Above and beyond
August 15, 2008
“Sex and the City,” the television series that started the cocktail culture of the past decade, hit the big screen nationwide this spring. As the official spirits sponsor of the movie, Skyy Vodka took the show’s heroines, Carrie, Charlotte, Miranda and Samantha, and fittingly offered them in cocktail form. Cocktails like the Charlotte, labeled as “classy and conservative,” and the Miranda, marketed as “sensible and strong,” entered more than 3,000 on-premise accounts in a 30-day period.
San Francisco-based Skyy Spirits LLC, a subsidiary of Gruppo Campari, Milan, Italy, launched a multi-dimensional marketing campaign around the movie premiere, the largest global promotion Gruppo Campari has conducted in its 150-year history, says Bob Kunze-Concewitz, Gruppo Campari’s chief executive officer. With 75 Skyy Spirits’ sales representatives working with the company’s 133 U.S. wholesalers, more than 8,000 distributor salespeople touched Skyy Vodka during the promotion to support the brand’s connection to one of the most anticipated movies of the year, says Matt Davenport, Skyy Spirits’ vice president of sales.
“It was, as I call it, ‘all hands on deck,’ and everyone wanted to be involved with it,” he says. “…It was our team’s activation of those distributor salespeople to get out to the on-premise and retail trade and say ‘here’s something interesting we can put out.’”
Even without Skyy’s “Sex and the City” campaign, the company would have had its hands full this year. Last year, Gruppo Campari acquired X-Rated Fusion Liqueur, X-Rated Vodka and Jean-Marc XO Vodka from Daucourt Martin Imports. In January, Skyy expanded its portfolio with the addition of brands from Morrison Bowmore Distillers Ltd., a Scottish distiller owned by the Suntory Group, and Compañía Licorera de Nicaragua, the maker of Flor de Caña Rums. Early this year, Skyy also became the official marketer and distributor of 100-percent blue agave Cabo Wabo Tequila, created by rock icon Sammy Hagar. Throw in the House of Campari promotion and the 2008 Campari Calendar: Campari Tales featuring actress Eva Mendes, and Skyy Spirits virtually has no limit.
In 2007, Skyy Spirits reported $30.4 million in revenue. While the company’s portfolio is expanding beyond the vodka it was founded on, Skyy Spirits continues to focus on its two and a half million case Skyy brand. This year, Skyy introduced both a new bottle and a new line of flavored vodkas called Skyy Infusions.
“First and foremost, we are a vodka company,” says Gerry Ruvo, president and chief executive officer of Skyy Spirits LLC. “Two and a half million of our close to four million cases is Skyy Vodka. We don’t know how high Skyy Infusions is going to be as a part of that so those numbers could change dramatically. But we do have a different footprint today. We have acquired some brands that we thought were very, very strategic to us.”
Revolutionary and evolutionary
Fifteen years ago, the vodka category was not like it is today. The category was full of clear bottles and Russian heritage, Davenport says. The dull vodka scene left room for inventor and entrepreneur Maurice Kanbar to create an innovative product. When Kanbar decided his alcohol-related headaches could be connected to what his physician friends identified as congeners, he decided to remove them. Kanbar discovered that congeners were a result of the distillation process. Through a four-column distillation process, with the vodka distilled at a different temperature during each step, Kanbar extracted the impurities, and completed production with a three-step filtration process.
Skyy Vodka launched in 1992, and its iconic blue bottle followed a year later. The vodka set itself apart because of “its product attributes and style attributes,” Davenport says. “People were looking for something like that.”
Kanbar brought the innovation to the company, and “the people who worked here over the last 10 years created the style,” adds Ruvo, who joined the company in 1998. In 1999, Campari bought a minority interest in Skyy, and followed that by purchasing a controlling interest in the brand in 2002. In 2005, Campari acquired the rest of the brand.
“One of our goals was to find a very stable, unique international partner that can bring stability to our company, because it was owned by an entrepreneur â€” a very innovative man â€” but he wasn’t in the distilled spirits business, except for the invention of Skyy Vodka,” Ruvo says.
Gruppo Campari became a perfect partner for Skyy because it was international and it already represented the iconic Campari brand, Ruvo says. Skyy was beneficial to Gruppo Campari because it wanted another vodka in its portfolio and it was interested in a U.S. platform. Skyy Spirits operates independently as one of the four business units of Gruppo Campari, but on its two largest brands, Skyy and Campari, the Milan headquarters approves programs the U.S. subsidiary conducts.
For the brand that started it all, Skyy’s stylish, slightly luxurious appeal attracts 21 to 35 year olds. “It’s a little bit of luxury on an affordable, everyday basis,” Ruvo says.
Whether Skyy Vodka is showcased on-premise or on a consumer’s bar at home, the product looks great, Davenport adds. “People are proud to serve it, but it’s not snobbish. It’s an approachable luxury.”
Although Skyy Vodka offers a lot of style, it didn’t mean the bottle couldn’t use a fresher look. In April, Skyy debuted a new bottle shape with the launch of Skyy Infusions. After 15 years, changing the bottle shape isn’t a decision the company made lightly, Davenport says.
“In the marketplace, you can see this proliferation of packaging,” he says. “So vodka comes in every shape, size, frosted bottle, clear. We’ve got other blue bottles out there now. But we looked at it from this vantage point: ‘How can we stay with this consumer trend?’ What they are looking for is a sleeker look and something more modern. It was an evolution of the bottle. We didn’t revolutionize it. It doesn’t look tremendously different, but it just looks and feels more stylish and sort of richer.”
The taller bottle features broader shoulders that are a little square with a longer neck and a new cap. Changing the visual appeal of the bottle also took into consideration on-premise positioning and bartender needs, says Dave Karraker, director of public relations and events.
“They were looking for a bottle that was easier for them to handle,” he says. “And because it’s a little bit taller, it stands out a little bit taller on the back bar as well, which makes it easier for them to see it and grab it in a dark bar.”
Skyy Infusions released in April after two years of research, Ruvo says. Skyy had offered flavor varieties since 2001, but “they weren’t what we thought we should be doing in the flavor area,” he says. “They weren’t Skyy Vodka. They weren’t unique, different. They didn’t do for the flavor world what Skyy did for the vodka world.”
One of the ways the company decided to differentiate Skyy’s flavored line is through all-natural fruit infusions. “We found that by making it all natural that the fruit components really come through.”
Skyy Infusions uses a proprietary fruit infusion process that basically soaks the fruit, Ruvo says. Marketed as having a “true-to-fruit” taste, Skyy Infusions launched in Citrus, Grape, Cherry, Raspberry and Passion Fruit flavors.
Within Infusions’ first 30 days of launching, the line sold three times as much as its former flavored line delivered in a year. Coupled with Skyy’s “Sex and The City” promotions, Infusions is the most supported product this year. “We have spent a great deal of money to get to the consumer directly with the message of the all-natural infused proposition,” Davenport says.
In the beginning, Skyy Vodka benefited from being a unique proposition, and today the brand is enjoying growth from the popularity of cocktails in America as well, Ruvo says. The company couldn’t imagine a better promotional partnership for Skyy than New Line Cinema’s “Sex and the City” movie.
“Our target demographic fits perfectly with the movie,” Davenport says. “…They looked at us as a partner because of our stylish, innovative product line. It fit because they were a stylish and innovative product when they came out.”
While Skyy’s consumers are half male and half female, the core watcher of the movie is female. The movie’s female audience still works perfectly for Skyy because they are the consumers driving the cocktail trend. “For us it was a great fit and for them it was a great fit, because we complement that group, their lifestyle and the embodiment of that,” Ruvo says.
Skyy’s “Sex and the City” promotion allowed the company to communicate its vodka’s message through several touch points. In addition to product placement in the movie, Skyy ran outdoor, online and print advertising depicting the characters drinking Skyy cocktails while toasting a billboard of a Skyy Vodka bottle in Times Square. A consumer sweepstakes tied to the advertising and on- and off-premise promotions also gave fans a chance to win tickets to the movie’s New York City premiere in May.
Another angle of Skyy’s “Sex and the City” promotion was delivering the message to the trade.
“A huge piece of this and a major undertaking that we did was how do you partner with this movie and create relevant content for our trade partners,” Davenport says. “How do you sell one of a hundred vodkas when you are a distributor sales rep or you’re in a retail setting or when you are in a bar outlet? So we created specialty cocktails around the characters, and the ‘Carrie’ and the ‘Miranda’ were all based on Skyy vodka.
“For the trade, it gave them something to talk about, and it’s so important from that side of the business to get them excited rather than just another one of this or another one of that with very little richness or depth to what’s happening with the brand or why that brand is relevant to the consumer.”
With its great effort, Skyy is seeing great reward. Skyy announced on March 4 that it was the official spirit sponsor of the movie, and the company reported double-digit sales increases in March and April, Ruvo said.
“We can actually see the impact to our sales based on partnering with “Sex and the City” the movie, and seeing how our trade partners on both the distributor side and the retail level were extremely supportive. To them it was an exciting way to drive traffic to their store and to their bar and to create interesting content,” Davenport adds.
Houlihan’s Restaurant Inc., Leawood, Kansas, as well as bars and nightclubs nationwide featured “Sex and the City” promotions, activities and the specialty cocktails. Houlihan’s restaurants featured “Sex and the City” cocktails, promotions and giveaways on Wednesday nights during the spring, and reported to Skyy that Skyy Vodka sales were up 65 percent.
And the gifts keep coming with this promotion. The movie’s DVD launch is set for the fall, so Skyy will be supporting that with another round of promotions.
More to love
Delivering interesting content through the channels, such as Skyy’s “Sex and the City” promotion and Sammy Hager’s creation of Cabo Wabo, is important to Skyy, because it gives the bartender or waiter something to talk about, Davenport says.
“All of the brands have stories behind them, have content, have richness and deliver depth beyond just product attributes,” he says. Cabo Wabo provides a perfect example of a brand with an interesting background. Cabo Wabo Tequila originally was created by Sammy Hagar to serve in his Cabo Wabo Cantina in Cabo San Lucas, Mexico. Hagar partnered with a small Mexican tequila-maker, the Rivera family, to create a tequila made from 100 percent weber blue agave. The tequila portfolio includes Cabo Wabo Blanco, Reposado, Anejo and ultra luxury Cabo Uno.
“We had to own a tequila in America, so that’s why we went after this Cabo Wabo brand, which we thought, like Skyy, was very unique because it had about a 15 year history as well,” Ruvo says. The ultra-premium tequila offered the luxury and irreverent positioning that Skyy was looking for.
“Cabo Wabo Tequila is certainly one that we see incredible growth in,” Davenport adds. “We’re seeing great growth this year, and we project that brand will be a major brand going forward.”
While Cabo Wabo is the fun tequila story, X-Rated Fusion Liqueur portrays a fun, sexy and provocative marketing approach. The pink liqueur, created for women ages 21 to 35, is a blend of French vodka, blood oranges, mango and passion fruit. The liqueur’s unique nature lends itself to be consumed as shots, but in other areas, it’s mixed with tonic, Davenport says.
X-Rated is a proprietary brand for Skyy that stands out on its own like Campari, Ruvo says. “In vodka, you have to do something very distinctive, unique and innovative,” he says.
The liqueur and its premium sister product Jean-Marc XO Vodka were acquired from Daucourt Martin Imports, a company founded by spirits creator Jean-Marc Daucourt and Todd Martin, former Allied Domecq North America president. Jean-Marc XO is a handcrafted luxury vodka distilled nine times in pot stills with each batch micro-oxygenated for smoothness. The vodka retails for more than $60 per 750-ml. bottle. Skyy Spirits further expanded its portfolio with brands from Morrison Bowmore Distillers Ltd. and Compañía Licorera de Nicaragua.
Skyy Spirits also holds distribution agreements with Suntory International for Midori Melon Liqueur, Zen Green Tea Liqueur and The Yamazaki Single Malt Whisky; Berry Brothers & Rudd for Cutty Sark and The Glenrothes; and C&C International for Carolans Irish Cream, Tullamore Dew Irish Whiskey and Irish Mist.
While Gruppo Campari owns Glen Grant, which is a popular whisky brand in Europe and a few other markets around the globe, it is not distributed in the United States. Skyy Spirits, hence, offers Scotch whiskies Cutty Sark, the company’s top-selling whisky by volume, and The Glenrothes; Irish Tullamore Dew; and Japanese Yamazaki Single Malt Whisky. The addition of Morrison Bowmore allows Skyy to offer whiskies from a different area of Scotland than the other brands represent. Skyy serves as the only U.S. importer, distributor and marketer for Bowmore Islay Single Malt Scotch Whisky, Auchentoshan Lowland Single Malt Scotch Whisky and Glen Garioch Highland Single Malt Scotch Whisky.
“We have a very international selection of whiskies, and we eventually, probably sometime in 2009, look to bring Glen Grant to the United States,” Ruvo says.
Skyy Spirits also now is importing, distributing and marketing Flor de Caña Rums from Compañía Licorera de Nicaragua, which are often referred to as the single malts of the rum category, the company says. The rums are divided into two brand groups: Flor de Caña Rums of 4, 5 and 7 years make up the Slow Aged Collection, and Flor de Caña Rums of 12, 15 and 18 years comprise The Centenario Collection. Flor de Caña Rums, the largest selling rums in Nicaragua and Central America, hold a base in five markets in the United States, including California, Florida and Texas, Ruvo says.
The expansion of Skyy Spirits’ portfolio is part of its strategic expansion strategy to broaden its offering of super-premium and luxury brands in the highest-growth spirits categories, the company says. The goal is to not only provide consumers with the widest selection of products available, but to also create long-term value and profitability for all of Skyy Spirits’ distributors, retailers and distribution partners.
“Today in America, you need to be in vodka, tequila, rum, proprietary and whisky,” Ruvo says. “You need a very deliberate profile strategy to make a wider footprint in America.”
Skyy Spirits also markets Gruppo Campari brands Campari and Ouzo 12. In addition to Campari’s annual calendar promotion, the brand also hosts House of Campari, a program that highlights the work of emerging artists. The event this year opened at the end of May in New York City, and featured Campari cocktails and burlesque and musical performances tied to a visual arts exhibition.
Selling the story
The trend of people treating themselves to the indulgent side of the cocktail culture continues, even through the economy’s downturn, Davenport says.
“They aren’t ordering low-end products when they go out, so they still have that indulgence when they go out. For us, we’re perfectly positioned to deliver that for both our premium and our ultra-premium portfolio,” he says.
“We still see premiumization going on and we’ve done a lot of work on creating that imagery here in the United States. We see that trend going on certainly in the high-end restaurant segment,” Davenport continues.
And for the mid-tier restaurant segment that is seeing a slowdown, the pressure is on for them to deliver too, he says. “When people aren’t coming as often, they need to make sure that experience is rewarding when they are there. So that’s where the trade has got to make sure, when things get a little tighter, that you still have to deliver interesting content.”
In the trade, Skyy Spirits’ sales team sells the whole line, but it also has specialized groups within its sales force that are luxury brand specialists. The extremely high-end products like Jean-Marc XO, The Glenrothes and Bowmore take more education to sell, Davenport says.
“Those people need to know why they are spending this much money for that product, and also it is to give the bartenders that ability to convey that message and that content that may be a little more complicated than Skyy Vodka,” he says. “The beauty of Skyy Infusions is that the message is easily transferable just from looking at the bottle. ‘All natural raspberry â€” I get it. I know what that is.’ But something like Jean Marc XO Vodka that is distilled nine times in France, there needs to be some explanation of why they use four specific wheats.”
Skyy Spirits’ whisky brands are organized into a group called the World Class Whisky Portfolio. “We obviously, historically are known for being a vodka company, and we’re synonymous with the cobalt blue bottle,” says James Burton, brand director for whiskies and Flor de Caña. “What’s interesting is that we’re now able to present ourselves really as whisky experts, and we are becoming category managers within whisky.”
This spring, the whisky group launched a World Class Whisky program, a trade initiative that allowed Skyy Spirits to present itself to the trade as whisky experts, Burton says. “The catalyst for us was bringing on the Morrison Bowmore brands,” he says. “…That really completed our whisky portfolio and allowed us to show to the trade that we have whiskies in every category, basically. The potential exists to introduce that into a consumer proposition next year.”
Skyy Spirits also has teams that promote high-energy accounts for products like X-Rated and Midori. The different sales teams allow Skyy Spirits to foster trends, place the brand into relevant accounts and provide direct feedback to the company, Davenport says.
“A big part of why we have that team is that we bring them in to meet with our marketers,” he says. The sales teams relay what the trade is saying about a product when a rep gives them the marketing message, what the message means to them, how that message is transmitted to the consumer and how the consumer is ultimately drinking it.
America’s 10th largest distilled spirits company by volume understands the challenges of the growing number of spirits in the marketplace. “It’s a tough economy right now, but products of this nature that Skyy sells are affordable luxuries that people can enjoy every day,” Ruvo says.
Reaching consumers is exactly what Skyy plans to do. Ruvo plans to take Skyy Vodka to four million cases, and introduce new Skyy Infusion flavors along the way. Skyy Spirits is satisfied with its lineup on the distributor and importing side, but isn’t above acquiring more brands.
“We seek out brands and let Campari know,” Ruvo says. “We go after brands, but we go down a very specific path.”
And although Cabo Wabo, Flor de Caña, X-Rated Fusion Liqueur, Jean-Marc XO Vodka and Morrison Bowmore are relatively small brands today, Skyy Spirits has big plans. “We are going to polish them and we’re going to drive these brands like we’ve driven brands like [Skyy],” Ruvo says.