Building a Brand with $70,000

FILED JULY 2, 2015

Over the last few decades, Campari America, the sixth largest spirits company in the world, has gained a reputation for buying good products and taking them to new heights with successful rebranding efforts. Today, the company has a distinct reputation for being fun loving, forward-thinking company with a heavy mixology influence.

During the annual Wine & Spirits Daily Summit, Umberto Luchini, Campari America's vp of marketing, gave an in-depth look at their process for building and rebranding two brands in particular: Espolon and Campari.

THE BUSINESS OF STRETCHING $70,000: Until 2008, Campari distributed and sold 1800 Tequila, but that business quickly vanished with the creation of Proximo Spirits. "We had nearly a third of the turnover wiped out in basically a year," Umberto said. "That impacted the way we wanted to build our business in the US."

Following 1800's departure, Campari set about building a portfolio of brands they owned, rather than just represented. This is where Espolon comes in. At the end of 2008, Campari bought a small distillery in Jalisco, Mexico that was making a small tequila brand called Espolon. At the time, it was only sold in California and Texas.

"The brand was pretty much unknown so we had to start from the beginning."

Umberto came to the US business around the same time and was instructed to "rebrand, reposition and relaunch" Espolon in the US in the super premium category. Here's the kicker, they only gave him $50,000 to get the job done. Although he went a bit over budget at $70,000 he said, "That's actually how much was spent to build this brand."

On an early visit to the distillery, Umberto realized they were sitting on almost half a million gallons of silver tequila that needed selling. "What used to be a fun assignment looked like 'Oh, I need to start doing something'" he said. "Time was very short."

He decided to go on a road trip around Mexico to get some insight on the culture. "It's a very, very intense place," he told listeners. "There's flavors, there's color, there's danger, but there's also passion. There's a lot of religion, but there's also respect for freedom."

While there, he discovered some artwork that "spoke to [him] about Mexico," and he fell in love with it. Lacking both time and money they skipped consumer testing on the product and went straight to design and launch.

"We started to see after the first few months, consumer [interest] just out of the label, and the name, and the story it was offering… when you start to see this, you think, 'Something is going on.' When you start to see accounts taking it, 'Yes, there's definitely something going on.'"

Espolon is now over 130,000 case. Using what Campari learned from the experience, Umberto's advice for anyone building a brand is to develop a meaningful story that consumers and bartenders can own and talk about; don't be too scared to polarize consumers - if anything, try to seduce them; obsessive focus on quality pays off.

CAMPARI RIDES THE WAVE: Campari's recent return to success wasn't so much a rebranding -- Umberto said they have never shied away from the bitter taste of the liquid -- as it was capitalizing on a new trend.

From 2000-2009, Campari hovered around 50,000 cases in the US. Then the "foodie" movement began to grow and people were experimenting with different kind of flavors - bitter flavors. So to take advantage of the growing trend, Campari America initiated a few key strategies in the on-premise to grow the brand.

The first strategy, which Umberto deemed the amplify strategy, was Campari allowing bartenders free reign and creativity with the brand and then building on whatever they came up with. Umberto said the company essentially told bartenders: "This brand is yours. Whatever you do, we will just amplify it and bring it to a bigger audience."

In order to maintain bartender loyalty, Campari set about rewarding them for it. For bringing Campari to the forefront, the company rewarded bars and bartenders with exclusive items like barrels for aging, and sent them to the best cocktail competitions and Campari Academy, he said.

The third part of the strategy was making Campari synonymous with the rapidly growing popularity of the negroni cocktail. They hired a "massive" PR company to focus on just the one cocktail. Their message was "You can do whatever you want [with other ingredients], but you need to have Campari in your negroni."

They have also gotten behind Negroni Week in a big way. Negroni Week is global celebration of the cocktail that raises money for charitable causes. Each venue that participates donates a portion of the proceeds to the charity of their choice and Campari donates about $10,000. The event began in 2013 with about 100 participating bars and has grown to more than 3,500 as of the latest tally for 2015. And Campari? They've doubled Campari's 2009 case count and are closing in on 100,000.

ON-PREMISE TRENDS TICK UP IN JUNE

On-premise restaurant trends have been largely soft in 2015, but for the 4 weeks to June 14, GuestMetrics data shows trends began to improve. Traffic was still down (-1.6%), but that represents an increase from the -2% trend for the 12-week period. The alcohol category showed similar trends. Volumes were at -3% for the 12-week period, but improved to -1.9% for the 4 weeks, which is generally in line with the trends from 2014, according to GM.

Spirits, particularly the craft variety, continued to lead the pack, picking up 0.8 share points from beer during the 4 weeks. Volume growth for the period was flat, which is still an improvement from -1% trends during the 12-week period. Tequila, Irish whiskey, bourbon/blends and brandy/cognac took share from rum, cordials and vodka.

Meanwhile, wine volumes were down -1.7% on-premise, also an improvement from 12-week trends of -3.2%. The volume share gainers were prosecco, cabernet sauvignon, pinot noir, red blends, moscato and sauvignon blanc, while the losers were merlot, chardonnay, riesling and zinfandel.

WSD BRIEFS:

SFWE TAKES ON A SPATE OF NEW BRANDS. San Francisco Wine Exchange has added four new brands to its sales portfolio: De Bortoli, Eugenio Collavini, Experience and Vista de Regua. De Bortoli is an Australian winery founded in 1928 that specializes in cool climate of the Yarra Valley; Eugenio was founded in Friuli, Italy in 1896 and focuses on pinot grigio, ribolla gialla and friulano; Napa Valley's Experience was created by Catherine and Travis Vale with a portfolio that includes a 2012 Napa Valley Red Wine, a 2012 Napa Valley Cabernet Sauvignon and a 2012 Sonoma Coast Pinot Noir; Vista de Regua is from the Douro region of Portugal and its portfolio includes Vinho da Familia Red 2013, Carater Red 2013, Reserva Red 2010 and Vinhas Velhas Red 2009.

DRY CREEK VINEYARD DEBUTS NEW PACKAGING. Sonoma County's Dry Creek Vineyard has revamped the packaging beginning with its 2013 Old Vin Zinfandel. The gold with the new package is to honor the "pre-Prohibition nature of the vines" while also innovating for next generation of consumers. The new corks for Dry Creek have laster printed detail information about the cork such as the age of the cork forest, harvest date of the trees etc.

CALLING ALL HANDS. It's time again for our semi-annual survey to collect feedback on our performance. The survey is quick, anonymous and extremely valuable for us.

Until later,
Emily

"Life isn't about getting and having, it's about giving and being." -- Kevin Kruse

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