Scotch & Cola - marketing

Cheers, March, 2000 by Nicolas Furlotte

It's always Scotch & Coke for hip twenty-somethings in places like Paris, Barcelona and Buenos Aires. But will it catch on in the U.S.? Several brands are making big bets that Scotch & Cola will be the next big drink.

In the men's rooms at any number of sports bars and hot spots catering to twenty-something men in Providence Denver and about 20 other U.S. markets, there are strategically placed posters for Cutty Sark featuring voluptuous, retro-style pin-up girls (who just happen to be former Playboy Playmates of the Year). In other similar locations, there are posters promoting "J&B Cola."

These and related efforts by other leading brands of blended Scotch are part of a large and ambitious marketing drive to recruit younger consumers. There are elaborate new marketing programs including extensive on-premise merchandising, concert promotions, web sites and a whole lot more.

Most telling, perhaps, is some of the new advertising which ranges from the hip, edgy and retro to the more sophisticated and whimsical. The new campaigns all seem destined to resonate with their respective 21- to 35-year-old target consumers.

At the same time, several marketers are tossing aside the "country club rules" of Scotch usage -- neat, on-the-rocks or with a splash of water -- in favor of a more radical mixology: Scotch with Coke, Mountain Dew, lemonade, ginger ale or just about anything else that appeals to the sugared sensibilities and sweet palates of 21- to 35-year-olds. It's about breaking down some of the category's traditional taste barriers and leveraging some of the beverages this crowd already mixes with their Jack Daniel's, Absolut, Jim Beam, Bacardi, Captain Morgan, Crown Royal and other fashionable brands.

To Scotch connoisseurs, all this may seem like heresy. But the purists are beside the point. They're already Scotch loyalists or single malt elitists, and unlikely to leave the fold in either case. Instead, what's happening is a major effort to develop a new generation of Scotch drinkers. While each of the leading brands faces its own particular challenges, the general dilemma confronting the category is this: a disproportionate share of Scotch drinkers are men 50 and older, most of whom will consume less as they continue to age. Compounding the problem is that they haven't been replaced by new consumers. Thus, Scotch consumption has declined from a peak of more than 22 million cases (mixed) in 1979 to 8.4 million cases (mixed) or about 9.5 million cases (9 liter) in 1998, according to the authoritative Adams Liquor Handbook. And while the actual consumption of Scotch declined 62% during that period, the category's share of total distilled spirits consumption dropped from almost 14% to less than 7%.

Nowhere is this quandary, as well as the category s new direction and future potential, more starkly revealed that in the fortunes of two brands, Cutty Sark and J&B. In their heyday, these brands sold millions of cases a year. In fact, in 1978, J&B was the category leader with annual sales of about 3.5 million cases. In 1998, however, J&B had sales of approximately 615,000 cases while Cutty Sark recorded sales of 285,000 cases.

The new J&B campaign forgoes traditional Scotch advertising imagery in favor of an off-the-wall, primitive poster-art style that heralds "J&B Cola" in almost all its executions. The campaign is currently in six test markets (Denver, Boulder, Madison, Milwaukee, San Diego and Providence) where the brand is now posting double-digits gains.

But Scotch and cola? Although the combination has not been a traditional favorite in the U.S., cola has been a critical catalyst in the rapid growth of Scotch over the past decade in countries such as France, Spain and Argentina.

Cutty Sark is also redefining itself to fit in with the tastes and lifestyles of its new consumer target: 21- to 30-year-olds. As a result, Skyy is promoting non-traditional usage including Cutty and Coke, Cutty and lemonade, Cutty sours and Cutty with any mixer that appeals to younger drinkers.

To reach these younger drinkers, who typically know little, if anything, about Scotch, Cutty Sark is focusing on two areas of special interest to men -- women and music, Over the past few months, Cutty Sark has sponsored more than 90 concerts featuring up-and-coming rock and roll acts. The venues are typically smaller clubs that provide the brand with good consumer sampling opportunities.

In addition, Cutty Sark has gone back to the future to develop some of the industry's most visually arresting and instantly memorable advertising. The premise is simple: a campy sendup of 1950's calendar girls in tastefully provocative poses aboard yachts (a nod to the brand's traditional nautical imagery) along with a discreetly placed bottle of Cutty. The evocative effect is all in the glamorous, retro-style execution. It is exquisite.

With less at stake than their larger counterparts, it is easier for brands such as Cutty Sark and J&B to make dramatic shifts and oversized bets. The risks are greater, however, for the bigger, growing or higher-priced brands -- Dewar's, Johnnie Walker, Chivas Regal. Nonetheless, these three brands also recognize the need to aggressively go after younger consumers and have developed new marketing programs to reach them.