Cognac
at the beginning of
2004,
I
confess to
feeling
like
a total
square.
After
weeks of
research
and
interviews for
this
current,
annual, in-depth Cognac category profile, any
conceit that there might still be
something
hip
and
contemporary
about
me
has
been quickly shattered.
|
ROBERT BRADFORD |
I
always
envisioned myself, and still do, to be one of that
discerning, meditative brotherhood of fine cognac
cogniscenti, who’ve always believed in sipping and
savoring a snifter in a deep leather armchair in
some comfortable retreat, and maybe with a fine
Havana cigar when the wife’s not around. Not that
I’m going to change, mind you. In my later 60s, I’m
too old to change. But this is emphatically not the
hip cognac image of today, as one top Remy Martin
brand executive put it to me bluntly, in a
discussion (below). “Robert,” he quietly murmured
almost sadly, “I just have to tell you that you do
indeed fall into an increasingly ancient cognac
consumer profile. And, for you, all that’s
happening today can understandably seem entirely
shocking.” In other words – I’m an
antique!
Well, he’s right.
It seems I really am passe, compared to what’s
going on out there now. As it turns out, what is
now driving the present-day cognac advertising
market here in America is Hip-Hop culture, of which
I knew woefully little before undertaking the
research for this project. Other than the headline
news, and now an intriguing feature film about
murdered hip-hop messiah Tupac Shakur, I was
totally ignorant about hip-hop superstar pop
celebrities like Eminem, Busta Rhymes, Ja Rule, P.
Diddy, Dr. Dre, LL Cool J, and a host of others.
But all of this proliferating urban culture has now
become mainstream, and emerged as a phenominal
motivating force for cognac consumers everywhere.
One of the results is that it has turned this
category into the most exciting sociological
marketplace in the entire beverage
industry.
How profound is
the impact? Here’s just one extraordinary case in
point. About two years ago, rap star Busta Rhymes
came out with the pop hit, “Pass the Courvoisier”.
At the end of that same year, 2002, annual volume
sales for #3 cognac category leader, Courvoisier,
suddenly shot up from 450,000 9-liter cases – to
535,000. That’s a one-year increase of 85,000
cases, a growth rate of nearly 20%. Consider that
the brand’s growth over the previous few years had
averaged around 5000-8000 cases. You do the math.
And Courvoisier brand executives candidly told me
that this spectacular single year performance was
very much a result of the Busta Rhymes hit song
bonanza, and that they don’t expect another growth
year percentage quite like it anytime
soon.
But Courvoisier is
hardly alone. Virtually all cognac marketing in the
US has adopted hip-hop strategies and celebrities.
In a recent video, here’s megastar rapper Eminem
getting an intravenous feeding of Remy Red in a
hospital emergency room. This, by the way, also
sent cash registers spinning, and had a lot to do
with Remy Amerique’s sudden outdoor advertising
campaign investment of more than $2.5 million last
year. The year before they’d spent nothing. I
learned that almost all this unprecedented new ad
spend was focused on a new Remy Red billboard
campaign.
Open up a December
issue of Sports Illustrated, as I did last week,
and, right next to the lead cover feature, there’s
a striking full-page ad for Martell Cognac showing
an outrageously handsome, soulful black multi-media
artist, Sanford Biggers, staring back at me with a
compelling, challenging expression. The only
text-over on this portrait reads, “My Expression Is
My Truth” and, also, “Rise Above”. The fact is that
basic messages of aspiration seem to be the key
buzz theme and common denominator underlying almost
all the marketing initiatives going on in the
entire arena of cognac campaigns. As Schieffelin
& Somerset Hennessy Product Group Director Lori
Tieszen, observes in our lengthy discussions about
the ethnic marketplace, “Today, we’re living in a
world of aspirational imagery, and this is what
cognac truly represents to consumers anywhere you
go.”
So, read on, my
friends, and start getting hip to this very happy
new year era for the fast-growing Cognac
category.
LEE
BRAND MANAGER
REMY MARTIN COGNACS/REMY
AMERIQUE
ROBERT BRADFORD
Year after year, since the early ’90s, Remy’s
consistent growth performance has played a
significant role in fueling the Cognac category’s
impressive overall forward progress of the past
decade. And your brand’s dynamics over the past
five years, in particular, have been especially
noteworthy, moving at a steady double-digit clip
since 1997. As of year 2000, the overall Remy brand
family vaulted ahead of Courvoisier into the
#2-leading volume cognac position here in the US,
and last year you reached the 600,000 annual
9-liter-case plateau. Indeed, your sales have grown
300,000 cases, more than doubling in just five
years. This is a rather astonishing track record by
any standards in a beverage alcohol category. Where
do you see all this momentum coming
from?
ALEX LEE A great
deal has to do with today’s increasing mainstream
popularity and growth of so-called Hip-Hop urban
culture. Remy, along with some other cognac brands
have been benefitting from a lot of extraordinary
recent exposure from pop-hit videos with rap stars
like Eminem, Ja Rule, Busta Rhymes, and many
others. Of course, America’s cognac sales have
always received huge driving support from an
Afro-American consumer franchise. Traditionally,
for many years, over 80% of all cognac in America
was consumed by the Afro-American consumer segment,
but, now, Hip-Hop has expanded far beyond
Afro-American ethnics. Just consider, for example,
that the current superstar rapper, Eminem, isn’t
even black. He’s a white guy. Yet, his popularity
virtually carried the Hip-Hop record industry last
year. The fact is, as has been widely reported,
that if it weren’t for him, the Hip-Hop record
industry segment could easily be experiencing a
deep recession, right now.
Hip-Hop, in
general, has become so fashionable that a number of
the original black star rappers like P. Diddy have
really become more like entrepreneurs. Today,
they’re really more businessmen than musicians. P.
Diddy’s got things like a clothing and shoes line,
which, I believe, grosses something around three or
four hundred million dollars annually. He’s also
got a record company and a talent search company.
You name it. This guy’s into everything. Like I
said, he’s now much more about his businesses, not
so much the music.
On the other hand,
Eminem is all musician. And in a recent hit video
there’s a little scene where he goes into a
hospital emergency room and is being given Remy Red
intravenously. Another prominent rapper, Ja Rule,
has a video with a scene where he’s in a fabulously
expensive mansion, surrounded by all sorts of
luxurious lifestyle cues, and basically he’s
drinking Remy XO. Even J. Lo (Jennifer Lopez) has a
video with LL Cool J where the two of them are sort
of lovers, relaxing in a comfortable,
well-appointed livingroom and sharing a bottle of
Remy XO. This kind of thing does phenominal things
for any brand’s image.
RB Are these
product placements your doing, or anything related
to your ad strategy initiatives, or was Remy
selected by these video producers independently as
their product of choice without any prompting or
financial reward?
AL This is a point
that should be made crystal clear. It’s a protocol
understanding that video producers will approach us
to get our approval for using a Remy product in
their project. We’re careful not to invade their
creative territory, but, by the same token, we want
to be sure that our brand is displayed and used in
a tasteful responsible way. So, there is some
discussion and an agreement beforehand about
product use. But these are not Remy ad executions
in any way. We never pay for any of this. Rather,
what this demonstrates is where our brand equity
is. And it’s all directly related to a hierarchy
that seems to exist about cognac brand
perception.
You start with the
fact that cognac, itself, is generally regarded as
a luxury premium spirit. But, beyond this, you find
kind of a caste system of brands. Remy’s perceived
at the top of the scale in terms of quality and
aspirational appeal. Frankly, we’ve always owned
the higher marque market in the US, and actually on
a global basis, too. Over 70% of all VSOP action in
the American market continues to be Remy. At this
level, we’ve always offered the quality of Fine
Champagne cognac, a blending of the two finest
Grande and Petite Champagne districts of Cognac’s
Charente appellation – and we’ve maintained a price
point around $36 for a 750ml. Our leadership at the
XO level is also increasing. We used to outsell our
nearest XO competitor by 2-to-1. Today, we’re
closer to a 3-to-1 margin. Even in this ridiculous
economic time, our XO business, with a $120 to $125
price point for a 750 ml, is still growing at a
very healthy pace. All this has helped create a
super-premium image for Remy, irregardless of
ethnic persuasions. What we’re representing today
is something that’s more generally aspirational to
a consumer audience-at-large. And this, of course,
makes the brand unusually appealing for these
luxury-oriented video productions.
RB You’re making
me feel like a real square. I confess to knowing
very little about Hip-Hop music or rapper
celebrities. And being an older fine cognac fancier
in my later 60s, brought up in the
after-dinner-cigar, sip-and-savor snifter
tradition, I have to confess to being somewhat
startled by how all this current Hip-Hop phenomena
has been impacting the category. Seeing how it has
proliferated and become such a dominant feature of
today’s cognac marketplace at all levels continues
to amaze me. Does any of it surprise
you?
AL Robert, I just
have to tell you that you do indeed fall into an
increasingly ancient cognac consumer profile – and,
for you, all that’s happening today can
understandably seem entirely shocking. But consider
that this year marks something like the 30th
anniversary of Hip-Hop. I mean, hey, Hip-Hop’s been
around for quite awhile. So, for these young new
cognac drinkers in their later 20s, and even early
30s, they’ve grown up with Hip-Hop music. Many
hardly know a thing about Rock ‘n Roll or Rhythm
& Blues or whatever it was you grew up on. By
now, that’s all history. Today’s hip-hop culture is
everywhere. We’re now even seeing the emergence of
a new star rapper who’s Chinese-American from
Brooklyn named Gin. All this had made cognac one of
the most culturally exciting categories you could
imagine, particularly right here in America. It’s
absolutely fascinating from a sociological point of
view.
RB When I last
took a turn-of-the-century look at the total Remy
brand lineup, you were putting a large new emphasis
on a low-end VS product entry, Grand Cru. You also
were introducing a stratospherically-priced,
ultra-limited edition of a 750ml Baccarat crystal
decanter extension of Remy’s top-of-the-line Louis
XIII, which has been a world-famous icon of finest
quality cognac for decades, coveted both by leading
on-premise fine-dining and drinking establishments
and by off-premise collectors. The new product was
called Louis XIII Diamond. It apparently contained
the exact same blend of extremely old cognacs as in
Louis XIII, but had a 1.5 carat, amber-colored
diamond encased in the stopper. And it’s $6000
retail price made it the most costly cognac
offering on the market. How have these initiatives
been working?
AL Louis XIII
Diamond was a one-time thing. It was a very
conspicuous product that had great appeal to
serious collectors with a lifelong love of Louis
XIII. But it also was purchased by a whole
cross-section of people just wanting the
best-of-the-best. So, it was a mixture of old and
new money. For old money, it was a lifetime
opportunity to add an ultimate crown jewel to their
collection. To new money, it was a confirmation of
the fact that they’ve made it. We did well with it
while it lasted. Now it’s all gone,
finished.
As for our Grand
Cru initiative, we’ve been growing double-digit
ever since launching, and we’re probably going to
increase the overall exposure, because the
opportunities are huge. But they way we are
positioning the whole portfolio is this: it’s all
about the aspiration to Remy Martin. I mean, we all
want a Mercedes, and maybe an XS-600, in
particular. But this is difficult to afford. This
is why Mercedes has the 230 with a smaller engine
and all that, plus other lower-priced models. But
they’re all Mercedes, nonetheless, and they all
have that Mercedes stamp of quality and class.
Likewise, we want to make it a bit easier for some
consumers to come into the House of Remy. This is
exactly what our VS level, Grand Cru, is designed
to do. We’re not doing any large advertising on it.
But it provides an entry point for Remy, at around
$26 for a 750ml, that’s been very successful, so
far.
Our other marques
continue to do well, also. There’s our $55-range
1738 Accord Royal, which is a cognac blend
commemorating the Royal Recognition of Excellence
decreed upon Remy Martin by King Louis XV in 1738.
One of Remy’s product distinctions is that we
distill on the lees, which gives our cognacs those
rich, fatty, complex characteristics. With 1738, we
actually distill twice on the lees, which enriches
it further. It has a copper color tint, with
intense Limousin oak and candied fruit aromas, and
is superbly smooth on the palate. Critics have
called this blend particularly suitable for
chocolate. It’s also an attractive and affordable
trade-up from the VSOP level.
The next notch up
is Remy’s XO Excellence at an approximate $125
price point, then comes Remy Extra around $350,
and, finally, of course, Louis XIII, retailing
around $1200 to $1250. And Louis sales just keep
right on rolling. Whatever is available, we sell –
it never ceases to amaze me. But there just doesn’t
seem to be any other spirit that seems to have the
stature of Louis XIII among cognac consumers. In
this category, it’s almost as if it had no
competition at this pinnacle level. It’s a luxury
item unto itself, and we really don’t do any
creative stuff with Louis at all. It is what it
is.
RB This brings me
to a question about Remy Red’s identity. I’ve
included it in writings about the Cordials &
Liqueur category, but it clearly is also included
in your Remy cognac family of brands. Some have
even suggested that it represents a whole new
category segment of flavored cognacs, along with
Alize; and some other fruit-flavored, cognac-based
products. How do you classify it?
AL Technically,
it’s most properly defined as a fruit liqueur. But,
with a base of Remy Martin cognac, it definitely
also belongs in the portfolio of Remy products as
an extension of our cognac offerings. It’s role is
to serve as stepping-stone to make it easier for
the younger audience to come into the cognac
category. We don’t emphasize the cognac aspect,
because some people, initially, might not have an
approachable perception about cognac that we want
them to have. But we’re trying to give them some
understanding of a cognac taste and particularly
what it feels like. In this way, it’s been very
successful in recruiting those people whom we might
not be able to recruit with core cognac
introductions.
We’ve launched an
entirely separate advertising campaign to support
this, which, so far, has gone spectacularly well.
It’s particularly targeted to women, who, although
still technically considered a consumer minority,
are the fastest-growing consumer segment out there,
and they’re drinking more than ever. And, this past
year, we’ve added some new flavor extensions to
Remy Red. One is a Strawberry-Kiwi Infusion and
another is a Grape Berry Infusion. The 750ml bottle
is a totally new design and they’re all selling at
an $18.99 price point. What this is really all
about is expanding the overall appeal of the Remy
Martin brand.
RB When it comes
to your marketing strategies and advertising, I
have noticed one major recent change that arouses
my curiosity. You’ve traditionally never been a
huge mega-million dollar advertiser like the #1
Hennessy and #2 Courvoisier ad-spend leaders.
However, according to industry reports, you,
suddenly last year, invested over $2.5 million in
outdoor advertising, although had spent virtually
nothing on it the year before. What’s behind this
sudden new advertising initiative?
AL A couple of
things to point out here. Number one, we really
haven’t been doing a lot of advertising in years
past. But the sudden increase you refer to is
really tied directly to the recent launching
initiatives for Remy Red. That’s really the bulk of
it. However, as far as our other cognac products
are concerned, we’re still not advertising all that
much, which is a very different approach from our
competition. The heart of our thinking here is that
we want everything to grow organically. Nothing
forced. We want people to have real personal
feelings about our brand.
In other words, I
have a policy about this. Let’s say somebody is a
movie star or a big media celebrity, and they’re
approaching me about getting such and such a Remy
product for a party or a video or a film, or
whatever. My first question always is, “Do you
honestly drink Remy Martin?” If they’re not real
consumers of our brand, I don’t send them anything,
because I don’t want any forced relationship or
anything to be fake. I will only support those who
are genuine Remy drinkers in real life. This is our
commitment to organic growth, which means only
wanting to associate the brand with people who
really have a passion for it. I mean, take the
Busta Rhyme’s example of his “Pass The Courvoisier”
pop hit. Yes, undoubtedly, it was an enormous
bonanza for that brand while it lasted. But, after
that, what’s Busta Rhymes drinking with his
friends? It’s Hennessy. You know what I mean? That
will never ever happen with us.
So, this is a very
big part of our strategy, and we’ve been doing a
lot of below-the-line activities to create that
meaningful and real consumer connection. We run
this program called Urbanity, which is basically
all about very high end, upscale events where we
cultivate and nuture key individuals to adopt Remy.
For example, we hosted a gala party for Beyonce,
the hottest female singer right now. She was
launching a new album and is a loyal Remy drinker.
This was an exclusive event at the Sky Bar in LA
with a great many celebrity guests. And, as the
main sponsor, we had an obvious central presence.
The whole idea was having a high-powered,
interactive crowd enjoying themselves with a glass
of Remy. We try to be involved with the hottest
parties like this with trend-setters and what I
like to call “key influencers”, because they really
do have great influence on people’s consumption and
purchase patterns. So, we encourage them to adopt
our brand naturally. Word of mouth spreads. And by
creating this organic relationship, we make it
real.
RB Getting back to
the impact of ethnics on the category, do you see
this trend continuing?
AL What’s going to
happen is this: this so-called urban culture is
clearly being led right now by predominately
African-Americans. But, meanwhile, the subscribers
of urban culture are people coming from all
different ethnic backgrounds and walks of life. And
what’s also becoming urban and fashionably
mainstream is a much larger mix. We’re now seeing
Latino and Hispanic urban. As I mentioned earlier,
we now have a Chinese rapper, which adds an Asian
angle to it. So, no longer is this a mainstream
market of just one single ethnic group or ethnic
identity. It’s all about fusion, basically. So,
what Remy wants to do is understand these emerging
social undercurrents and what’s leading them. We
want to know how they’re going and where they’re
going. And we intend to be at the forefront of
these trends and styles and specific ethnic
communities, communicating our brand with a
contemporary relevant tone.
TIESZEN
VICE PRESIDENT, PRODUCT GROUP DIRECTOR
HENNESSY COGNAC/SCHIEFFELIN &
SOMERSET
ROBERT BRADFORD
For the past 12 years, America has been emerging as
the world’s largest cognac consumer, and gaining an
increasingly widespread audience on a consistent
basis. And, at the forefront of this expanding US
market, is the House of Hennessy, which has been
this country’s overwhelming category leader for
well over a decade. According to this year’s
projected volume sales totals, you now are weighing
in with an impressive annual 1.8 million, 9-liter
cases, which makes you one of the true spirits
giants in this country. Also impressive is the fact
that, while your two nearest competitors, Remy and
Courvoisier, keep fighting it out in fairly close
competition at the #2 and #3 category leadership
positions, with both showing strong growth
performances in their own right, you, meanwhile,
are still managing to gallop ahead by well over
100,000 cases a year, and continue to maintain a
whopping 3-to-1 lead in the US marketplace. So,
first, I’m interested to learn what you find
especially significant about the dynamics of this
rapidly growing category, right now, and, also, the
plans you have for your own brand’s forward
progress.
LORI TIESZEN This
is a good topic to get me going on. Although I’m
fairly new to the Hennessy brand team, I’ve been in
the wine and spirits business for 20 years, with 10
years in sales and the last 10 in marketing. All
this time I’ve been watching Hennessy’s ongoing
successes from a remote position with a genuine
sense of awe and respect. And, now that I find
myself at the helm of the ship, I can’t tell you
how excited I feel about the opportunity to be
directly involved with its performance.
To give you some
idea, you might have seen the November 2003 issue
of Impact which ran an article that talked all
about Blue Chip spirits brands. Only eight were
cited, Hennessy being one of them. The article
points out that, while quite a number of brands can
realize one or two good growth years, to sustain 10
or more years of growth on a consistent basis is a
truly rare achievement. But this is what the
Hennessy brand has been all about here in America.
And what’s really exciting is that I don’t see
anything but continued expansion up ahead. We look
in extreme detail at demographic trends, and if you
examine the way this country is growing with its
multi-ethnic consumer base, this is Hennessy’s
strength. We’ve always had a notably strong
African-American core consumer base that continues
to grow. But we also have been seeing a very
significant Hispanic and Mexican marketplace
developing that we’ve been strongly focusing on
during the past year. And now its Asians, too. So,
you look at the growth trends, and how these
demographic groups are on the rise, and we realize
how we are really poised to keep growing with
them.
RB How do you
target these various ethnic groups?
LT Because we have
such a large portfolio, we have a distinctly
multi-pronged approach. VS is far and away our most
dominant brand, and the primary consumers for this
is the young 21- to 29-year-old urban audience,
both African-American and Hispanic. And, now, with
the fast-expanding advent of Hip-Hop culture,
you’re starting to see many more young consumers
drinking cognac in the more general marketplace.
Also, there are several newly emerging ethnic
populations that have been growing for us. For
instance, Hennessy has a tremendous franchise in
Russia, right now, that’s grown from nothing,
really. And we’re huge in Ireland, with over a 90%
market share of all their cognac sales. It
obviously doesn’t hurt that our brand has an Irish
name. We also have always had an enormous loyal
following in Asia. And, now, you find a great many
cognac drinkers in traditional vodka strongholds
like Sweden and Finland. All this, obviously, gives
additional positive momentum to the Cognac category
and immigrant consumer trends here in the US, as
well.
RB What do you
feel gives Cognac such international
appeal?
LT The one thing
that’s universal around the world is that Cognac
presents a distinctive upscale, premium-priced
product image. People drink it so differently in
different countries, but the prestige aspect is
always pretty much the same. For example, it’s
actually huge in Barbados, right now, which has
always been a mainstream rum culture, of course.
Yet, I’m hearing that cognac consumption down
there, today, has become as popular as rum. And I
suspect that a good reason behind this is that rum,
being domestic, is not premium priced and doesn’t
have that prestigious cognac image to Barbadians.
Today, we’re living in a world of aspirational
imagery, and this is what cognac truly represents
to consumers anywhere you go, whether it’s Barbados
or anywhere else.
RB What are some
of these different usages you just
mentioned?
LT Well, VS, which
represents about 80% of our volume sales and
retails in the $27.99to $29.99 range, primarily has
mixed usage. African-Americans drink it with a lot
of Coke. Hispanic consumers like to drink it in
something like a Pina Colada or with gingerale. And
there’s a wide variety of special trendy cognac
cocktail creations you’re seeing right now, like
one called The Incredible Hulk. It uses Hennessy VS
and the popular new vodka-cognac-based fruit
liqueur, Hpnotiq, which has a sky blue color and
makes this Incredible Hulk cocktail turn green,
like the main monster/man character in the recent
movie.
When you move up
to our Privilege, which is our VSOP level, you get
more straight consumption in snifters or on the
rocks. Privilege represents about 15% of our volume
with a $37.99 to $39.99 price point. And it’s here
where you really begin seeing a broader-based
consumer audience. Along with the African-American
and Caribbean-Hispanic consumer segments, we also
have a very strong Asian consumption of VSOP, as
well as a very wide-spread general
market.
At the higher
marque levels of our XO, which retails around $125,
and our highest standard luxury $250 Paradis Extra
– this is where we’re really seeing a lot of new
growth, although, admittedly, on a small base. But
this is where you really start talking entirely
about luxury consumers, and fine hotels like the
Ritz-Carlton, and fine-dining establishments
everywhere. And this audience is truly
multi-cultural in its entirety, because, now, it’s
all about high-end image product appeal across the
board.
RB What are some
of your strongest markets?
LT Actually, if
you look at market index statistics in publications
like, say, Jobson’s, you find that most cognac
brands pretty much follow the same market strength
patterns. But, specifically, up where you’re
located in Massachusetts has been showing some very
significant recent growth for us. And, more
generally, although we look at our national market
on a state-by-state basis, you’ll find our strength
lies in urban centers. You look at the top ones
like New York, Chicago, metro-Boston,
Minneapolis-St. Paul, Detroit, Atlanta, San
Francisco-Oakland, Los Angeles-Long Beach, San
Diego, Baltimore, Washington, DC, Philadelphia, and
many more, these are the category drivers. Sales
reports tend to be indexed by states, but the
action is really centered in the cities.
RB Clearly,
incredibly strong core-loyal urban ethnicity drives
this category more than any other. And,
historically, it seems Hennessy has shown a more
pronounced response and sensitivity to its
supporting ethnic consumer franchises for over a
great many years, now, perhaps more than any other
brand. Maybe, in fact, this is your greatest
strength. For instance, I’m familiar with
Hennessy’s unusually creative marketing campaign,
launched about 2001, which featured the paintings
of budding African-American artist, Leroy Campbell.
His scenes portrayed African-American daily life,
and the entire theme was all about celebrating
African-American accomplishments in American
society. And, as I understood it, you also
commissioned him to do some work focusing in on
African-American holidays and special recognitions
like Black History Month, Martin Luther King Day,
Black Music Month, etc. Plus, many of these
paintings were actually made into gallery exhibits
and displayed at Hennessy points-of-sale. All this
struck me as a marvelously meaningful, creative way
to express appreciation to your principal core
consumer audience, while, at the same time,
effectively reinforcing the overall image of your
brand. Is this kind of thing being reflected in
your current marketing and ad campaigns for these
different audiences?
LT Very much so.
We continue to do a great deal with
African-American community. Schieffelin and
Hennessy have a long, long history of involvement
with the Tuskegee Institute, going back to when it
was first founded. We’ve been very involved with
the Thurgood Marshall scholarships for over 10
years. So there’s real longevity here. It’s not
just taking, but also a lot of giving back. This is
so important with ethnic communities. And,
actually, we’re still doing stuff with Leroy
Campbell. He recently did some art work for us for
a carnival. We’ve got a strong West Indian ethnic
population in Brooklyn. And they do their Carnival
Time, not at the traditional Mardis Gras time in
February, but in September. It’s really a huge
week-long festival. There’s a big parade. Leroy
painted one of the flamboyant superstar dancers of
Trinidad in action, and we used it on posters, on
t-shirts, and festival advertising promotions.
During this festival, Hennessy held a special
breakfast event, and Schieffelin’s president, John
Esposito, was one of the Grand Marshall’s of the
parade, walking with the likes of Hillary Clinton
and Mayor Michael Bloomberg. I mean, this was a
very big deal, as well as a major star-studded
exposure for Hennessy. Plus, it was a lot of
fun.
Currently, with
VS, we have a campaign called Never Blend In.
Basically, the campaign theme focuses on a given
celebrity who’s being true to himself, who’s
independent, and who stands out above the rest.
We’re using the same format for both Hispanic and
African-American executions because of the synergy
that exists within this urban consumer segment.
These are striking, compelling portraits like the
ones we’re using right now of Miles Davis and the
rapper, Rakim, who’s a super-famous celebrity in
the Hip-Hop world. For our Mexican consumers, we’re
using the well-known musician, Saul Hernandez, who
was legendary with one band, and then started
another band. He’s been around a long time and has
a unique style all his own. Then, for our Caribbean
markets, we have a star singer, Tego Calderon. He’s
from Puerto Rico, and what’s exciting about him is
that he’s developed a style of music that’s like a
Spanish version of rap. All this reflects what
you’re starting to see more and more with urban
culture, in general. There’s all this cross-over
going on, and just all kinds of different
expressions happening.
For our Privilege
campaign, which is our VSOP offering, the message
is “Are You Privileged?”. Whereas VS is very much
21-to-29, we’re now talking to someone with more
experience who’s 30-to-39. In other words, VSOP is
more sophisticated, more discerning. There’s more
of an emphasis here on things that you have already
accomplished. Where VS ads are more about standing
out, the VSOP approach is more internal and
reflective in tone. And where we use a lot of
broadcast and outdoor billboard ad placements for
VS, our placements for Privilege are more in a
broad range of top print publications like GQ,
Esquire, and Playboy. And we’re picturing a greater
variety of different people types, different
nationalities. These are still closeups of one or
two people, but the picture captures them in
thoughtful poses, gazing out, showing a reflective
mood. They’re clearly still out and about, present
in a club or some kind of social venue in the
background, but the subject is obviously caught in
a moment of thought, more personally
involved.
We’re also doing a
lot of on-premise promotions with our accounts,
working the marketing mix, in other ways than
advertising. It’s direct-to-consumer contact. For
VS, we’ve developed special signature cocktails we
serve at promotions like the Femme Fatale and The
Player. They’re fun, they’re colorful, and they
taste good. Femme Fatale is Hennessy VS with
cranberry juice, topped off with Moet nectar. It’s
served in a snifter over ice, so its got some fruit
juice with a little spitz that makes it unusually
festive. The Player is similar except we add
sweet-and-sour instead of the cranberry
juice.
With our
higher-end XO and Paradis Extra, we do very limited
advertising, but have had great success with
experiential marketing. These are events we call
“The Taste of Luxury”, and this is where we really
try to teach consumers about the fine points of
cognac, the differences between the marques, more
refined distinctions of greater aging, analysing
layers of flavors and subtle complexities, and all
that. And you might be surprised by the number of
people who want this learning experience. There’s a
great deal of interest out there. As everyone moves
up a notch, there’s a tremendous desire to find out
what the next notch is. Along this line, we’re also
doing a lot of private dinners and events with
celebrities with is all related to PR and buzz
marketing with the right people.
RB Any thoughts
about future category developments?
LT You know the
overall Cognac category really isn’t that large,
when compared to the percentage of something like
vodka. But all the trends are going the right way
for us with all these growing ethnic groups that
continue to have an affinity for cognac. What we’re
also seeing developing in America is this kind of
what I call a “premiumization effect”, I mean, if
anyone would have asked me 10 years ago if a $29.99
vodka could sell a million cases, I’d call them
crazy. So, I think that when a consumer get a first
taste of premium and, then, super-premium goods,
there’s no way they’re going backwards. And cognac
really fits into this. It makes a statement about
an individual’s image that continues to be unique.
All I can say is that we continue to account for
one-third of the world’s cognac sales, and we’re
committed to holding onto this
leadership.
