Malibu Sunshine is the latest innovation coming from Pernod-Ricard's Malibu rum brand, following Malibu Black (70 proof version), Malibu Prepared Cocktails and Malibu Red (a combination of rum and tequila). It is an important part of their strategy as innovation helped the brand post sales growth of +5% in the U.S. during the third quarter (3 months ended December 31) after years of posting softer gains. Nowadays it is all about offering consumers variety, and so far they're still biting.
We spoke with Malibu brand manager Lisa McCann, whose team shifted their positioning on Malibu flavors to look at it in a more conceptual light. "We have a line of flavors that does well for us, but" they realized that "maybe we need to rethink flavors and what consumers do with flavors.. We started to think about what Malibu represents as a brand and it's Sunshine. This is our big step into conceptual flavors."
Sunshine is a Citrus flavor that "fits well" in the concept, she said. "We've also taken the step of changing the color of the liquid" to yellow, and changed the packaging and design to better represent the sunshine imagery. "It's going to give consumers something a little different with what they're used to seeing from Malibu."
Malibu Sunshine will start shipping to distributors in the next few weeks, and is expected to hit shelves in May. It will be line priced with the rest of the flavor series.
While the traditional Malibu flavors "have done a little bit better at the off-premise," Lisa sees an opportunity for Sunshine at the on-premise "because we have a colored liquid" that will allow for "interesting colored cocktails."
SUNSHINE AT MELTING POT. In fact, Malibu Sunshine has already been featured in a signature cocktail from national restaurant chain The Melting Pot, called Sunshine Sangria. It is a light, bubbly version of white sangria, a blend of Malibu Sunshine Rum, Chambord Raspberry Liqueur and Luccio Sparkling Moscato. "Malibu Sunshine is a new product and we're one of the first restaurants to test it on a large scale," Paul Brown, the beverage manager for Front Burner Brands, the restaurant management company for The Melting Pot Restaurants, Inc., told WSD.
Signature cocktails, along with craft beer, has been a focus for The Melting Pot since "we're continuing to see strong interest" in both categories. "We believe these segments will only grow stronger as the economy improves," Paul continued.
As for cocktails, it's all about "interesting spirits and fresh ingredients." For example, they're also testing a new Blood Orange Margarita that features Avion Silver Tequila, Solerno Blood Orange Liqueur and fresh lime juice. That joins Melting Pot's Grand Sangria, which features Beringer Red Moscato, Skyy Blood Orange Vodka, Grand Marnier, and a blend of fresh juices with a touch of cinnamon.
Wine is another way to deliver variety to consumers. "We aim to provide a wide variety of choices to our guests while offering great value. As part of this strategy, we're currently testing multiple pour sizes for our wines to provide guests with more options to customize their dining experience," says Paul.
So the cocktail culture is alive indeed at the on-premise.
BEAM TAPS INTO THE CRAFT AND FEMALE EQUATION WITH NEW INNOVATIONS
"We have the energy of a start-up," Beam Inc. chief Matt Shattock told analysts at the Bank of America Merrill Lynch Consumer & Retail Conference yesterday, noting that Beam benefits from having a long history in the spirits business, but recently became its own independent company.
Most exciting for them is the fact that "bourbon is growing rapidly." Dollar sales of the category gained +12.8% in the 13-weeks ending February 4, gaining +0.8 dollar share points. Its growth trajectory started in 2009, heightened by flavor innovation, premiumization and the authenticity associated with bourbon. "Flavor innovation.is about half of that growth, but we're also seeing very good mix and premiumization for about a third of it."
Beam's whiskey innovations are in the premium end of the market by design, including Red Stag Black Cherry, Red Stag Honey Tea, Red Stag Spiced, Jim Beam Devil's Cut and Maker's 46. The flavor offerings in particular succeeded in bringing in new consumers, and there is no sign yet of that slowing down. Red Stag Black Cherry, for example, is still growing at a +30% rate in its third year in the market, helped by females entering the category. Matt estimates that females are participating in flavored whiskey at "twice the rate" of regular bourbon.
Premiumization is another key trend driving bourbon, which has come "relatively late" to the category. "The higher the price point, the higher the growth we're seeing in our business," said Matt. Maker's Mark, Knob Creek, Basil Hayden's and Bookers all experienced double-digit growth globally in 2011 in comparable net sales.
Much like how Jack Daniel's Black is benefitting from Honey, Jim Beam is also seeing a halo effect from these innovations. Jim Beam flagship grew sales by +7% last year in North America after years of relative softness. In all, Beam's bourbon business grew +10% in the US last year.
THE CRAFT FACTOR. Craft distillers and particularly small-batch bourbon fits neatly in the authenticity equation. Does their growing presence make Beam nervous? Matt believes their portfolio is in good shape to tap into the small-batch trend, and points out that micro-distillers are not yet big enough to take share from the big guys.
"We are growing slightly ahead of the market" in recent data, he said. "Our share is in good shape." And while craft bourbon "is very healthy.it's not accounting yet for a significant portion of volume. It's bringing news and vitality" into the category, but it's still small.
"We have this tremendous portfolio. We were the first people into small batch" with Knob Creek and Basil Hayden. "We see that market space and those needs" being covered by their portfolio.
TARGETING WOMEN. We noted above that Beam found a way to appeal to women with whiskey flavors. But they have other products in their pipeline that do something similar, including Skinnygirl ready-to-drink cocktails and its upcoming wine and vodka offerings, Sauza Tequila, Courvoisier Rose and Pucker Vodka.
"If you look at women as a buying power in the U.S., it is the third largest country in terms of its buying power. It is a pretty impressive stat," CMO Kevin George told WSD back in September. "Spirits companies traditionally haven't targeted women. Largely wine is the first thing that they drink, so if I can get a wine occasion from women turned into a spirits occasion then that is a win for a spirits company."
POTENTIAL ACQUISITIONS. When asked about potential acquisitions, Matt said the company is focused on growing its current portfolio organically, while pointing out that they have been an active purchaser lately with Skinnygirl and Cooley Distillery. "It's a relatively youthful portfolio and it's a portfolio positioned very well," he said. One gap in the past was vodka, so they decided to create a new brand, Pucker Vodka, instead of acquiring an established one.
A-B PARTNERING WITH BACARDI. Speaking of innovations, there has been a lot of talk in the beer industry lately about taking back share from spirits. Molson Coors is launching Coors Light Iced T, a tea flavored FMB (without caffeine) next month in Canada, so there's a chance it could come to the U.S. in the future, reports our sister publication Beer Business Daily. But even more notably, A-B is partnering with Bacardi to release another line extension called Bacardi+ in Torched Cherry+Cola and Artic Grape+Lemon Lime Soda flavors. The COLA approved label shows the new FMB will be available in 80z containers with an 8% abv.
LVMH CHAIRMAN BERNARD ARNAULT is the fourth richest person in the world, according to the 2012 Forbes Billionaire List. The publication valued Bernard's net worth at $41 billion this year, the same as in 2011 and 2010. They rate him as the richest person in France and 65th-most powerful person in the world.
Until tomorrow, Megan
"Hollywood is a place where people from Iowa mistake each other for stars."
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