Bacardi GTR’s premiumization strategy was boldly on show with Grey Goose VX at Paris CDG last week.

 

Mike Birch, Managing Director, Bacardi Global Travel Retail talks to Doug Newhouse in Paris about Grey Goose VX and why it’s so important, accompanied by Francois Thibault, Cognac Maitre de Chai (=Grey Goose’s creator) and Aude Rocourt, Regional Director, Europe, Bacardi Global Travel Retail.

Background: Bacardi Global Travel Retail has been busy working on premiumization, with the latest offering – Grey Goose VX (vodka exceptionelle) – launched exclusively at Paris Charles de Gaulle Airport recently. This exclusive blend of Grey Goose vodka and fine Cognac was unveiled for the first time in a one-litre decanter/gift box with Paris Charles de Gaulle shops operator Sociéte de Distribution Aeroportuaire [ADP/LSTR-Aelia JV-Ed] at a premium price of £89 (€112/$152). But this is just one of several new premium offerings that Bacardi is planning to launch across its range.

 

SO HOW DO YOU SEE THE BRAND POSITIONING TODAY?

Mike Birch, Managing Director, Bacardi Global Travel Retail: From a company perspective, Grey Goose is clearly by far and away the lead super-premium vodka and there’s huge growth in the super-premium vodka business, and by innovating we believe we can take that business much higher.

 

In this product Grey Goose VX – vodka exceptionelle – we have a product that does that in terms of trading up and premiumizing, but bringing a new dimension to Grey Goose and particularly a new consumer consumption occasion.

 

 

Grey Goose VX (vodka exceptionelle) launched exclusively at Paris CDG with SDA last week.

 

So we believe the growth will be good for us, but also for retailers for whom I think it’s an incremental opportunity.

 

If you then look at travel retail and why we’ve particularly chosen travel retail, the vodka category globally is much bigger in domestic markets than it is in travel retail and it’s beginning to premiumize…

 

 

I WAS GOING TO SAY THAT THE REASON IT’S NOT BIGGER IN DF&TR IS BECAUSE THE CATEGORY IS NOT SEEN AS PREMIUM ENOUGH…

Mike Birch: Yes, but it’s not the least premiumized of all categories. Super-premium is growing very fast and Grey Goose is still two thirds of that category, so we really wanted to bring something that was going to drive that hard sooner with global travellers.

 

For the same reason, we believe that we will drive incremental sales for ourselves, but also build the category and get it back to its fair share versus domestic – so this is our first foot in that water.

 

I think that the initial results – and it’s only three days [speaking after the launch-Ed] – are incredibly exciting.

 

It’s appealing to the consumers in strong Grey Goose markets like Canada, US, UK that we expected, but it’s also being particularly appealing to Asians in the early days and also Russians, where Russians would typically go with their own vodka.

 

 

OUT OF THOSE CONSUMERS – PARTICULARLY THOSE FROM BRICS MARKETS – WHICH NATIONALITIES HAVE SURPRISED YOU?

Mike Birch: If you take Asia and the Chinese as a big part, then that’s what has most surprised us because they are the big Cognac and whisky market. But we have seen early signs in the likes of Korea and other Asian markets that the younger consumers are moving into vodka.

 

 

That old adage that you don’t drink what your father drinks because you want to show your differences is potentially showing signs there. So you know, we’re very interested in that, but we’re very clear that this is very early days.

 

It looks like it’s going to have a very wide appeal, but we’ll need to do proper analysis to fully understand whether that’s the case. That aside, and also talking a bit about the real substance behind the proposition, there is actually real huge craft and thinking that’s gone into the marriage of the Cognac and Grey Goose.

 

 

HOW LONG HAVE YOU BEEN WORKING ON THIS?

[Francois Thibault’s answers were kindly translated by Aude Rocourt]: He started to think about it three years ago and he really made it a real project when he realized he could actually blend our own grapes.

 

 

WAS THAT A TURNING POINT?

(Aude Rocourt for Francois Thibault) He wanted the product to express the values of Master Cellars and the region where Grey Goose comes from, which is grape region. So it was back to the origins for him.

 

 

IT’S VERY UNUSUAL FOR A PRODUCT ASSOCIATED WITH VODKA TO HAVE THE ORIGINS THAT THIS HAS GOT?

(Aude Rocourt/Francois Thibault): It is. The story of the creation became natural at some point. First it came very naturally when Grey Goose made a turning point by coming and settling into Cognac, which is not a vodka region.

 

Without any pretension or arrogance he said that his skills as a Master Distiller really helped him to create Grey Goose as it is today. But at that time 15 years ago there was absolutely no idea that he could take some Cognac and make this product. That was unthinkable at that time.

 

So he went to the Picardie region north of Paris, where they have the best wheat in France to select this for Grey Goose vodka. Because Grey Goose is a massive success it is now recognized in the Cognac region that it really is a superior, very sophisticated product with superior ingredients.

 

Then he felt it was the right time to start thinking of a blend, which 20 years ago would have been seen as a crime.

 

 

 

Left to right: Mike Birch, Managing Director, Bacardi Global Travel Retail; Aude Rocourt, Regional Director, Europe, BGTR; and Francois Thibault, Cognac Maitre de Chai (=Grey Goose’s creator); and Doug Newhouse.

 

 

DO YOU REALLY WANT THIS TO BE IN THE WHITE SPIRITS CATEGORY NOW?

Mike Birch: Look, this is a white spirit and it will sit in the white spirits category. The early indications are that this is attracting new consumers and that’s incremental sales. Part of that new consumer group seems to be attracted by the Cognac cue, so if I had enough space and I was a retailer I would want to dual locate it. So I think that would be a smart thing to do for the retailer and it would obviously be very welcomed by us.

 

Grey Goose is benefiting because of the growth in super-premium, so people investing in super-premium vodka and bringing great consumer solutions to that category is great news for everybody. I believe Grey Goose will continue to lead, not just with the VX, but with some of the value-added packaging we’ve been introducing and some of the flavours we’ve been introducing.

 

 

 

WHERE WILL YOUR FIRST POINTS OF SALE BE FOR THIS PRODUCT?

Mike Birch: Well we were very keen to launch in Paris first and it does just re-emphasize the link of where we’re from and the values of the product. So in terms of where we go next, we are quickly going to be available around the world.

 

We will be available across total global travel retail in scale with strong execution and strong sampling as you’ve seen today. We’re taking this very seriously and we’ve invested huge sums of money, so we’re really hopeful it’s going to be a big success.

 

I think everybody realizes within Bacardi that travel retail can be a fantastic area to test new products and we’ve got some strong recent history with Glen Deveron, with Aberfeldy, the new packaging, with the launch of Gran Reserva Maestro de Ron on Bacardi. We’ve learnt things within the first two days of launching and they would never happen in domestic, so everyone at Bacardi is fully behind travel retail being a great place to learn things and decide things.

 

Nobody gets innovation 100% right all of the time: some will fly, some won’t, we will learn along the way. But honestly I think this one will fly.

 

 

 

(Left) Guy Bodescot, Director General and CEO of Sociéte de Distribution Aeroportuaire.

BUT IF YOU THINK SOMETHING’S PERFECT, IT PROBABLY ISN’T AND THAT IS QUITE A GOOD THING IN SOME WAYS, ISN’T IT?

Mike Birch: Yes, because you learn really unusual things. We are surprised by who’s been buying this product in the first few days. We would never have predicted that and that changes how you then think about your executions and locations, where you’re going to invest and so forth.

 

Aude Rocourt: This morning we had Chinese and 25 to 30-year old Koreans who I never would have thought would have been in our first target group. So that’s absolutely great, because as you said, they could be a whisky drinker or whatever, but actually they are interested in this premium product which resonates better for them.

 

HAVE YOU GOT ANYTHING ELSE IN THE PIPELINE?

Aude Rocourt: Well you’ve seen this morning Maestro de Ron which is also a big launch for us worldwide. That is nice because like this one it’s in Paris for a month before the whole world – even domestic doesn’t have this. It is a real travel retail exclusive and Paris exclusive. We’ve been launching Maestro de Ron Bacardi in T5 [Heathrow] only last month, so we have two major innovations on the premium white spirits.

 

Mike Birch: Innovation is a central pillar and integrated and you can never say innovation is going to happen until it happens. But the plan for the moment is to have a substantial pipeline of innovation hitting regularly this year and next year and we have a three-year rolling programme. We expect some to work, we expect some not to work and we’ll deal with that accordingly.

 

A COUPLE OF YEARS AGO, WE TALKED ABOUT THE SLEEPING GIANTS THAT ARE IN THE BACARDI PORTFOLIO. BASED ON THAT INTERVIEW, THIS IS JUST THE BEGINNING OF WHAT YOU MIGHT BE ABLE TO DO WITH SOME OF YOUR BRANDS ISN’T IT?

Mike Birch: Yes and I think it splits into two. There are areas where we’re already very strong where we probably haven’t been doing the job we should have done – rum is an example of that, and we’ve got some incredibly aggressive plans in that area.

 

Gin is another example. We’ve done some good stuff. We’ve test launched Amber which has shown incredible results, growing total gin, growing Bombay Gin and taking market share. We think a similar pattern is probably going to happen here with Grey Goose VX.

 

Then on the other side of the coin there are the big categories where we haven’t been strong, but we have got amazing liquid assets. We’re really just focusing carefully on how we can bring those to market with the retailers in a way that adds a new consumer dimension, rather than it’s just something that’s going to take some share.