Carillon Importers: Showcasing Premium Spirit

Over the past decade, the marketing department at Carillon Importers Ltd./IDV North America has produced what many consider to be some of the most elegant and eye-catching P-O-P in the business -- displays that elevated premium-tasting products like Absolut vodka, Bombay Sapphire gin and Stolichnaya vodka into premium sellers.Now, recently moved to the 19th floor of the Parker Plaza in Fort Lee, N.J., the company faces an uncertain future. Currently, Carillon operates as an autonomous entity within International Distillers and Vintners (IDV), the liquor division of the British conglomerate Grand Metropolitan PLC, which owns Burger King and Pillsbury among others. But that could change.As P-O-P Times went to press, GrandMet was in the process of hammering out the terms of a merger with stout brewer Guinness PLC. How the merger will ultimately affect Carillon was then undetermined. However, in December, the parent company announced the sale of Bombay gin, Carillon's number two brand and the subject of some of its most exciting P-O-P.Just as it built up Absolut only to lose it to industry restructuring, Carillon's loss of Bombay comes as a surprise and a disappointment. Yet the department continues to prepare original, innovative P-O-P for some half-dozen other brands, including the replacement for Absolut, Stolichnaya.At gross sales of $94 million last year, Stolichnaya vodka remains Carillon's top import, comprising the bulk of the company's overall annual sales of $133 million.Other brands include Metaxa Greek brandy, Rhum Barbancourt aged rums from Haiti and Gran Centenario ultra premium tequilas as well as cognacs, Italian grappas and several French wines.Approximately 70 percent of each brand's budget goes to advertising, with the remaining 30 percent spread across merchandising, promotion, packaging and special events.Not surprisingly, Stoli tops the budget allotments with a full $20 million spent annually on advertising and marketing. Last year, a P-O-P budget of roughly $6 million produced holiday spectaculars, a permanent floorstand for Stoli flavors, the Cold Shots machine, various case cards and other P-O-P along with value-added packaging and premiums.With the smaller brands that are not advertised, the entire budget goes into merchandising and promotion. The Rhum Barbancourt brand, for example, is allotted about $150,000 a year for marketing, all of which goes toward promotional packaging, table tents and other temporary P-O-P.A Reputation for InnovationThe small but feisty marketing team consists of Vice President of Marketing Services Cary Schwartz, Sherry Astmann, executive administrative assistant, and Ernest Capria, senior vice president of marketing. "There aren't a lot of layers of fat," says Cary Schwartz. The three report directly to President/CEO Michel Roux, whose involvement is immediate and personal.Roux, president and ceo since 1982, is the man behind the now-famous Absolut vodka ads that artfully play off the name and bottle shape. As a result of this campaign, which began at Carillon, Absolut sales increased from 15,000 cases in 1979 to three million cases in 1993, when U.S. distribution rights were lost to The House of Seagram, New York. The following year, Carillon acquired Stolichnaya."With Absolut, Michel took the company in a direction where the brands aren't just marketed as liquor brands," says Schwartz. "He gave them a personality and made them an art. He really changed the industry with that."Roux and his team apply the same fine art approach to the marketing of Stoli and Bombay. For Stoli, Carillon initiated the "Freedom of Vodka" campaign in 1994, commissioning contemporary Russian painters to create variations on Russian constructivist art for use in advertising and merchandising. The original 8-foot by 8-foot paintings adorn the walls throughout Carillon's corporate offices.Similarly, Bombay Sapphire, the gin in the blue bottle, has been positioned as a "precious commodity" through the creation of one-of-a-kind designer martini glasses. Numbering nine to date, these specially commissioned glasses appear in advertising, are reproduced in holiday value-added packs and are displayed in museum cases outside Roux's office.The use of art, according to Roux, enhances the premium status of Carillon's brands. The sophisticated theme targets "the adult who not only can afford the best, but is sophisticated enough to recognize it," he says. "In our advertising, publicity, promotion and packaging, the message is understated but clear: Carillon products raise your quality of life."Innovation figures large in the production of P-O-P at Carillon. Years ago, the company ran the first musical chip ad in a magazine and also produced the first illuminated backbar pedestal run on a battery. The latter, for Bombay Sapphire, lit up when the bottle was removed from the display, calling attention to an order. The Stoli Cold Shot Machine, the first cold drink dispenser to hold eight bottles, continues a long tradition of firsts. "We try to do things that haven't been done before," says Capria.Following InstinctsIn 1996, when Carillon decided to create six new flavors of Stoli, industry old hands cautioned against the simultaneous launch of so many new products. Yet Carillon forged ahead. "Michel feels that you have to follow your own instinct," explains Schwartz. "We've all been in the business a minimum of 10 years. We go out in the field, each of us goes to seven or eight markets, we talk to the retailers, the consumers, we do our own surveys."At Carillon, the experience of employees and vendors weighs more than third-party statistics and trend analyses. Schwartz believes formalized research such as focus groups can provide only limited information, which pales in comparison to "going out and actually talking to the retailers, going to the distributor meetings, going to the trade shows," he says. "You've got to take chances."Daring to risk change is what it's all about at Carillon.Beginning with the Absolut campaign last decade, Carillon has focused on selling the fashion and style associated with buying and serving premium spirits. "Carillon has always tried to make brands more fashionable; it's not just a distilled spirits product," says Capria. "We create aspirational brands."Integral to that brand building is a consistent, cohesive presentation. "Whatever we produce we try to do at the highest quality," Capria continues. "We want to present the best image as a quality brand, not only to the consumer, but also to the trade and to the wholesaler."Managers at Carillon realize designing merchandising materials is more than an exercise in creativity; they are building relationships with consumers, with retailers, with vendors. "It's a people business," says Schwartz. "There's a lot of consolidation going on with distributors, so you have to continually take it upon yourself as a marketer to give them the best materials, the best packaging, the best information available for your brands. Otherwise, you're going to get lost in their portfolio."Today, the quality of presentation is more vital than ever. Changes within the industry are causing both on-and off-premise use of P-O-P to decline. "In the distilled spirits industry, P-O-P is becoming less and less of a factor in stores," Capria says, "especially since a lot of chains and clubs are selling liquor. There's no room for P-O-S. They stack cases on the floor." These stores rely upon signage more than anything else. But independent liquor stores, too, are using less P-O-P, he notes. "Quantities get smaller and smaller," he says.The same holds true for on-premise accounts like restaurants. In the past, groundbreaking P-O-P was created for display on the backbar area. "The way they're designing bars today, there's not much room on the backbar, if there is a backbar," says Capria. In more and more restaurants, backbars are either disappearing or shrinking in favor of storage in wells or overhead racks. Island configurations, which provide more seating for consumers and less display space for brands, are also increasingly designed into restaurant construction and renovations.To control waste, Carillon hesitates to produce large P-O-P runs, instead preferring to order a few thousand units and targeting them carefully. In some cases, this targeted approach involves promoting P-O-P through direct mail. In order to gain distribution and trial of the new Stoli flavors, marketers mailed some 5,500 invitations to on-premise accounts. If the bar or restaurant responded affirmatively, it received a pack of P-O-P including a Shot Pallet, shaped like an oval painter's pallet but holding six shot glasses (one per flavor), waitstaff buttons, laminated drink recipe cards, and oval table tents promoting a flavor of the month. "The idea is to have everything in there so when the bar orders it, it has an instant promotion," says Schwartz.The Creative ProcessThe importer stages three major programs a year: spring, summer and holiday. Each season, until now, Schwartz would prepare displays for the Stoli base brand, the Stoli flavors group, Stoli Gold, Bombay, Bombay Sapphire and Metaxa.Nearly a year in advance of shipping, P-O-P for major programs begins with a look at the already established advertising theme. Following corporate policy, Schwartz then solicits three vendors. He relies on a short list including Design Display Group, Sukon Marketing Communications, Jerry Moss Inc., Atwater Press Litho and Reynolds Metals Co. Recently, he expanded that group to include Henschel-Steinau Inc., whose first effort for Carillon resulted in this year's permanent merchandiser for Stoli."I'll give them the whole nine yards of what I'm looking for -- if I want motion, if I want lights -- but I don't want to limit their creativity," says Schwartz. "Usually I limit them to three designs each. I don't want my suppliers to go into a big expense, because everything's done on spec." Over the course of a year, Schwartz reviews some 190 display proposals (three seasons times seven brands with three vendors offering three proposals each). And that's not counting year-round P-O-P materials that remain in inventory, which Schwartz draws up.Schwartz has a background in graphic design and worked on the agency side before joining Carillon. "It's not rocket science. I can sit at my desk and save a lot of money [by not] going to design firms," he says. "I'm taking the ad and I'm manipulating it to work at the point-of-sale. It's very easy for me to conceptualize that." He gives himself about five weeks, from creative to shipping, to complete inventoried P-O-P. "I'm cutting a middle man out, I'm doing it right here, which saves a lot of time," he notes.Packaging's Where It's AtAs is typical of the industry, about 30 percent of annual sales are captured during the winter holiday season. "A lot of money goes into added-value gift packaging for the holidays. There's more focus being put on packaging because it obviously moves product," says Capria. One reason is an aging consumer market, he says. "Older consumers shop off the shelf more than they do off a display."Carillon typically pairs a bottle and a premium in a special, often foil-embossed package. "For the past three years now, we've replicated the [martini] glass in the Bombay Sapphire ads to go in a value-added pack," Schwartz recalls. This year, marketers experimented with out-of-the-ordinary premiums. "When you go into the stores during the holiday season, you see a lot of clutter in terms of display and in terms of packaging," says Schwartz. "We have to cut through that clutter and come out with something that's original." For example, a colorful music box in the shape of the dome on St. Basil's cathedral in Russia accompanied Stoli in gift packs this year."There are no new ideas," says Schwartz. "It's a matter of taking ideas and rejuvenating them, adding something to them. I think marketers, with all the brand introductions out there, are becoming more savvy, more experimental with creative and production. It's just to the saturation point. Retailers want to dress up their stores, but not with junk."Embracing the FutureFor now, it's business as usual at Carillon, while marketers await news of the final impact of the merger. Speculation is rampant. Potentially, Carillon as a company could cease to exist and the brands in its portfolio would be absorbed by IDV directly. Some say the dismantling has already begun with the sale of Bombay to a third party."The jury's still out," says Schwartz. "Personally, I prefer Carillon staying autonomous and continuing to do a successful job. We can do that job and have done that job. Sometimes you have to leave well enough alone."But, in the coming months, the decision will be made by the new Guinness PLC-Grand Metropolitan PLC (reputed to be called Diageo) whether or not to tinker with the status quo.If Carillon becomes a group within IDV instead of its own company, the production of P-O-P will change in ways yet unknown. Most likely, the department will be required to use only pre-approved vendor lists. And the short, direct line from Schwartz to Roux will probably take on new stops."From my viewpoint, we're a solid company, and we get a lot accomplished with the amount of employees we have," says Schwartz. "But you go with it. If there is change, we'll make the transition."

Carillon Importers: Showcasing Premium Spirit

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