New Identity For Jim Beam
February 1, 2006
New Identity For Jim Beam
Jim Beam Brands Worldwide Inc., Deerfield, Ill., has changed its name to Beam Global Spirits & Wine Inc. The change reflects the acquisition of former Allied Domecq brands purchased from Pernod Ricard.
“This acquisition transformed JBB Worldwide into a new global leader in premium spirits, and made us a stronger player in U.S. wines,” said President and Chief Executive Officer Tom Flocco. “It redefined who we are, what we stand for and what we are capable of achieving in the future.”
The new brands make the company the fourth-largest spirits company in the world, and doubled its revenue from $1.2 billion to $2.5 billion. The company also has changed from one with sales predominantly in the United States to one with more global sales. Sales and distribution have shifted from almost 75 percent in the United States to a nearly equal split between the domestic and international. In addition, the company now has a larger, more diverse wine portfolio.
JBB Worldwide’s wine business now includes the former Allied Domecq U.S. wines and European fortified wines, as well as Peak Wines International. The products have been folded into a division called Beam Wine Estates, which now comprises the No. 5 super-premium wine business in the United States, with brands such as Clos du Bois and Geyser Peak.
Within the spirits portfolio are nine of the Top 100 premium spirits brands. Brands include Jim Beam bourbon; Canadian Club Canadian whisky; Courvoisier cognac; Laphroaig Scotch; Sauza tequila; Larios gin; Whisky DYC; Teacher’s Scotch; and DeKuyper cordials. BI
PepsiAmericas adds Nutrisoda
PepsiAmericas Inc. has purchased Ardea Beverage Co., maker of airforce Nutrisoda, and will collaborate with Pepsi-Cola North America to market airforce Nutrisoda in select markets with the possibility for future expansion.
The Ardea portfolio includes a line of nutritionally enhanced, low calorie, carbonated beverages. “The Nutrisoda brand complements our growing portfolio of healthier beverages, providing a unique and fashionable beverage alternative,” said Robert Pohlad, chairman and chief executive officer of PepsiAmericas.
“We knew we had the right product, but access to a strong selling system was critical to the long-term success of Nutrisoda,” added Joe Heron founder of Ardea. “With PepsiAmericas’ strong customer relationships, infrastructure, and quality of management, we are excited about the possibilities for Nutrisoda.”
Ardea will operate as a wholly owned subsidiary of Pepsi-Americas. BI
Tequila regulations relaxed
Mexico has dropped a proposed regulation that would ban bulk exports of tequila and require all bottling to occur in one of the five Mexican states comprising the tequila region. An agreement between the Mexican and U.S. governments was signed by Trade Representative Rob Portman and Mexico’s Secretary of Economy Sergio Garca de Alba.
“We are extremely pleased that the United States and Mexican governments have reached an agreement on tequila that will protect the interests of Mexican agave growers and tequila producers as well as U.S. bottlers and importers,” said Peter Cressy, president of the Distilled Spirits Council, Washington, D.C. “The agreement will ensure that the tequila sold in the United States market continues to meet rigorous Mexican standards.”
The spirits council had expressed concern that a ban on bulk shipments would have a serious effect on U.S. consumers and on the tequila market in the United States. Nearly three-quarters of the tequila imported into the United States is shipped in bulk form. Under the agreement, U.S. importers will be able to import bottled tequila from Mexico or bottle it themselves in the United States. BI
Molson Coors pulls back from Brazil
Molson Coors has sold a 68 percent stake in its Kaiser Brazilian operation to Femsa Cerveza SA for $68 million. The move has been expected as the Brazilian business has been struggling for several years.
“Last year, we committed to a strategic review of our Brazilian business,” said Leo Kiely, president and chief executive officer at Molson Coors. The transaction allows us to focus on our biggest markets and continue to deliver the cost synergies and other benefits related to the Molson Coors merger. It also represents a winning proposition for Kaiser in Brazil, as it further aligns branding, production, selling and distribution operations.” Femsa owns the largest distributor of Kaiser products in Brazil.
Molson Coors will maintain a 15 percent share of Kaiser and one seat on the board. Heineken NV maintains a 17 percent equity interest in the business.
“We think that Molson Coors likely decided to keep a stake in Kaiser because Latin America is ‘prime real estate’ for the global beer industry and Brazil presents a sizable opportunity,” said Citigroup analyst Bonnie Hergoz in a recent announcement. “We believe in order to be a true global player, a beer company needs exposure in Latin America because of growth potential in that region. Therefore, had Molson Coors completely exited this business, the brewer would have given up an opportunity that could have provided growth in the future.” BI
Costco wins round in distribution case
A recent Washington State court ruling came down in favor of Costco Wholesale Corp., which contended the state’s alcohol distribution law violated federal antitrust law. The state’s law allowed in-state beer and wine producers to ship directly to retailers, but out-of-state producers to sell products through wholesalers and distributors. The U.S. District Court ruling says the constitution requires equal distribution rights for all producers. Lawmakers in Washington have until April 14 to decide whether to give out-of-state producers the same direct-sales option as in-state producers or require all producers to use the three-tier system. BI
Consumer-generated buzz and alternate media spur most new product trial
The fourth annual Most Memorable New Product Launch Survey, 2005, conducted by Schneider Associates and Stagnito Communications Inc. indicates that the channels and methods through which consumers are absorbing new product messages are changing as the market continues to diversify.
“Conducting this study for the fourth year gave us a little bit of traction to observe what has changed since our first-time study in 2002, and one of the most interesting developments is that word-of-mouth has become one of the biggest resources for consumers to learn about new products,” says Julie Hall, vice president of consumer practice at Schneider Associates, Boston.
Although advertising spending rose 2.6 percent in 2005 to $275 billion vs. $268 billion in 2004, according to TNS Media Intelligence, consumers experienced less product recall than ever, with 57 percent of consumers polled unable to recall a single new product launched in 2005.
Of the products that did stick in consumers’ minds, the Xbox 360 and McDonald’s Fruit and Walnut Salad topped the list as Most Memorable new products in 2005, each garnering 23 percent of the vote by consumers. Other memorable new products included Coke Zero and Coke with Lime, Apple iPod and Tide to Go. Of the new products that consumers purchased in 2005, the purchase feasibility of ever-gulpable soft drinks led to both Coke Zero and Coke with Lime being the most trialed new products, followed by the McDonald’s Fruit and Walnut Salad.
“Consumers continue to be confused by the overabundance of soda offerings and the soda wars, but Coke Zero and Coke with Lime were both highly purchased items this year,” Hall says.
One of the most interesting developments discussed within the advertising industry in 2005 was that traditional commercial ads of 30 seconds are no longer as effective as they historically have been. Taking over are word-of-mouth channels, including Internet emanations such as blogging, and recommendations from friends and family, as well as a new emphasis on point-of-sale marketing.
In fact, the biggest jump in what motivates consumers to buy was toward “in-store display,” with 62 percent of consumers indicating point-of-sale marketing influenced their purchase decisions, up from 53 percent last year. The newest theory in industry advertising posits that consumers make a purchase decision for a new product within three to seven seconds of seeing that new product on the shelf, and the window of opportunity to influence that decision is vital, fleeting, and dependent on shelf marketing materials.
Endorsements from friends and family were significant in a consumer’s purchase, with 59 percent of consumers indicating they “usually try new products recommended by friends or family” and 65 percent “often recommending new products to family and friends.”BI