A Talk with Constellation’s Jim Sabia
Wine & Spirits Daily had the chance to talk with Jim Sabia, the new Executive Vice President of Marketing for Constellation Spirits. Before joining Constellation a little over a year ago, Jim spent 17 years with Coors where he was the creator of Blue Moon and most recently served as VP of Coors and Coors Light.
One of the new up and coming brands for Constellation is Effen Vodka (trademarked as EFFEN Vodka), which continues to gain popularity in the United States. Jim shared some insights on Effen Vodka, along with other trends in the spirits industry. So sit back and relax, dear reader, as you are a fly on the wall.
Wine & Spirits Daily: Can you give us some background on Effen and how Constellation acquired the brand?
Jim Sabia: Effen Vodka, which is a Dutch word for smooth, even and balanced, was created in 2002 by a group of Chicago-based entrepreneurs. It was really interesting the way they went about developing this brand–they used bartenders’ insights. They talked to bartenders about what they wanted in a vodka brand and what they thought consumers would want in a vodka. What kind of brand could cut through the clutter and be successful? Every aspect of the product from the no-slip rubber sleeve to the taste profile was developed with these bartenders’ insights—it really was developed by bartenders for bartenders.
Effen Vodka and Effen Black Cherry were introduced in the market in 2003. By 2004, Constellation (then Barton Brands) formed a joint venture called Planet 10 Spirits with jstar, the brand’s developers. In January of this year, 2008, Constellation Spirits acquired the remaining 50 percent equity stake in the joint venture. That gives you a brief background on the brand, which is about five years old.
WSD: How is Effen performing in the U.S. market? Which regions is Effen performing best and where does it need improvement?
Jim: We’re very pleased with the performance of Effen. By looking at Food & Drug IRI data back four, 13, 26, and 52 weeks, Effen is growing double digits in each of those time periods, so we’re very pleased with the current performance of the brand. We continue to see growth in what I call our original core markets, the markets in which the brand was first developed. We’re also starting to see good volume trends in the other markets where we’re focusing our efforts.
WSD: Okay, great. Where do you see Effen in the next five years?
Jim: Well, we’re investing a lot of time, energy and resources on consumer research to truly understand our core user—what is it about Effen Vodka that they love, how are we are doing, and what can we do better? Our research indicates that we have a lot of loyal users, so naturally we want to hold on to them and attract new users to the brand, as well.
We’re looking at all different ways to engage our consumers and provoke their interest. I think that implementing our current go-to-market strategy will prove extremely effective for us. If we continue to execute our disciplined go-to-market strategy and use innovative advertising– like the “Effen is a five-letter word” campaign we’ve developed– we’re going to be in a good place in the next five years with this brand.
WSD: Obviously right now, vodka is immensely popular in the United States. As a result, it seems like a hard category to compete in because there are so many vodkas. How does Effen differentiate itself and how is it capitalizing on vodka’s success?
Jim: That’s a good question. I believe there were close to 60 new vodka introductions in 2007. There is a lot of competition, and we’re in the very active super-premium part of the segment.
One of the biggest brand assets is the liquid itself. The consumer research we’ve done really validates how great the liquid really is. We also feel that the influence of bartenders in the brand’s development helped a unique offering, not just the taste profile but the sleek packaging and the engaging name, as well.
WSD: Right.
Jim: Vodka represents almost 29 percent of the spirits industry--it’s a very popular spirit throughout the world because it’s a very versatile product. It’s a great canvas to be creative with.
WSD: Do you think vodka is just going to keep chugging along as the most popular spirit in the next 10 years or so? I know it’s hard to tell.
Jim: Yes, exactly. But we do think that its popularity will continue. In the foreseeable future, I don’t think it’s going to slow down. With legal drinking age consumers getting into the spirits category a little bit sooner than the previous generation, we see a big opportunity and upside for Effen. I think there is a whole new generation of consumers participating in the cocktail culture. For legal drinking age consumers in their early and mid 20’s, spirits are becoming an important part of the drinking repertoire —which is a great thing for us.
WSD: Absolutely. Do you see any other categories emerging in the spirits industry? I know there’s a lot of talk of whiskey getting bigger, brown spirits making a comeback and even gin…
Jim: We’re really excited about the bourbon and rum categories. Our 1792 Ridgemont Reserve is doing very well for us. It’s really reaping the benefits of the bourbon growth that’s going on. Research tells us that a lot of guys in their mid-20s are starting to experiment with bourbon and they’re really starting to make bourbon part of their brand portfolio.
As for rum, Olo, our new Brazilian super-premium offering, is showing great potential.
WSD: Is bourbon predominantly a male drink?
Jim: The category skews more male, that’s for sure, but there are also female users.
I think vodka crosses both, though, because it’s so versatile. You have females, you have males, you have younger consumers and you have older consumers. It’s such a versatile product, a big reason why it’s 29 percent of the spirits category.
WSD: What kind of toll is the current economic climate taking on spirits? I know we’re seeing a shift from the on-premise to the off-premise. Any insight you could give would be great.
Jim: We do see a slight downward shift in the frequency that consumers are visiting on-premise establishments, so as a result, off-premise traffic is up. In the super-premium category that Effen plays in, we’re doing pretty well. It might be because those consumers haven’t been affected by the economy as much as some of the mid or low-tier income consumers. I think it depends on the price segment you’re selling your products in.
WSD: Right. I would guess that Effen would be strongest in nightclubs and higher-end bars. Is that correct?
Jim: You’re right, we do very well in those types of accounts, but as the brand gains more acceptance and as we engage more consumers, we’re becoming available in the local corner bars, too.
We’re also making headway in our off-premise business, too. Effen continues to show nice distribution increases at local grocery and liquor stores.
WSD: Thanks for your time Jim.
Until tomorrow, Megan
“Discovery consists of seeing what everybody has seen and thinking what nobody has thought.”
Albert Szent-Gyorgyi
--------- Sell Day Calendar ----------
Today’s Sell Day: 9
Sell days this month: 21
Sell days this month last year: 23
This month ends on a: Fri
This month last year ended on a: Fri.
YTD sell days Over/Under: +1
WINE & SPIRITS DAILY
Subscribe or check back issues at: www.winespiritsdaily.com
Send news and comments in confidence to: megan@winespiritsdaily.com
© 2008 Wine & Spirits Daily, all rights reserved. May quote with attribution.
One of the new up and coming brands for Constellation is Effen Vodka (trademarked as EFFEN Vodka), which continues to gain popularity in the United States. Jim shared some insights on Effen Vodka, along with other trends in the spirits industry. So sit back and relax, dear reader, as you are a fly on the wall.
Wine & Spirits Daily: Can you give us some background on Effen and how Constellation acquired the brand?
Jim Sabia: Effen Vodka, which is a Dutch word for smooth, even and balanced, was created in 2002 by a group of Chicago-based entrepreneurs. It was really interesting the way they went about developing this brand–they used bartenders’ insights. They talked to bartenders about what they wanted in a vodka brand and what they thought consumers would want in a vodka. What kind of brand could cut through the clutter and be successful? Every aspect of the product from the no-slip rubber sleeve to the taste profile was developed with these bartenders’ insights—it really was developed by bartenders for bartenders.
Effen Vodka and Effen Black Cherry were introduced in the market in 2003. By 2004, Constellation (then Barton Brands) formed a joint venture called Planet 10 Spirits with jstar, the brand’s developers. In January of this year, 2008, Constellation Spirits acquired the remaining 50 percent equity stake in the joint venture. That gives you a brief background on the brand, which is about five years old.
WSD: How is Effen performing in the U.S. market? Which regions is Effen performing best and where does it need improvement?
Jim: We’re very pleased with the performance of Effen. By looking at Food & Drug IRI data back four, 13, 26, and 52 weeks, Effen is growing double digits in each of those time periods, so we’re very pleased with the current performance of the brand. We continue to see growth in what I call our original core markets, the markets in which the brand was first developed. We’re also starting to see good volume trends in the other markets where we’re focusing our efforts.
WSD: Okay, great. Where do you see Effen in the next five years?
Jim: Well, we’re investing a lot of time, energy and resources on consumer research to truly understand our core user—what is it about Effen Vodka that they love, how are we are doing, and what can we do better? Our research indicates that we have a lot of loyal users, so naturally we want to hold on to them and attract new users to the brand, as well.
We’re looking at all different ways to engage our consumers and provoke their interest. I think that implementing our current go-to-market strategy will prove extremely effective for us. If we continue to execute our disciplined go-to-market strategy and use innovative advertising– like the “Effen is a five-letter word” campaign we’ve developed– we’re going to be in a good place in the next five years with this brand.
WSD: Obviously right now, vodka is immensely popular in the United States. As a result, it seems like a hard category to compete in because there are so many vodkas. How does Effen differentiate itself and how is it capitalizing on vodka’s success?
Jim: That’s a good question. I believe there were close to 60 new vodka introductions in 2007. There is a lot of competition, and we’re in the very active super-premium part of the segment.
One of the biggest brand assets is the liquid itself. The consumer research we’ve done really validates how great the liquid really is. We also feel that the influence of bartenders in the brand’s development helped a unique offering, not just the taste profile but the sleek packaging and the engaging name, as well.
WSD: Right.
Jim: Vodka represents almost 29 percent of the spirits industry--it’s a very popular spirit throughout the world because it’s a very versatile product. It’s a great canvas to be creative with.
WSD: Do you think vodka is just going to keep chugging along as the most popular spirit in the next 10 years or so? I know it’s hard to tell.
Jim: Yes, exactly. But we do think that its popularity will continue. In the foreseeable future, I don’t think it’s going to slow down. With legal drinking age consumers getting into the spirits category a little bit sooner than the previous generation, we see a big opportunity and upside for Effen. I think there is a whole new generation of consumers participating in the cocktail culture. For legal drinking age consumers in their early and mid 20’s, spirits are becoming an important part of the drinking repertoire —which is a great thing for us.
WSD: Absolutely. Do you see any other categories emerging in the spirits industry? I know there’s a lot of talk of whiskey getting bigger, brown spirits making a comeback and even gin…
Jim: We’re really excited about the bourbon and rum categories. Our 1792 Ridgemont Reserve is doing very well for us. It’s really reaping the benefits of the bourbon growth that’s going on. Research tells us that a lot of guys in their mid-20s are starting to experiment with bourbon and they’re really starting to make bourbon part of their brand portfolio.
As for rum, Olo, our new Brazilian super-premium offering, is showing great potential.
WSD: Is bourbon predominantly a male drink?
Jim: The category skews more male, that’s for sure, but there are also female users.
I think vodka crosses both, though, because it’s so versatile. You have females, you have males, you have younger consumers and you have older consumers. It’s such a versatile product, a big reason why it’s 29 percent of the spirits category.
WSD: What kind of toll is the current economic climate taking on spirits? I know we’re seeing a shift from the on-premise to the off-premise. Any insight you could give would be great.
Jim: We do see a slight downward shift in the frequency that consumers are visiting on-premise establishments, so as a result, off-premise traffic is up. In the super-premium category that Effen plays in, we’re doing pretty well. It might be because those consumers haven’t been affected by the economy as much as some of the mid or low-tier income consumers. I think it depends on the price segment you’re selling your products in.
WSD: Right. I would guess that Effen would be strongest in nightclubs and higher-end bars. Is that correct?
Jim: You’re right, we do very well in those types of accounts, but as the brand gains more acceptance and as we engage more consumers, we’re becoming available in the local corner bars, too.
We’re also making headway in our off-premise business, too. Effen continues to show nice distribution increases at local grocery and liquor stores.
WSD: Thanks for your time Jim.
Until tomorrow, Megan
“Discovery consists of seeing what everybody has seen and thinking what nobody has thought.”
Albert Szent-Gyorgyi
--------- Sell Day Calendar ----------
Today’s Sell Day: 9
Sell days this month: 21
Sell days this month last year: 23
This month ends on a: Fri
This month last year ended on a: Fri.
YTD sell days Over/Under: +1
WINE & SPIRITS DAILY
Subscribe or check back issues at: www.winespiritsdaily.com
Send news and comments in confidence to: megan@winespiritsdaily.com
© 2008 Wine & Spirits Daily, all rights reserved. May quote with attribution.
posted at 3:30 PM
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