands need to study small brands. Blendtec is in the top 10 yet Coke and Pepsi are not; the Mormon Church ranks yet top global brands Apple and Microsoft do not; Ford Models ranks higher than Ford Motors and Little Tykes overwhelms Toys ‘R’ Us.
     
  • Brands need to define the competition broadly. The other 4,926 publishers, which include musicians, teenagers with webcams, and professional content producers, have vastly out-performed brands in finding an audience for their content.
     
  • Brands can’t spend their way to the top. About one-third of the brands made the list by buying a significant amount of YouTube advertising, but the other two-thirds got there through organic growth.
     
  •  International brands build audiences. Brand channels from Brazil, Latin America and Japan make the list, beating out tens of thousands of English-language brand channels.
     
  • And finally, there are two routes to the top. Some brands made the list on the backs of a viral video or two; others made it by publishing less spectacular content more regularly.

The list of 74 brands that place inside the top 5000 channels on YouTube is available at Touchstorm.com.

I'm Making a Spirited Plea

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Category: General Blogs  |  Tags: alcohol

I was walking the floor at the Holiday Buying Show in New York, jotting down notes and sampling a few brands when I was approached by a woman with a clipboard and a handful of Japanese beverage brochures. She must have had a keen eye for media as the word “press” on my attendee badge would have been barely visible from more than a handful of feet.  “Would you like to taste Japanese spirits?” she asked me. Of course I would.

I was intrigued and impressed by her assertiveness—I’ve been to literally hundreds of trade shows and beyond a few stray hired hands unenthusiastically handing out postcard-size flyers promoting particular exhibitors, marketers rarely venture out beyond the confines of their booths to proactively increase traffic at their stands. As I learned when I reached the array of saké producers at the Japanese beverage alcohol pavilion, shochu marketers are really determined to broaden awareness of their venerable spirit to U.S. consumers and beyond.

I definitely have had my share of exposure to the drink. A few years ago I spent an evening at a shochu bar in Tokyo, where a local gentleman, who was eager to practice his English explained that younger Japanese (legal drinking age) consumers are moving away from saké—something they view as their parents’ drink—and toward shochu. That’s part of the reason why there’s such an opportunity in the U.S. for sake because it still has relatively low awareness and market penetration here and virtually nowhere left to go on its home islands.

One of the challenges stateside saké marketers have been facing is a lack of distinguishable branding—there’s a great deal of visual homogeneity among many of the brands on my local store’s shelves (not to mention, difficult-to-pronounce names for Westerners), despite the fact that there are amazing variations in flavor. As I mentioned in a previous column, that’s starting to change as marketers bring dynamic design elements and simple, memorable names to their products. There are similar hurdles for shochu marketers. But I do think that will change for shochu too, as importers ramp up their marketing efforts and continue to figure out how to market in the U.S., beyond the specialty shop and Japanese restaurant or izakaya.

Of course, bottles need to contain accessible products and I’m convinced that once more legal-drinking-age consumers sample shochu they’ll be converted. On the rocks most are remarkably drinkable with tremendous flavor complexity. Those made from barley provide a good bridge for whiskey drinkers. Those made from rice are good for those who’ve already discovered sake, as many of the aromatic elements are reminiscent of their rice-based cousin. And then for something truly unique and delightfully complex, there’s shochu distilled from sweet potatoes. Meanwhile, rum drinkers might find brown sugar-based shochu appealing.

I hope to see shochu—and the hotbed for shochu production, the Japanese island of Kyushu—represented at a larger number of industry trade shows with even more foot traffic from curious distributors and retailers. Kanpai! 

Coke’s Secret Weapon Is Not So Secret

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Category: General Blogs  |  Tags: soft drink

During a time when there’s been a lot of bad news for our leading soft drink company, there’s been one overwhelming positive, and that is the man at the very top: Muhtar Kent.

It appears to me that Kent came along at just the right time for Coke. His style of leadership is what this company, embattled in so many ways these days, really needs. In fact, Kent, a true man of the world, has become the face of Coke today during a time when Coca-Cola really needed a benevolent presence to counter all the criticism it is taking almost on a daily basis.

Look at Coke today and it’s almost as if there are two companies constantly being featured in the news: the one we see bashed every day for problems like the obesity epidemic, and then the one that is increasingly found on the world stage as a responsible, even admirable global citizen. Credit for much of the latter goes to Kent.

If you don’t know that much about Kent, a little background. Mark Pendergrast, in his definitive history, “For God, Country & Coca-Cola,” calls Kent: “The ultimate international Coca-Cola man,” and goes on to detail how he has worked for Coke since the age of 25. He was born in New York City, the son of a Turkish general consul, Pendergrast details, was educated in private schools in Turkey, and also lived in Thailand, India and Iran while his father was an ambassador in those countries. He speaks fluent English, Turkish, Italian and French, writes Pendergrast, who goes on to add that “at 6’1”, Kent has a commanding, tough nonthreatening presence with a friendly, gregarious demeanor.” Pendergrast also says that Kent’s father apparently served as a strong role model for the young Kent, describing him as having a “strong humanitarian bent.” In fact, during World War II he helped save Turkish Jews from the gas chambers while serving as consul general in Marseilles.

Such a humanitarian bent is quite evident when looking at Kent’s piloting of the huge multinational conglomerate that is Coke: when he is advocating for women’s empowerment around the world, or appearing at the Clinton Global Initiative (CGI) Annual Meeting—as he did just as I was writing this in late September—to make a global partnership announcement with other multi-national organizations to bring safe water access, basic necessities and employment opportunities to communities around the world.

If there’s any criticism to level against Kent, it might be that the U.S. business seems neglected with all of his international focus. After all, the cola business Coke was built on is struggling to reverse consistent declines. It could be argued Kent needs to confront head-on what is ailing the U.S. soda business with the energy and verve he has confronted these other global issues.

Nevertheless, I recently asked Pendergrast what he though about Coke’s recent leaders and he responded: “I think a huge amount of credit goes to those two men. Neville Isdell turned the ship in the right direction, and Muhtar Kent is powering it full steam ahead.”

Going Native

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Category: General Blogs  |  Tags: spirits

How can you not be enamored of a state that has more barrels of an aging spirit in it than it does people? That’s what drives my newfound love affair with the Commonwealth of Kentucky—Louisville in particular. I recently took a trip out to the Bluegrass State to explore a little bit of bourbon country, as well as Louisville’s Urban Bourbon Trail. I had always managed to idealize and romanticize the region in my mind, like I do a lot of places very beverage centric. But I have to say it really lived up to my expectations, and them some.

I was in awe of the sprawling operation that is the Buffalo Trace Distillery in Frankfort, Ky, with its industrial architecture and equipment that appears to have been largely untouched—save for some automated control and monitoring stations—since the period immediately following the repeal of Prohibition. But I also enjoyed the more intimate affair that is the Willett Distillery in Bardstown, where the scent of aging bourbon in charred-oak barrels inside tin warehouses knows no equal.

The bourbon renaissance has enabled 77-year-old Willett to resume distilling activities for the first time since the early ’80s (It was still aging and bottling in the interim, just not distilling at its Bardstown site).

Those were the dark ages for bourbon. The spirit had been seen as “your grandfather’s drink.” The spirits market as a whole was on a similar downward trend a couple of decades ago.  

But thanks in part to the premiumization trend, those days are very much over. Super-premium whiskey has been helping pull the spirits category up to the tune of 3 percent year-on-year. Whiskey alone was up nearly 7 percent last year, thanks not only to the single malt Scotches and Irish whiskeys, but to bourbon and Tennessee whiskey as well. The American offerings’ volume was up nearly 10.5 percent in 2012, according to the Distilled Spirits Council. Super-premium spirits in general enjoyed the greatest gain of all the price segments, up nearly 9 percent last year.

There’s no better time than now for consumers to celebrate bourbon and there’s really no better place to do it than Kentucky. No other region of the U.S. is more closely aligned with a beverage alcohol product than Kentucky is with bourbon. And before every California wine maker cries foul, I argue this because the varietals that are produced there, by and large, did not originate in the U.S. They don’t call bourbon “America’s native spirit” for nothing.

And no other American city showcases its signature beverage better than Louisville. Five years ago, the Louisville Convention & Visitors Bureau created the Urban Bourbon Trail, a network of bars and restaurants in which one can enjoy the native spirit, for just that purpose. There are currently 27 stops (and counting) across Louisville.

It’s clear that bourbon’s time has (once again) arrived and not just in Kentucky. The Urban Bourbon Trail is really just part of the global bourbon trail as aspirational and curious consumers worldwide embark on their own journey.    
 

Cause and Effect

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Category: General Blogs

My parents may be getting up there in age, but that hasn’t slowed them down just yet, especially when it comes to warning their children about the latest health “study” they heard about on the news or through some email chain.

Those of you who are regular readers of this column know by now I can be quite prickly when it comes to many of these so-called “studies.” It’s come up before in this space because, unfortunately, as anyone associated with the beverage business knows, this industry take the brunt—especially lately, but this has been going on for decades—of these ominous health warnings.

There are too many of them, and they are announced too frequently to even begin to summarize here. But it does seem that the so-called “experts” have smelled blood in the water when it comes to certain segments of our industry and they have converged on it like a swarm of feeding sharks.

The parental warning I refer to above was slipped in right at the end of a recent phone call with my mom, tucked in so nonchalantly I almost missed it as I was hanging up: “Oh, and don’t forget that drinking more than four cups of coffee a day can take years off your life!”

My reply was a typical, rolling-of-the-eyes, “What in the world do you mean?” as my fingers started automatically Googling the relevant keywords into my iphone’s browser (I’ve been to this rodeo before). Eventually, I did find the study, but a little more investigating immediately showed what I expected. The study itself lacked the standards that would support one that was respectable. I happened to have dinner with a friend later that evening who had studied statistics in college, and he explained the difference between a good study and a bad one. The good find causation between two things, the bad ones just correlations. Unfortunately, many of the studies we hear about today and get tossed around so often by the mass media are based on correlations, not causations. The coffee study is a good example.

In that case, it found that those who consume more than four cups of coffee a day and are under the age of 55 have a tendency to die at a significantly younger age than those who drink fewer than four cups of coffee a day. This was sloppily bullhorned by the media as showing a real link between consumption of more than four cups of coffee by those under 55 and early death. But a little more study of this study and you start to see it unravel. There was no real causation between the coffee drinking and the early demise, just a correlation. It just happens to be that those who drank that much coffee, in that particular age group, happened to die younger. The study didn’t take into account anything else: Did they have more trouble sleeping and needed caffeine to stay awake, for example? Did they tend to have extreme Type-A personalities?

Were they dealing with heavier workloads and have more stressful lives as a result? Did they consume a delicious donut with every cup of coffee?

If we as an industry are going to fight back against these poorly conceived studies, it’s important we know how to set their authors, the media—and, yes, even our parents—straight. I tried, respectfully, and as gently as possible with the latter, at least.