IDV needs global vision for brands

IDV is two-thirds through its 291m restructure, designed to free up cash for marketing campaigns. But the GrandMet drinks division must ensure that it adds global consistency to brands such as J&B.

In Spain they pronounce it Hotter Bay, in China it’s Zaynbee. But for the English it’s just good old J&B. As well as being pronounced differently in various parts of the globe, the marketing of the world’s second biggest whisky brand also varies considerably. And that is a growing problem for its owner International Distillers & Vintners (IDV).

As a result, one of the most immediate tasks facing the Scotch whisky’s newly appointed chief executive Richard Watling (MW March 7) is to make sure J&B puts out a common brand message from Barcelona to Beijing, and from Barnsley to Bahia.

“J&B needs to consolidate its global position. Johnnie Walker and Chivas Regal have done it, and seem to have a consistent positioning,” says one J&B insider.

A new campaign through Young & Rubicam broke in Spain last week, underlining the point, and hinting at a future direction. “It is indicative of the approach,” says a J&B spokesman. “The yellow and red is clearly J&B but there are different campaigns in different markets. The Smirnoff through-the-bottle advertising campaign has transferred across the world in 40 countries.”

Allied Domecq has attempted to achieve this in Europe with Ballantine’s Finest. It has launched a two-year European advertising campaign through agency Publicis under the title “inspiration”. But this has not prevented global sales dropping.

The search for global brand values is one that IDV is pursuing across its top international lines: Smirnoff, J&B, and Bailey’s. But instilling coherent identities across IDV’s brands will require a degree of stability among the company’s top marketing personnel that has been missing during the past 12 months.

The changes follow the 291m, three-year IDV restructure programme, which started in 1995. It slashed costs and released funds for marketing support. Part of its objective is to clarify the relationship between brand-owning companies and distributors in local markets.

The restructure followed the recession, which saw all spirits brands hit by falling sales in Europe and the US. IDV’s ultimate owner GrandMet merged its central office and the two IDV head offices in London into a single headquarters. There was a total of 50 job losses – 25 from marketing. It axed the role of director of strategic planning held by Colin Gordon and handed his role to a new president of international marketing Alan Cordery.

GrandMet also shuffled its management, promoting IDV chief executive John McGrath to group chief executive. His replacement at IDV joined a year ago this month – American Jack Keenan, previously chairman of Kraft Foods International.

McGrath has promised to build brands and increase profitability through more advertising, better innovation and leaner management.

But there have been rumblings of discontent from IDV’s marketers. One insider told US business review the Delaney Report last May: “The financial people have had an undue influence. There’s a lot of bean counters who aren’t very imaginative.

“Keenan is going to have to clean the house and bring some marketing people in. There haven’t been any real new products to speak of. There has also been a disturbing pattern of not supporting brands showing signs of life.” Under Keenan, insiders say IDV is moving away from a “value-based” view of brands – evaluating them on their sales and costs – towards building brand equity through marketing.

Cordery was brought in from South American food company Molinos Rio de la Plata last October. He filled the position left by Paul Curtis, who six months earlier was promoted to group marketing director for all GrandMet brands, from Burger King and Häagen-Dazs to Smirnoff. Ironically, Curtis then decided to take early retirement.

J&B has been hit hardest by instability, losing chairman David Maxwell Scott, who left in June last year to join Highland Distilleries as sales and marketing director. Soon afterwards, J&B’s chief executive Chris Banks left to join Coke – only six months after taking the post.

Both Cordery and Watling have come in to the London head office from developing markets. Cordery has his South American background and Watling was managing director of IDV Asia. These emerging markets are crucial to IDV’s development. Its core markets in the US and Europe are stagnating and its brands are coming under increasing pressure from changing consumer trends.

For all spirits makers, Asia is the global hotspot for future sales, and the area where top premium brands have the best chance of success. But IDV admits Asia is one of its weakest areas, so bringing in Watling looks like an attempt to use his know ledge of marketing in that continent to push J&B: for example, he was res-ponsible for creating a joint venture to produce Smirnoff in China.

GrandMet’s results presentation last December showed emerging markets were the fastest growing for IDV’s brands, with profits up nine per cent at 47m. IDV is strong in Latin America, with leading brands such as Dreher Conhaque. An IDV spokesman says: “We don’t have a major position in Asia Pacific and we are looking to address that.”

New figures from drinks research company Impact International indicate the first signs, for some time, that the rest of the spirits market is on the point of recovery.

Impact’s latest estimates of spirits sales for 1996 suggest the trend of falling volumes seen over the past five years is being reversed. While the top five spirit brands lost 3 million nine-litre cases between 1990 and 1995, they managed to add 300,000 cases between 1995 and 1996. But IDV’s Smirnoff and J&B failed to improve their volumes, though Bailey’s added 100,000 cases (see chart).

IDV boss Jack Keenan, 62, will be praying that the new top marketers will stick around long enough to establish the stability that the company so greatly needs to exploit the first signs of global recovery in the spirits market.

If he can bed down IDV’s restructure, establish global positioning for the brands, take advantage of increasing sales, and get a stable team of marketers, he might look forward to a happy retirement. And J&B might be pronounced in the same way all over the world.

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