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MALT WHISKY: Ain’t nothing but a number

01 September 2008 By db staff writer

Instead of chasing ‘younger drinkers’, whatever that means, Ben Grant says that Scotch brands should put age to one side and segment consumers by their mindset, a far more revealing and effective approach

As a late 20-something Londoner, compiling the marketing news pages of the drinks business each month leaves me feeling like a man under siege. The task involves sifting through a pile of press releases to discover what type of marketing activity brands are lining up, how much they are spending and, crucially, who they are targeting. The answer to the first two questions varies massively; the answer to the last, however, is almost always the same: me.

Whether we’re talking beer, wine or spirits; standard, premium or deluxe, drinks brands are utterly obsessed with us “young consumers”. Our pockets are over-flowing with expendable income (ha ha!); we have active social lives where drink is a key element; and we have long lives of potential brand loyalty lying ahead of us. It’s easy to see why market managers liken us younger consumers to some kind of holy grail. But it’s not as simple as that. On the flipside, we are bombarded by a tidal wave of brand communication (drinks, remember, are just one of many sectors doing battle for our wallets), so it takes a pretty spectacular effort to stand out from the crowd.

As I skim through yet another press release from yet another brand popular with older consumers, explaining how they’re investing seven figures in a stunningly slick piece of marketing that will make it a sure fire hit with the youngsters, I can’t help but wonder if it might just be another million quid down the drain.

I was recently sharing a dram with a single-malt brand manager who works with one of the most impressive marketing departments in the business. He was mulling over the question of how he can appeal more readily to younger drinkers: funkier packaging perhaps? Or why not push cocktails in the hip young style bars? What about hiring an über-cool Hoxton agency to develop a slick new online presence? They were all valid ideas, I agreed, but I began to wonder why on earth this brand – which enjoys an incredibly loyal following among traditional whisky drinkers – is so preoccupied with wooing a notoriously brand-promiscuous demographic who will probably have turned their attention to the next flash-in-the-pan vodka by tomorrow. “If it ain’t broke, don’t fix it,” goes the old adage, but does it ring true for single malt? Should brands be looking to tap into a younger demographic, or should they just concentrate on ensuring their existing, loyal drinkers are well served?

It’s important to recognise that the high average age of whisky drinkers is something of a British phenomenon – in Russia, for example, it’s well established as the tipple of choice for successful young professionals. In the UK, however, it’s widely perceived as an old man’s drink. Why? Well, it’s obvious really. It is an old man’s drink. In the mind of most young people, whisky is Dad’s drink. And Dad may be many things, but he’s certainly not cool. There’s also the question of discovery: “Young people want to find their own products,” says Ian McLeod marketing director Ian Weir, “that’s the psychology when you’re growing up.” As they discover the world and seek to define themselves through the products they consume, young people might be happy to follow their peers, but they certainly don’t want to follow in the footsteps of their fathers.

“Single malt is all about discovery and exploration,” says Robert Ransom, sales and marketing director for Glenfarclas (which is, he says, “rather a traditional, old school brand”). It’s not a category that consumers are expected to understand or appreciate immediately, indeed the journey of discovery is probably the most attractive aspect of the spirit for those who have come to love it. Tarja Tuunanen, brand manager for market leader Glenfiddich, agrees, explaining that “there’s a natural progression of products that consumers are interested in”. And single malt lies a long way down the track of discovery.

But while a laissez faire attitude – waiting for consumers to grow into the category of their own accord – sounds nice in theory, the hard reality is that to safeguard its long-term future it’s essential that Scotch tickles the fancy of the next generation. “The traditional drinking occasions will gradually peter out,” warns Glenmorangie brand director Mark Harvey, who argues that brands must therefore be targeting both younger consumers and women (a study of this second group surely merits its own article – watch this space).

YOUNG AT HEART

Many in the Scotch industry are considering how they can spin their product in order to attract a younger audience, but a few pioneering companies have come up with an altogether more radical strategy: creating new brands targeted specifically at this demographic. It’s a shrewd move, according to Robert Ransom, at Glenfarclas, who explains that “it’s easier to create a new brand than to change the target audience for an existing brand”.

William Grant & Sons and Ian McLeod Distillers have broad portfolios incorporating a range of traditional single malts, and a number of these brands are considering how to appeal to younger drinkers (not least Grant’s market-leading Glenfiddich). However, with the launch of Monkey Shoulder and Smokehead, respectively, they are aiming to bridge the gap by not merely accepting young drinkers into the malt whisky fold, but aiming directly at them.

“We identified an opportunity to engage them with dark spirits,” says Monkey Shoulder’s Rob Curteis. “There’s a natural progression to whisky as the palate matures, but we wanted to speed up that process.” The thinking at Ian McLeod was similar, as marketing director Ian Weir explains: “It’s a big jump from white spirits or bourbon to the traditional looking single malts … so we have created a stepping stone.” In order to occupy this territory, the key has been presenting the product in a different way. In terms of the flavour, both products are very much the real deal; they have not compromised on taste or complexity, meeting young consumers half way by producing insipid, puny whiskies. Smokehead, it should be noted, is an Islay malt, so displays typically challenging medicinal/iodine notes – a compromise it most certainly is not.

While the whisky itself remains true to tradition, they way they are presented is dramatically different from the rest of the malt category. The two brands are packaged in slick, stylish bottles, both of which have won awards for their innovative design. They are distributed widely in the style bars, and both have made an effort to push the mixability message. The language with which they communicate – the voice of the brand – is also subtly different. To appeal to younger drinkers, says Curteis, “brands need to talk in a different way,” to be more “personable”. To highlight this, he points out that “even banks are talking in a more friendly language” when addressing these consumers.

But perhaps the most telling factor about these two brands is the fact that while they are looking to the future, they’re both very much rooted in tradition. Smokehead’s packaging is young and funky, “but it uses a hint of copper, the font reflects a very old printing press”, and the words that dominate the bottle are highly evocative of Scotch tradition. Monkey Shoulder, meanwhile, derives its name from an affliction that affected the maltmen, (the traditional Scotch industry’s answer to today’s office worker affliction, repetitive strain injury). History and heritage are highly important to younger consumers – a fact borne out by the strategies adopted by Bacardi, Jack Daniel’s and Stella Artois, three of the most popular brands among this demographic. As both Monkey Shoulder and Smokehead have recognised, it’s possible to successfully pluck an imaginary malt whisky brand out of the sky in a marketing meeting. But in order to ensure success, it must not just look to the future, but also doff its cap to the past.

>Long-term approach
Rob Curteis, whose Monkey Shoulder brand is performing a valiant role as a stepping stone into single malts (see box, right), agrees, arguing, “There’s consensus in the industry that we must appeal to the next generation, or the future of Scotch is under threat.” It’s clearly a priority for those with the budget to target a new demographic: according to Tuunanen, 15% of Glenfiddich purchasers today are under 35, but “we definitely aim to increase this”. And the subject has even registered on the radars of the old guard. “Long-term we need new drinkers coming in,” laments Ransom, “we’d love to target other consumer groups, if we had the resources.”

So there’s a tacit understanding that Scotch must broaden its horizons – but are younger drinkers the most logical target? Or, for that matter, is age actually a relevant factor? “How should we be defining ‘young’?” asks Harvey. “It definitely has a different meaning in whisky than in other categories.” And to prove the point, just consider what you’ve just read about Glenfiddich: the market leading brand defines under-35s as “young” drinkers, but (to take an admittedly extreme example) I imagine that the Bacardi Breezer marketing department would consider a 34-year-old to be virtually geriatric.

Rather than obsessing over date of birth, the category must instead be segmenting by mindset. This is a far more revealing defining feature, which will give much more insight into what makes the consumer tick. Just to reinforce the futility and ineffectiveness of age-based segmentation, Weir explains that hip and trendy Smokehead receives a surprising level of online interest from over-55s. Glenfarclas, meanwhile, is picking up new consumers by organising tasting sessions at universities: traditional, yes, but youthful too.

It’s perfectly possible, therefore, to bring a large fraction of the under-30 demographic into the fold, but the critical factor is their individual mindset; how they perceive the category and what aspects of it whet their appetite. They are people who are naturally inclined towards whisky, so the category must stick to its guns and be ready to welcome them when they have made the journey. Any attempts to adapt in order to woo them will surely end in failure. Consistency is the key.

Consistency of message
One of the factors that has catapulted Glenfiddich to the top of the category sales chart is the fact that it has found favour among many different types of consumer. They are all, says Tuunanen, “equally important” to the brand, but they react to different stimuli, “so we need to have different approaches to different groups.” This involves highly targeted relationship marketing, which differs greatly from group to group.

However, at the heart of all communication, “it must be the same Glenfiddich message that we deliver. It’s essential that we ensure consistency.” The savvy marketers at Moët Hennessy have also cottoned on to this necessity. As the box (right) makes clear, Glenmorangie is certainly turning its attention to various different consumer groups, but Harvey stresses that consistency is crucial. It’s “clumsy” and “dangerous” to lose the consistent voice and messaging at the heart of the brand’s DNA.

As long as a brand stays true to its roots, there’s no reason why it should alienate the core consumer group when it begins to address a new audience. “It’s a question of getting the balance right between the traditional and the contemporary,” says Weir. “You mustn’t go all out to attract a new audience,” and ignore the loyal audience, “but as long as it’s balanced there’s no reason why it’ll alienate traditional consumers.” Curteis, meanwhile, takes it a stage further, arguing that far from being alienated by younger consumers entering the category, traditional consumers are delighted to welcome newcomers into the fold. “Established whisky drinkers love the category so much that they want to see new consumers enjoying that experience.”

THE GLENMORANGIE MODEL

Glenmorangie is well entrenched as an established favourite in the single malt category. The brand enjoys a loyal following among the older consumers who make up whisky’s core consumer group, but recent activity indicates a strong desire to make inroads with a younger demographic.

Glenmorangie’s parent company, LVMH, is by far and away the world’s leading luxury goods producer with a portfolio that boasts the most prestigious names in jewellery, fashion and fragrance. The company also controls the lion’s share of Champagne. Surely, if any company has the marketing nous (and, ahem, budget) to lure aspirational younger drinkers into the single malt category without rocking the boat with the traditionalists, then this must surely be it. Brand director Mark Harvey makes no secret of his desire to lower the average age of his customers. It’s a conundrum that continues to confound the industry, so how does the world’s number one luxury goods marketing department plan to succeed where others have struggled (or not even tried)?

Moët Hennessy has been incredibly successful at selling booze based on lifestyle associations. The company’s Champagnes, in particular, have created a massive buzz not by concentrating on the liquid itself, but communication that aligns the products with an aspirational lifestyle. Incidentally, Harvey was previously brand manager for Dom Pérignon. Such messages, he says, resonate very well with the younger generation, and if you don’t believe him just consider the massive popularity of lifestyle-obsessed vodka. “Generally, the malt category has been too focused on product messaging, rather than marketing outside the bottle,” he argues. “There needs to be a balance. It would be a mistake to focus 100% on lifestyle statements … you mustn’t ignore the product credentials. But you can and should include both.” Crucially, he says, it is possible to include both elements within a single marketing execution.

When Glenmorangie was rebranded last year, the change was pretty dramatic. The update of the packaging may have been relatively modest, but basing much of the brand messaging around the kaleidoscope – a flavour wheel presented in fully ostentatious psychedelic glory – was about as far removed from the standard tartan and heather imagery as you can get. One of the first moves for the reconfigured brand was to strike up a deal with Esquire, sponsoring the magazine’s annual awards and ensuring editorial coverage of new product developments. And looking forward, Harvey reveals that a number of plans are in place to raise the brand’s appeal with fashionable young hipsters in the coming year.

The brand is working hard with the style bars to increase exposure as well as driving whisky-based cocktails (see the last issue of The Spirits Business for more). Larger formats that ensure a particularly theatrical serve have also been developed for the style bars and clubs. And Harvey is also forging partnerships with some 250 high-end city pubs – “the kind of places where professional young guys and girls go drinking on a Friday after work” – to increase visibility in an arena where there has previously been very little.

What’s immediately clear about all of these strategies is that they’re not exactly reinventing the wheel: they are all simply trying to ensure that the product is present in the places where its target consumers are drinking, and is talking in the language that they understand. Easy really – so long as you’ve got the budget.