FRONT LINE REPORT FROM THE CASH REGISTER

What’s Actually Selling Out There On The Streets And In The Stores
By John Henry

I hope we can all raise a toast that the worst is behind us. The last year and a half has served the whole wine and spirits industry a Suffering Cocktail with an ROI twist.

Value to coast ratio is now king. Look no further than Svedka, up over forty percent the past two years. Consistency is the queen. And craft beer has played the merry court jester, all the way to the king’s bank. Any upscale brand smart enough to stay the course during this turbulent storm in the spirits business, and even invest more in brand loyalty and support without slashing, dashing or trashing prices, will emerge a new monarch at the point of purchase when the cocktail sun shines again. Think Jameson’s, not the Grey Goose. But what of the emerging brands? The proof is off-premise where today’s real brands are being built, not on the bottle service list at places like 1OAK.

Since I visit about twenty liquor stores a week, and touch about fifty retail outlets, tri-state, I figured it is time to assess who is breaking through in the market sales headwinds we all face daily.

There are three brands I see with particular traction and buzz. My tests are such, across the board: How close is a brand to the store cash register? Which brands have the displays and POS closest to the door? Does this brand a hit a sweet spot price point? And, who has the floor stacks and pricing amongst the top selling brands?

The brands best passing muster are Nuvo, Skinny Girl Margarita and ChocoVine. Not exactly the stuff of Rob Cooper St. Germain shooting star legend or of the ultra boutique Haus Alpenz portfolio buzz. But they each pass the true tests. Let’s take a closer look why.

ChocoVine is $9.99 and it’s the adult wine Yoo-Hoo. Need I say anything more in these troubling times? No shame in listing “artificial flavor and colors” on the back label. The nostalgiac windmill and tulips sell it all up front. Cabernet based, 14% alcohol AND endorsed by Matt Lauer on the TODAY Show make this a brand with the filly pedigree for turbulent times. Plus Dutch Chocolate thrown in? Get me a case!

Now, you of the Bitter Brothers, Chartreuse and Del Maguey persuasion, come off your cocktail high horse and please take note: This brand answers all the right questions for your typical customer walking in the store door looking for a sweet wine. Live a little. Add its location, location, location placement and perfect sweet spot price point of $9.99. Plus it’s earned cross country buzz from New Hyde Park to Costa Mesa (Go ahead…Google it); and when you tally all that up you may have the first horse of the cocktail apocalypse. A sure fire seller making good margin for ALL . I recently sat around drinking some mezcal with a few industry stalwarts and we all agreed that the FOB on this must by $1-3 a bottle. With a retail of $7.89 to $12.99 (I checked on winesearcher.com today) there MUST be lots of margin built in for all. No wonder Empire Merchants just picked up distribution rights here in Metro NY.

Nuvo. Is it a sparking liqueur? Or a pink sparkling vodka? A Carbonated Cosmo? Or like a Razzle, is it all of the above? No worries. With a pedigree of the lightning in a bottle London Group perfume mogul Raphael Jacoby (he sold Hypnotiq to Heaven Hill in 2003 for $30 million) and a Rising Star brand award this year at 125,000 nine liter cases; this brand has all Four Horseman questions LOCKED UP IN DA HOUSE: a special white display rack with video between the cash register and the store door, a poster on MOST store high volume and bulletproof doors with Lil Wayne and other hip-hop stars backstage a’ Nuvo swilling, and a designer glass floor stack somewhere else within eyeshot (showing multiple size SKUS), plus a price point sweeter than Little Kim make this a home run brand. Plus, they have a co-ownership deal with a Lil Company called Diageo, who knows how to launch brands like Cape Kennedy once launched Space Shuttles. Initially, Nuvo stumbled with an exorbitant price point, but since Diageo came on Nuvo sells the 375s and the 750s in the range of $19.99 and $28.99. respectively.

Finally, Skinny Girl Margarita. A true sales Triple Crown in the reality TV era:
Bethenny Frankel of “Real Housewives of New York” and “Bethenny Getting Married” – low calories/agave nectar and the most popular cocktail in the country answers all of the four challenge questions and more. I spoke with an executive of Palm Bay International recently and he told me that the only brand problem is the Out of Stocks (OOS). The SkinnyGirl brand boasts less than 100 calories on a 4 oz serving in an era when most margaritas sadly still resemble alcoholic Slurpees with Yellow Dye#5 and five times those lean calories. This brand is out just short of a year now and it is on fire. Talk about a sweet spot-it’s $12.99 -14.99 off the shelf. This gal knows her Marketing 101 PPP stuff. Stack it up high, without silicon, responsibly.

Bethenny’s elixir may not be St Elizabeth’s Dram, but let it flow.

This entry was posted on Monday, August 2nd, 2010 at 3:16 pm

7 Responses to “FRONT LINE REPORT FROM THE CASH REGISTER”

  1. Darcy O'Neil says:

    Wow, only 100 calories on a 4 oz serving? That must make it an ounce or less of tequila per serving. But ya, quality has little to do with the majority of peoples purchases, branding is where it is at.

  2. admin says:

    I keep hoping that quality/mass market gap will close. Maybe with another generation’s worth of drinking/spirit education. In the meantime, it’s frequently about branding and marketing and sometimes (sadly) satisfying the lowest common denominator in order to make the biggest profit. I guess what this really means is that the quality message has to get sexier to have broader appeal.

  3. Jamie says:

    That just made me cry a little inside…..

  4. angus winchester says:

    This is a tough piece… it makes some bold claims amid some flowery language and by name-dropping the high end drinker and mixology stuff it makes it contentious… its not comparing like for like now is it?

    I guess the key is the age old ‘chicken and egg’ argument… do these brands do well because of your tests (place, price and display) or have they earned those places by being a great product?

    Off Premise and On Premise are totally different beasts and cannot really be compared without drawing woefully innaccurate comparisons.

    This reminds me of Fox news…

    aw

  5. admin says:

    Angus,

    First off, thanks for taking a moment to respond!

    It is a tough piece (though written by John a little tongue in cheek with some swagger/bravado intended) because, in part, it’s contrary to what we’re hearing at the cocktail bars we frequent.

    You’re right – not comparing like for like; just pointing out the high end mixology stuff to grab attention and shine a spotlight on what’s happening on premise.

    To answer your question about the chicken and the egg argument, I think what it boils down to is not so much do the brands do well because of the tests or by being a great product but because this is what appeals to the mass market right now.

    It’s all very fascinating to me.

    Francine

  6. […] In an effort to shake up the cocktail establishment just a little bit and open some eyes to what’s happening on the retail side of things, John Henry of Pipeline presents his street report on what’s keeping the cash registers ringing – http://insidefandb.com/2010/08/front-line-report-from-the-cash-register/. […]

  7. Mike says:

    Well, I have to say I tired ChocoVIne. Decent but the texture?????
    SkinnyGirl…well do the math. SUre its “LOW CAL” but the proof is so low you will have to drink several to enjoy the benefits……At that point you are up to 300 or 500 cal.

    The new BUZZ….Well I checked into it. I heard about Genuwine’s new drink of choice. Adult Chocolte Milk. SO I bought some from Hi-Time wine, c.m. CA. THIS STUFF IS THE SHIT!!!40 prrof chocolate milk with vodka:)

Leave a Reply