Research on Spirits

The purpose of this post is to distillate key facts about spirits. I personally use this information to challenge the current assumptions about Shopper Decision Tree of this category. Which is the right order to merchandise these subgroups? Which attributes are relevant for the Romanian shopper?  


Whisk(e)y


Irish Whiskey is made in the following distilleries:

•  Midleton (Jameson brand)
•  Bushmills (Bushmills brand)
•  Cooley

Types of Scotch Whisky:

• Single malt whisky - one whisky from one distillery, distilled from 100 percent malted barley.
• Single grain whisky - one whisky from one distillery, distilled from one grain or a mixture of grains
• Vatted or blended malt whisky - the traditional Scottish blended whisky, consisting only of single malt whiskies, which may come from more than one distillery
• Blended grain whisky - made of a mixture of grain whiskies
• Blended Scotch whisky - a blend of whiskies, commonly made of 20 to 40 percent single malt whisky plus 60 to 80 percent grain whisky

Well-known Scotch Whisky brands: Johnnie Walker, Ballantine's, Famous Grouse, Dewar's, Glenfiddich.


American Whisky:

• Bourbon Whiskey (Jim Beam brand)
• Tennessee Whiskey (Jack Daniel's brand)

Gin


Types of Gin:

• London dry gin - Bombay, Bombay Sapphire, Beefeater
• Holland gin (jenevre)
• German gin (steinhager)

Vodka (Wodka)

• Ultra-premium brands - Belvedere, Grey Goose
• Premium brands - Absolut, Wyborowa
• Medium brands - Finlandia, Stolichnaya
• Value brands - Smirnoff

Tequila - spirit from agave (aka maguey).


Types of North America beverages:

• pulque - made before the arrival of Europeans
• mezcal - strong wine made by invading Spanish
• Tequila - distilled spirit

Aging the Tequila:

• Blaco (silver) - un-aged Tequila
• Joven (gold) aka suave, abocado - un-aged Tequila with flavours
• Reposado (aged) - stored in barrels from 2 to 12 months
• Anejo (vintage aged) - aged in barrels for three years
• Extra Anejo (ultra aged) - aged in barrels for minimum 4 years

Rum - spirit made from sugar cane.


Aged rum:

• silver rum (white rum)
• light rum (golden rum) - aged minimum one year
• dark rum (reposado) - agen minimum three years.

Arak is a beverage made from sugar cane popular in Middle East, Central & Southern Asia.

Caipirinha - Brazilian cocktail made up from sugar, lime juice and cachaca (medium-bodied cane-juice).


Brandy


Types of brandy:

• wine brandy
• fruit brandy
• pomace brandy

Varieties of pomace brandy:

• grappa, bagaceira - in Italy
• aguardiente, ourip - in Spain
• marc, eau-de-vie - in France
• dop - in Netherlands
• Testerschapps - in Germany

French brandy:

• Cognac
• Armagnac
• Calvados

Regional types of brandy:

• grappa in Italy
• slivovitz in Poland
• metaxa in Greece
• pisco in Peru
• vinars in Romania

Another popular Greek spirit is Ouzo, which is similar to Absinthe. It’s a brandy-based wine flavored with anise that turns milky white when water is added.

Liqueurs

Absinthe - made from wormwood

Amarula - made from tree fruit

Cointreau - primary flavour being orange

Irish Mist - made from whiskey

Jagermeister - made from licorice

Kahlua - made from coffee

Limoncello - made from lemon

Curacao - made from orange

Triple Sec - primary flavour being orange

Sambucca - elder bush

Amaretto - from pits and kernels

Campari - best known bitter

Zwack - Hungarian bitter

The Menu Magician

I am impressed by the insights shared by Gregg Rapp here. Gregg describes himself as Restaurant Consultant - specialized in Menu Profitability. His job is to make clients buy more expensive items on the menu.

It's surprising to find out that most expensive new items on a restaurant menu can boost revenues, even if nobody buys them. The reason is that people use to buy the second most expensive item on the list - and use the most expensive item for comparison.

Can this insight be applied on designing the assortment of a Convenience category? Is it worth for a retailer to invest in stock for expensive articles and this to have a positive impact on the category profitability? The most appropriate for this should be the low-frequency high-involvement categories like cream&lotions, premium alcoholic products, consumer electronics and white goods.

Category Vision & Category Drivers

Category Vision

Having a Category Vision means driving long term sustainable growth. Category Vision is a clear statement of what the future drivers of the category will be and how will they influence the value of the category.

By pushing the category to grow through these drivers, you will get a disproportionate gain of the growth.

What should be considered when developing a category vision? The key factors that affect how this category will be shopped in three to five years time are:

• macro trends: growth of envromentals factors and aging population
• consumer trends: rise of individualism between consumers
• market dynamics: growth in organic or decrease in artificial segments
• suppliers’ iniatives
• retailer and/or manufacturer pressures: governamental initiatives

Good vision statements are BELIVABLE, CHALLENGING, MOTIVATING, SHORT & MEMORABLE, EXCITING, and SET DIRECTION.

Category Drivers

Category Drivers are consumer or shopper-led changes in consumption or purchase that will be responsible for a step-change in category growth.

Bringing it to life

Full implementation of Category Vision of Drivers include touching of these ares:

• Winning with Consumers
• Portfolio & Innovation
• Brand Positioning
• Consumer Communication
• Winning with Shoppers
• Poit of Purchase Vision
• Range & Merchadising
• Price & Promotion
• Winning with Retailers
• Channel & Customer Understanding
• Organisational Capability

The Paradox of Choice

"As the number of choices keeps growing, negative aspects of having a multitude of options begin to appear. At this point choice no longer liberates, but deliberates. It might even be said to tyrannize" (Barry Schwartz - The Paradox of Choice).


Making shoppers to chose your products it's like making TV-zappers to watch your ad. 


First of all, you have to be on their shopping path. Shoppers chose the store format depending on their shopping mission (bulk shopping, top-up, emergency shopping just to name the basic ones). A manufacturer has to make sure that it focuses on the right channels with its products. On average, shoppers visit only 30% of the shelves of a store - even if they declare that they visited "everything".


Secondly, your category has to be easily reachable. People don't want to consciously think in-store. If they have to stop to figure out where should they go next - they get confused, frustrated and may skip a category.


Once shoppers are close to your category, you have to make them stop to review the assortment. If it's a destination category - that's very easy. But if your category is preferred or convenience you have to work really hard to make it noticeable.


After shoppers shoppers stop to chose their product - how can you make sure they buy something? Easy: by clearly segmenting the shelf according with decision tree. It's difficult to chose between 200 deodorants & 20 brands. But it's more easier to chose between 30 antiperspirants aerosol and 5 brands. 


Less choice is sometimes more choice.

Point of Purchase

Today I learned one of the most comprehensive definitions of Point of Purchase (POP):

Point of Purchase is the decisive moment when all previous marketing activities stand or fall" (Marketing Week).

The Point of Purchase is any place when a product or service can be bought. It refers to all elements within or around that place. Therefore, when we talk about POP we refer at: fixtures, gondola ends, checkouts, stack displays, central alleys, refrigerators.

The POP is extremely important as 70% of the decisions are made at POP level. Generally speaking, for FMCG categories:

• one third of the decisions are solely made outside of the store - the shoppers come with the item in mind and leaves with the same item in shopping basket;
• one third of the decisions are made at shelf levels. Buying decision was taken because the item "was seen on the shelf";
• another third of the decisions are a mix of the two influences - decision is switched at POP. Shoppers come into the store to buy a certain brand or format and leaves with another item.

There are two moments of truth for a brand interaction with the shopper / consumer:

• first moment of truth is at shelf level - when the product is bought
• second moment of truth is at home - when the product is consumed.

It's very clear that if the first moment of truth is not won by a brand, the second do not exist anymore; here lies the untapped power of trade marketing.

30 seconds speech

Vaccines market in Romania

These days I face a different type of challenge: at which stage is the vaccines market in Romania and what can be done to speed it up?

I'll start with an overview of the market. As far as I know from public information, we talk about a 50 mil EUR market in 2009. From Ziarul Financiar, we know that the market is concentrated.

So, the main players are Sanofi Avensis, GlaxoSmithKline, OM Pharma & Wyeth. 

Let's understand a little bit the route to markets. From a logical point of view, vaccines could be distributed via:

• pharmacies
• family doctors
• private clinics (like Medsana, Medlife)
• public hospitals
• national campaigns (although this is as through public medical system)

Due to refrigeration needs, these kind of products can't be stocked everywhere, so a medical warehouse should carry them and deliver them quickly - a just in time policy is a must.

I'll come back on next posts with additional findings.