With a premier spirits line that includes Gray Goose Vodka, Patrón Tequila and Dewar Blended Scotch, Bacardi Limited markets a portfolio of 200 brands.
I recently asked Bacardi President and Global Marketing Director John Burke to give us an overview of what he did during the disruption of the past year.
Paul Talbot: What strategic considerations guided the adjustments to your marketing strategies?
John Burke: Marketing is in a very fluid state today. Things have changed more in three months than they usually would in three years. This means that more than ever we have had to find the right tone and deliver the right content at the right time.
To track rapid swings in consumer confidence, we conducted daily and weekly Human Signal Pulse Surveys last year. We wouldn’t normally invest in data collection as frequently, but the pace of change demanded that we find a new way to listen. Simply put, we listened and put the ideas into action. We had to become more nimble and responsive in the way we deploy our brands.
One should also be aware that new behaviors emerge in response to events while at the same time the trends that had taken hold before the crisis have been amplified by these experiences.
For example, health and wellness have been all the rage for quite some time. Now, personal care has accelerated exponentially. For us, that means accelerating non-alcoholic and low-alcohol cocktails. Or for some consumers who choose to drink less frequently, they choose to drink better drinks and trade in for better experiences.
Sustainability is another amplified trend and we took advantage of the past year to step up our efforts in building an environmentally and socially sustainable supply chain.
Talbot: When trying to better understand the future of selling spirits online, what should we pay attention to?
Burke: The online spirits market is divided into three segments. First, bricks and clicks, where established retailers can facilitate planned shopping experiences. It’s like regular scheduled shopping, moving online from the store. Over time, the consumer tends to become loyal to a limited number of retailers.
Second, there has been a huge increase in the immediate delivery of spirits. We have built a solid base with our E-commerce partners, allowing us to respond quickly to this new demand.
Last year in the UK, when the business had to close, we were able to work with some bars and Deliveroo to bring consumers a range of premium Bacardi cocktails that can be delivered right to their homes.
We also worked with Cocktail Courier in North America on World Cocktail Day to provide consumers with Bacardi Cocktail Kits. We see a growing opportunity for spirits and ready-to-drink cocktails to be part of consumer-delivered food orders.
Finally, there is an emerging trend to deliver branded experiences through online purchases. To capitalize on the pandemic home-brewing cocktail trend, last year we launched MixLab, a cocktail recipe app that features online mixology recipes and tutorials from bartenders around the world.
Talbot: What noise around this emerging chain should we perhaps ignore?
Burke: Rather than being ignored, I would say we need to be careful about understanding what will happen when the world comes out of the pandemic. I expect some behavioral changes to be permanent and some may fall back.
For the United States, what is unavoidable is that consumers have had their first experience of purchasing spirits online. Before Covid, only 1% of spirits were purchased online, but that has changed dramatically. What we saw in sales in a month we now see in a week and what we saw in a week we now see in a day.
It is wrong to see e-commerce as simply stealing market share from the spirits market. By responding to new consumer needs and supporting consumers thirsty to learn more about cocktails, e-commerce has expanded the size of the market. While we believe people are eager to return to their favorite bars, we believe the house will continue to develop as a hub of entertainment.
Talbot: The recent surge in premium products … does this trend have legs?
Burke: Drinking less but drinking better is a long-term trend shaping the spirits industry over the past 10 years, but it was amplified and accelerated by the pandemic as people sought to trade for healing.
Talbot: Will the easing of restrictions linked to the pandemic have an impact on the growth of this segment?
Burke: In the uncertainty of the pandemic, we have seen consumers return to trusted brands. When the premises reopen, we would expect this consumer trend to be reflected in the way bars and restaurants build their offering to welcome customers again.
We expect outdoor socializing to be important as the world begins to open up again and as such the appreciation for premium spills over to other beverage categories as well, especially in the ready-to-drink area (RTD). This is the fastest growing category of spirits, and we see a real opportunity here with our brands which are premium spirits, compared to malt drinks in this space.