Curtain falls on sex and glamour

Bacardi-Martini has never shied away from trading on its Cuban origins to give its drinks a sexy Latin image. Even though the company was thrown out of Cuba after Fidel Castro seized power and nationalised all its assets, Bacardi-Martini repeatedly used the promise of Latin charm and hedonism to sell its white rum brand.

But a cocktail of alcohol-infused fun, glamour and sex may not be how Bacardi-Martini seduces young drinkers when it launches Kalyr, a blend of exotic fruit and cream with a “mysterious” alcoholic ingredient, as a direct rival to Diageo’s Baileys (MW last week).

Currently being trialled in Northern Ireland, Kalyr will be aimed at young women and Bacardi-Martini hopes it will knock Baileys off its top spot as the most favoured cream liqueur brand. The drink – the company’s first cream-based product – is part of a move to boost Bacardi-Martini’s limited range of brands and to help it compete against much larger rivals Diageo and Allied Domecq.

Abandoning its strategy

However, Bacardi-Martini may veer away from the proven sales drivers of sex and frolics when it comes to launching Kalyr. The company is known to be undergoing a significant shift in its marketing and advertising strategy, and is expected to no longer evoke the gay abandon of an exciting night out. This move has been triggered by a regulatory climate favouring the promotion of sensible drinking and threats of a crackdown on drinks companies using glamorous advertising images to sell their brands.

Only last week, Home Office minister Hazel Blears told the drinks industry that it faces legislation if it does not stop using advertising to “glamorise” alcohol. Her comments come after the launch of the Government’s Alcohol Harm Reduction Strategy report, which carried a thinly veiled threat of government regulation should the drinks industry fail to voluntarily cut down on the use of inappropriate sexual imagery.

For many years, Bacardi-Martini has, like other drinks companies, been guilty of using glamour and sex in its advertising. Images of Bacardi rum being splashed around by party animals or Bacardi Breezer’s Tom Cat enjoying the excesses of the Latin spirit have permeated its advertising. A company spokesman says that images of “alcohol being splashed around” will no longer be used in any of its ads. This marks the end of an era, according to one industry insider, who adds: “The party is over for Bacardi-Martini.”

Explicit warning

The company was last year identified by the Amsterdam Group, the European forum for responsible drinking, as being the worst offender in using imagery that it considers to be too sexually explicit in its advertising.

Helmut Wagner, director-general of the Amsterdam Group, says: “In this industry, nobody is whiter than white. In the UK, there is a lot of pressure for increased industry self-regulation, which should give both the advertisers and the ad agencies an opportunity to be more clever and creative. Sex has sold alcohol for too long.”

Campaigns that in the past have pushed the limits when it comes to sex also include an ad for Diageo’s Smirnoff Ice, which suggests that a couple are having sex in an opera box; a Carling ad showing a man licking his flat and his loo clean; and a Bacardi Breezer promotion involving a young woman in a coffee shop having an orgasm.

However, it is not only sex that has been an issue for Bacardi-Martini, which was recently forced to pull the Vinnie Jones Latin Quarter ads after he was convicted for a drunken air-rage assault last year. Hugh Burkitt, chief executive of the Marketing Society, says: “I was never in favour of the image of Vinnie Jones striking exactly the same pose as in Lock, Stock and Two Smoking Barrels, but instead of shotguns over his shoulders he had Bacardi bottles.” The former football hardman, who was brought in three years ago to update the brand’s image – formerly represented by some scantily clad women on a beach – has himself been replaced by an unheard of Italian actor, Raoul Bova (MW April 8).

Burkitt suggests that drinks advertisers need to take lessons from Interbrew’s lager brand Stella Artois, which has based its advertising around its heritage rather than sexual bravado.

Gwyn Jones, managing director of Bartle Bogle Hegarty, says the alcoholic drinks sector tries to create great advertising and for that reason campaigns sometimes sail a “bit too close to the wind”. He adds that the challenges for the drinks industry are no greater than those faced by other sectors and will not lead to dull advertising.

Message in a bottle

Bacardi-Martini is far from being one of the first to try and incorporate changes to its advertising in an attempt to be seen as a responsible company that does not promote under-age or binge drinking. Diageo has already started a responsible-drinking campaign, created by Abbott Mead Vickers.BBDO, while Coors, which makes Carling, has got together with Celtic and Rangers football clubs to roll out a campaign discouraging overindulging in alcohol. The current ads starring Raoul Bova have been created by McCann Erickson and the now-defunct Ben Mark Orlando. Both agencies also worked on the launch of Kalyr.

Current regulatory concerns will make what is already a difficult task even harder. Bacardi-Martini is not known for its strength on new product development and this year was forced to axe spritzer Coomira Coast, as well as Martini Spiroto, both of which have been introduced in the past three years. Unveiled last year, the spritzer was the company’s first significant product launch since Bacardi Breezer in 1994 and, like Kalyr, was also aimed at women who had outgrown mainstream ready-to-drink (RTD) brands.

However, Bacardi-Martini is at pains to point out that Kalyr is in the process of creating a whole new category with its mix of fruit and cream and is not simply competing against Baileys. Industry insiders insist otherwise. One says: “The product, which is a poor man’s Baileys, does not look good, it does not taste good. I will be very surprised if it succeeds.”

He believes the company is under pressure to repeat the past success of Bacardi Breezer, which was once the most successful RTD brand. But Bacardi Breezer, like the entire RTD market, is suffering as the sector has become unfashionable.

Value sales of Bacardi Breezer fell by 22 per cent in the RTD sector last year, while total value sales of &£1.2bn for the category were down eight per cent in 2003, according to figures from AC Nielsen. Ian McLernon, marketing director of drinks retailer Unwins, says the slowdown in RTDs was inevitable because the sector has been choked by copycat products and dulled by familiarity.

Sales force

Industry insiders also doubt whether Kalyr will be enough for Bacardi-Martini to compete at the same level as Allied Domecq and Diageo. Allied Domecq and Diageo, which recorded &£474m in UK sales in 2003, both have much larger portfolios. Bacardi-Martini’s sales of &£382 in the 12 months to the end of March 2004 come primarily from Bacardi, Martini and Bombay Sapphire. In the UK, the company also handles the distribution of Glenmorangie Malt Whisky, Drambuie Liqueurs and through a distribution agreement with Brown Forman Brands also sells Jack Daniel’s, Southern Comfort and Finlandia Vodka.

Bacardi-Martini is quick to talk up its brands and says it enjoys a 40 per cent share of the premium-packaged spirits market with Bacardi Breezer and Original Metz. It also claims that Martini Vermouth dominates the vermouth market with a 47 per cent market share and that the brand is the largest within the speciality market, which includes Archers, Malibu and Baileys.

The Bermuda-based company, which is wholly owned by the Bacardi family, is considering beefing up its financial war chest to compete with rivals by issuing new shares. In the past, it has tried to fill the gaps in its portfolio by acquisitions, teaming up with Brown Forman in 2001 in a bid for Seagram brands – Chivas Regal and Glenlivet Scotch whisky and Martell brandy. But it lost out to Pernod Ricard, who joined Diageo to acquire the business.

Bidding war

One City analyst says: “Allied Domecq is waiting for the Bacardi family to issue new shares, and there is a likelihood that the move could lead to a bidding war between Allied and Pernod Ricard.” The analyst adds that some family members are also pushing for a tie-up with another drinks company, with Allied seen as the favourite over Pernod.

The French drinks company co-owns the Havana Club brand with the Cuban government and has trademark rights to the name in the US, but is unable to market the drink there because of the US’s trade blockade of Cuba. However, Bacardi-Martini claims the trademark was fraudulently obtained and has appealed against a decision by the US patent office, which rejected an attempt to cancel Pernod’s ownership of the brand. If the trade embargo is lifted then Pernod’s brand would be the first genuine Cuban rum to return to the lucrative American market, where it would be a threat to the Bacardi brand.

Much to the chagrin of Bacardi-Martini, its past has come back to haunt it. Unwanted publicity recently came in the form of a BBC3 documentary hinting at the Bacardi family’s attempts to bankroll assassins and terrorists in a bid to overthrow Castro’s regime.

Far from bottling its spirit, Bacardi is trying hard to shed its image of intrigue and instead in its attempt to take on the big boys. However, it may be forced to give up its status as a 100 per cent family-owned company in order to do so.