Bottoms Up: Liquor P-O-P Report

Ever-burgeoning competition -- more players, more labels, more displays -- has put the screws to the liquor industry.And the response from beer, wine and spirits marketers has been to fine-tune their point-of-purchase efforts. In the beer industry, especially, the trend is toward customization. Broad-based national promotions decreed from on-high have fewer followers these days.Miller Brewing Co., Milwaukee, anticipated this trend nearly two years ago when it split its marketing department into 19 regional offices strategically placed throughout the country. "Today, we work extremely closely with our field marketing and sales people when we put together P-O-P," says Marketing Services Director Mike Hart.In 1994, Stroh Brewery Co., Detroit, did much the same. "We reorganized our sales and marketing effort into one team called customer marketing, and we established four regional business units," explains Mark Duchovic, director of customer marketing for Stroh. "The regional business units have the ability to tailor promotions to regional tastes," he adds. Lately, they've been developing "a lot of market-specific promotions."Throughout the beer industry, concurs Mitch Meyers, "much more responsibility is being given to people in the marketplace." Meyers is president of The Zipatoni Co., St. Louis, the promotions agency for Miller. She also was once infamous as the "mother of Spuds McKenzie," a character she created while employed at Anheuser-Busch Inc., St. Louis. "More and more power seems to rest with key, large retailers," she observes. "Decisions are frequently made at market level, and the national promotions that do come down [from the top] have to have adaptation potential at the local level."The "regionalization and localization" of Miller's marketing efforts during 1994 has had a "tremendous impact on what we design and how quickly it is needed," says Hart. "We are creating more generic P-O-P that can be imprinted with localized message points and still have enough room for pricing," he explains.Meyers sees this trend toward customization as positive on all counts. Off-premise retailers are more likely to use and provide feedback on point-of-purchase materials for which they feel ownership. It is easier to track the results of tightly focused, narrowly run campaigns. Finally, when retailers "see positive results, they're more willing to do it again," says Meyers. "Fewer and fewer national promotions [are widely] used at the store level," she adds. Successful P-O-P is "coming from the field level up."The icing on the cake is the creation of "good relationships with accounts" and "faster turnaround times," she says.Another side effect is that brewers spend more in creative costs. That's OK, Meyers stresses, because the materials will certainly be used when the order comes from the store itself. "It's frightening the percentage of traditional P-O-P that never gets out of distributors' warehouses," she says. "I've seen pallets [of unused display materials] dropped into dumpsters. They don't even know what they're throwing away."Competition Fans the FlamesAs long as there is competition, there will be point-of-sale boosters. "We're seeing increasingly creative merchandising displays and a broad use of different types of pieces, whether they're inflatables, standups or display enhancers," says Stroh's Duchovic.The creation of bigger and better P-O-P is "accelerating because of the competitive nature of the beer business," he notes. "Our growth rate, generally speaking, is flat -- no pun intended." He estimates the rate at less than 1 percent a year. As a result, brewers are "trying every mechanism they can to develop a competitive edge, and that extends to point-of-sale and merchandising programs."The same holds true for spirits. "With so many new products coming out," says Mike Breazeale, group merchandise manager at Hiram Walker & Sons Inc., Southfield, Mich., "there are a lot of display materials to choose from."Putting up point-of-sale is a little more difficult now because floor space is at such a premium," he observes. "Some of the brands, like Drambuie, never get much more than a three-case stacking during the non-holiday season. The footprint of the case is what you're going to get. But with another brand, like Canadian Club or Cutty Sark, you can get massive stackings on special promotions."Big on Quality"The more there is competition, the more you have to stand out of the crowd," notes Marco Moretti, senior brand manager for specialty import division brands at Labatt Importers, Darien, Conn. "As marketers and producers of point-of-sale, we always are looking for the next big idea."For Labatt's Red Stripe, quality is key. Customers expect a certain level of quality from an imported beer, says Moretti. "Not only in the product, but also in the point-of-purchase materials." Quality, he says, means selecting the best materials, choosing the right creative and not cutting corners.Increased attention to quality has shown up at the New York-based Finnish National Distillers, too. "We've made an investment in making better quality, more expensive displays with the hope that they stay up throughout the year," says Marketing Director Teresa Maloney. The company recently developed a pair of giant floor displays mimicking the Finlandia brand's ice-sculptured bottle. The permanent fixture displays are designed to be customized for various holidays and promotions throughout the year.Bill Lilla, vice president of Heublein Wine Group, San Mateo, Calif., also sees a trend toward "higher quality pieces that stay up for longer periods of time." He particularly favors multi-function materials such as double-sided display cards that present two different messages. "It's a more efficient way of approaching point-of-sale, not only from a cost standpoint, but also considering the retailer and distributor who maintains the display."Stroh attempts to build economies into promotion pieces by "designing more structurally sound pieces that can be used with multiple programs," says Duchovic. With interchangeable elements that snap into place, he says, a football display can be used again for a Halloween program. "One of our business units developed some danglers with slots so that cardboard pieces can be removed and new ones inserted. That's worked very well so far."Premium Beverages Offer MoreDespite the varying legal restrictions placed upon them, value-added promotions are becoming the norm to beer, wine and spirits marketers."Value-added is a hot buzz word in the industry," notes Steve Saunders, manager of marketing events at Coors Brewing Co., Golden, Colo. "In the beer industry it gets a little tough" thanks to conflicting regulations and prohibitions. For example, Miller's Hart says California's 25-cent ceiling on give-away values "limits our options there.""A lot of states don't allow you to add value, and your legalities get kind of crazy," Saunders explains. Coors strives to make all of its promotions "as legal as possible across all the borders, so you don't have to have too many variances on [a display piece]." Dealing with regulations is "just a reality of life in the beer industry.""Added value is probably more of a trend in point-of-purchase than anything else," agrees Hiram Walker's Breazeale. In a program initiated last year and scheduled to repeat in 1995, the brand attached a 50 ml bottle of Canadian Club Classic to a 1.75 liter package of Canadian Club. "Tie-ins and cross promotions are something that we'll be getting into more and more," he predicts.Marketer Bill Lilla says Heublein has long been committed to providing the consumer with a value, "be it a coupon, refund or mail-in form" on products that go with the consumption of wine. In the past, the company has cross-merchandised its wine with other edibles, such as seafood, chicken and beef. In the last year or so, however, the trend has moved away from "food-only tie-ins" toward more general lifestyle promotions, according to Lilla. The company's Blossom Hill line is marketed toward women, for example, so the company has been experimenting with bath and spa item tie-ins.Brewers are especially famous for their appreciation of premiums. Giveaways were the most successful promotions at Chicago-based Barton Beers Ltd., last year, according to Matthew Borgard, manager of promotional marketing.Labatt offered Red Stripe drinkers a deal on reggae music and a chance to win a trip to Jamaica. An 800 number, advertised in Spin magazine, backed up the promotion with Red Stripe posters, T-shirts and other promotional items.Back at Coors, Saunders says the company's two best promotions in recent years also revolved around value-added concepts. First was the sponsorship of the Silver Bullets women's professional baseball team. Free baseball cards were attached to packages during the season.The second was a Zima program using holographic art. The holograph used in the display was replicated in free, take-one posters and post-cards. The goal, says Saunders, was to have shoppers "spend more than 2.3 seconds in front of your display; this way they spent 8.7 seconds."At Stroh, premiums also ring the bell. The company ran two "major consumer giveaway promotions" last year involving Old Milwaukee Light and Stroh's. In the former, a sweepstakes awarded a fishing trip with pro fisherman Bill Dance. The latter offered consumers barbecue grills in the shape of a beer can. "Our wholesalers set up displays in the stores featuring a barbecue motif," Duchovic recalls, saying off-premise retailers appreciate the fact that "we can provide the ingredients for our wholesalers to build very creative displays."Innovation at Every TurnTo creative types -- art directors and designers -- being different is often synonymous with doing a good job. But for much of its history, the liquor industry has been content just to keep up with the competition."Traditionally we did very simple things -- whatever the rest of the industry was doing," notes Finlandia's Maloney. "Now we're really trying to stand apart from the other categories and competitors and do things that really do look different."Hiram Walker's Breazeale agrees: "We're trying to get away from the normal things like glass sets; they're just not very exciting."Surrounded by the same-old-same-old, marketers are itching for innovation. "So many things do look similar -- you really need to leave the industry to get ideas," Maloney adds.The cosmetics industry is a primary source of inspiration. "It's exciting to walk down the cosmetics aisle," says Breazeale. "The P-O-P materials are very bright and bold and colorful and classy." There's little danger of copy-catting, however. With their smaller budgets, most liquor labels "can't touch" what cosmetic brands produce, he says. Budgetwise, he continues, "We're constantly being squeezed like everybody, yet the P-O-P has to be exciting enough to garner the floor space."Adding motion, light and sound is one way many liquor marketers inject excitement into their displays. But because of the added cost, many save the floorshow for the holiday season. Hiram Walker, for one, makes a big investment at Christmastime in sound and motion. Eventually, Breazeale anticipates, "we're going to get into video and interactive touch screens. Somewhere in the not-too-distant future, that's going to be a part of our point-of-sale mix."While cost alone isn't enough to rule out any one concept, image is."Each and every beer has a different image; we wouldn't do anything that doesn't spell Jamaica," says Labatt's Moretti. "If I were to provide a mechanized display for Red Stripe, people would say, 'This is not really Jamaican.'" A more appropriate display would follow the path of last year's successful Jamaican shack, where distributors constructed a mini-Red Stripe bar in accounts with patios.Determining SuccessThe marketers interviewed here all have established means of monitoring and reviewing their efforts. "Heublein has a standard format where they get responses from their sales people as far as what's going on in the field, how well it went over and what the retailers said," notes Maloney. (Heublein and Finnish National Distillers jointly own Finlandia importer Palace Brands Co.)Barton's displays are monitored by local reps who provide a formal evaluation following each promotion. Wholesalers and retailers also provide input, Borgard reports.Hiram Walker evaluates its promotions upon conclusion. "We have a standardized form that we use and all of our regional managers assist us in grading them," says Breazeale, whose department evaluates both the brand and the competition's efforts. Getting the retailer to accept the display "is very definitely a success" in itself, he believes."In the liquor category -- especially vodka where the competing brands are priced similarly and there isn't often some way that we can really distinguish ourselves -- it's really important for us to get the goods to jump off the shelf," says Finlandia's Maloney. "So getting a display put up is largely what we would consider a success; sales will follow from that."Barton's Borgard agrees: "If you get it in the store, then you're 90 percent there."Ease of SetupPart of the secret to a display's acceptance by on- and off-premise accounts is convenience. "Supermarkets are cutting back on labor, one of their largest expenses," reports Barton's Borgard. "Thus, store managers try to borrow the distributor's personnel. They say, 'You can put up this display, but you have to take down the other display,'" notes Borgard. That affects the way displays are designed. "We try to make them as easy as possible to put up." For example, he says, retailers loved last year's Corona palm tree display because it was compact and self-contained. And wholesalers loved it too "because it was put up in ten seconds," he says.In almost all cases -- Coors, Miller, Finlandia included -- display assembly falls to the distributor. At Finlandia, the salespeople from Palace Brands take care of assembling displays. "Luckily, they're not real complicated," says Maloney.Miller's displays are also built by distributors' reps. "We always try to keep the complexity and the assembly time to an absolute minimum," says Hart. "If it takes more than 10 minutes to construct, it won't get made and we won't see increased sales." At Barton, Borgard has made a similar observation. "Most of the distributor's personnel aren't salesmen, they're order takers," he notes. "If a display takes 15 minutes to put up, they have less incentive to do it."Labatt orders all of its creative promotions from The Marketing Continuum in Dallas, Moretti says. The promotions agency devises the materials, and either the retailer or the wholesaler puts it up. The Integer Group, an offshoot of Coors, is currently in charge of developing materials for all Coors promotions.Off-premise retailers place relatively few restrictions on what P-O-P they'll accept. "There have been instances where they don't want a big motion display because of motion detectors [in the store]," says Hiram Walker's Breazeale. "But I haven't seen anything in particular that really cramps our style."Miller's Hart says size is the main concern expressed by accounts, who are increasingly "providing us with very specific measurements for end-aisle displays or on-shelf P-O-P and the like.""Point-of-purchase materials are a staple of the beer business," concludes Coors' Saunders. "And to be exciting, unique and get the retailers and the consumers interested is a major task. Sometimes you're successful, sometimes you're not as successful. But it's an on-going process that's expensive and important."

Bottoms Up: Liquor P-O-P Report

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