MORE LUXURY TO COME FROM BACARDI AND DIAGEO

Last week, at the 42nd Annual Impact Marketing Seminar, Bacardi North America regional president Pete Carr discussed the group recent acquisition of Patron Spirits for  $5.1-billion, a deal that lifts Bacardi from the fifth-largest spirits company in terms of U.S. market share to the second-largest.

Moving forward, Carr noted, 75% the company’s business will center on three brands, split between Bacardi rum at 22%, Grey Goose vodka at 26%, and Patrón at 27%.
Turning to Bacardi’s core rum brand, Carr used the occasion to unveil a revamped and expanded upscale portfolio, with new Reserva Añejo Cuatro and Gran Reserva Diez expressions set to join Bacardi’s Reserva Ocho and Reserva Limitada. “We’re placing a huge bet on rum premiumization,” said Carr. “Rum is the last category to premiumize, and we think there’s a $550 million category opportunity.”

Carr went on to detail efforts on several other top-performing Bacardi brands, including Cazadores Tequila and D’Ussé Cognac, and explained the turnaround strategy for Grey Goose, concentrated on plans to hold price, focus on the on-premise, and attract younger LDA and multicultural consumers to the high-end vodka franchise.

Meanwhile, Javier Ferrán, chairman of Diageo, spoke on the topic “Marketing Luxury Spirits In A Changing World.” According to Ferrán, several factors are set to drive luxury spirits growth in the coming years, including a consumer propensity toward “drinking better rather than drinking more,” and the ongoing rise of the middle class in emerging markets like Asia and Africa. He estimates that more than 700 million new consumers in emerging markets will be able to afford international spirits within the next decade.

He also noted the importance of consistently maintaining—and taking—price. “A key driver of perception of quality is price,” said Ferrán. “Luxury goods brand-building is a long-term game.”

Source: ShankenDailyNews.com

D'USSE $275 XO EXPRESSION LAUNCHED IN MAY 2014

D’ussé Cognac XO comes after the VSOP.

Two years after launching the D’ussé Cognac brand with a VSOP quality, Bacardi is extending its product line depth by applying an upscale brand stretch.

Note the technical terms, i.e., upward and downward product line stretch, product line versus SKUS, product line width versus depth versus length.

When creating a luxury line or luxury brand, one has to always consider these issues of brand stretching. Now the important matter is: where to start from?

. Middle, then down, followed by up.
. or High, then middle, then low.
. or lower, then middle, and then high.

It depends if the brand carries a true luxury authenticity, the process should be Higher, middle and then lower.
If the brand is building on popularity and milking democratization for the sake of building Brand Image, then going from low to high make sense, i.e., business model of 'masstige'.

D’ussé XO, produced at the Chateau de Cognac (Otard) by maître de chai Michel Casavecchia, is made from a blend of eaux-de-vie aged at least 10 years. Bacardi introduced the XO to a small group of journalists and mixologists in New York last last May. Bacardi plans to cover 11 states in the USA by the end of the summer.

Bacardi has sought to position D’ussé as a modern spirit that can draw drinkers from both inside and outside the Cognac category, and says the VSOP ($45) has succeeded on that front in the early going.

Cognac D'Usse VSOP by Bacardi

With D’ussé’s new XO, Bacardi has taken an aggressive stance in staking out the brand’s ultra-premium credentials, price-positioning it significantly above the XO Cognacs of competitors like Hennessy, Rémy Martin and Courvoisier.
Retailing at $275 a bottle.

Source: dusse.com

News Video of Jay-Z Releasing His Own Cognac d'Usse with Bacardi

[youtube http://www.youtube.com/watch?v=HprSeU4LQp0&w=560&h=315]

Bacardi Publicly Announced Cognac D'Ussé (Henri D'Ussé) is their New Cognac and is Endorsed by Shawn "Jay-Z" Carter.

When Bacardi announced they were going to launch a cognac sometimes this summer 2012 in the USA (see, March 20, 2012 blog) I was not surprised as I knew they owned Baron Otard Cognac, and I thought this brand should have a bigger share of the American marketplace (still 50% of cognac consumption is in the USA). My surprise was that they stated they would not use the Baron Otard brand but rather create a new one. I really wondered why?

On May 9, 2012 Jay-Z attended a private event in New York to announce his endorsement of Bacardi‘s Cognac D'Ussé, a new VSOP cognac priced at $45 for a 750ML bottle.

Mr Carter also known under Jay-Z is expanding his list of endorsement deals in an attempt to become the first Hip-Hop billionaire. I cannot blame him.

There are five artists on the short list of soon to be billionaire: Sean "Diddy" Combs (rich from Vodka Ciroc, marketing firm, and clothing lines ...), Shawn "Jay-Z" Carter (rich from Rocawear clothing, Live Nation, Reebok, HP, ...), Andre "Dr. Dre" Young (rich from HTC headsets, ...), Bryan "Birdman" Williams (rich from Young Money Cash Money productions with Drake, Nicki Minaj and Lil Wayne, ...) and Curtis "50 Cent" Jackson (rich from VitamineWater ...).

So why have another cognac?

This is Jay-Z 2nd endorsement of spirits, he had previously invested in Scottish vodka Armadale. A Scottish Vodka!! drinkarmadale.com

He is joining Ludacris in this rappers’ cognac venture. Ludacris with Cognac Conjure made a huge impact when endorsing and carrying very personally Conjure everywhere he went www.conjurecognac.com. I remember very well when it happened as I was at Vinexpo 2009 yards away when they got their first launch party. It was let’s say different, different than Cognac Houses tend to do things. I thought to myself “why not!”.

Perhaps Bacardi was inspired by Conjure’s success and the fact the company behind the scene Park Street Imports, LLC is right on their door steps in Miami.

Cognac D'Usse, Henri D'Usse from Bacardi

One will have to explain why they are using the Croix de Lorraine which is (1) the symbol of Lorraine in France which is distinctively unrelated to the Cognac region and whose origin dates back to the French crusaders, (2) it is the symbol of France's resistance during World War II, but also (3) the symbol of the free army forces in WWII and (4) strongly associated with the General De Gaulle, President of France between 1959 to 1969.

My guess is they used this insignia because Jay-Z has long been associated with the champagne called Armand de Brignac also known as Ace of Spades champagne, which is using a very flashy glitzy gold and chrome bottles with a large conspicuous ace of spade logo. Now, with this experience rather successful why not using this concept again and place another big logo on the bottle of cognac, and 'voila' would say a proper Frenchman. They did it and they can do it again. It also reminds me of the type of bling bling hanging around the neck of rappers. I suppose it will do well with the obvious target.

Now, next question is ‘Why calling it Cognac ‘D'Ussé’? Everyone knows that in marketing a new product everything is hard enough that no one wants to had more difficulties as it is, and the number 1 rule is to have a name that the target market can remember, spell, and pronounce. Let’s add identify, relate, etc... Well, I do not think this is the case with ‘D'Ussé’ but perhaps this is the idea, kind of like Häagen-Dazs. I mean who can spell that made up brand owned under a collaboration of Pillsbury and Nestlé. Cognac D’Ussé will also be known under Cognac Henri D’Ussé, however it does not identify a particular living individual. Humm!! The plot thickens.

Perhaps, the inspiration comes from the famous castle from the Loire river called ‘Chateau D'Ussé depicted in Frenchman Charles Perrault’s fairy tales ‘Sleeping Beauty’ made famous by Disney.  www.chateaudusse.fr

I am also getting inspired now myself. Why not a Cognac Cinderella or Cognac Chat Botté? Charles Perrault’s other famous original fairy tails.

Bacardi owns the Baron Otard Cognac brand cellared in the Chateau of Cognac, a 15^th century building overlooking the Charente River in Cognac originally purchased by Baron Otard in 1796 and previous home of Francois 1er, king of France in the 14th century.

I am personally very excited by this news as it shows that cognac is becoming a growing spirit category and Jay-Z’s endorsement is sure to provide even more growing interests for the cognac from consumers internationally. The question is not about good or bad, but rather about keeping the cognac interesting. And it should do this. This marketing move does not win an award for originality but it does bring more buzz and that is what cognac needs. I cannot wait to try Cognac D’Ussé VSOP, and others qualities soon that will be coming after...

www.bacardi.com

www.baronotard.com

Bacardi is Thinking of Distributing Cognac Baron Otard in the USA

Bacardi Logo

Bacardi is a privately-owned spirit company controlled by the Bacardi family and founded in 1862. Originally from Cuba the family has moved a great deal between Cuba, Jamaica, Puerto Rico and Florida as the political situations changed and they had to adjust and moved to a safer haven across the years.

This company has much merit and is responsible for a great deal of contributions in the spirit industry but to some extent also in their political influences such as over Cuba, and cultural influences such as art. In the spirit industry they great contribution was to make rum a premium spirit by (1) filtering rums in such a way to increase its purity and (2) by aging rums to mellow them. For everyone Bacardi is synonymous to rum but they carry a strong list of brands often times leader in other categories. For instance, they own Grey Goose Vodka, Dewar's Scotch, Benedictine, Bombay Sapphire, and Martini & Rossi, and many more ...

Cognac Baron Otard Logo

In fact, they own Cognac Otard, or rather Cognac Baron Otard as it was re-branded at the end of 2011, but they have not sold directly Cognac Baron Otard  in the United States. Robert Furniss-Roe, president of Bacardi North America,  said Bacardi is trying to tap more into the dark side of spirits, launching its first cognac in the United States early this summer 2012. There is the possibility that they use a different brand even for the USA.

Source: Martinne Geller, March 14 2012 (Reuters)

www.bacardi.com

www.baronotard.com