Faced with a growing crackdown on smoking, the iconic lighter brand is using its rugged, adventurous but trusted characteristics to extend its product lines.
The Zippo lighter has a CV to rival the most seasoned Hollywood actor. It has starred in more than 1200 TV shows, theatre performances and films including Die Hard, Indiana Jones and last year’s release Buried.
The brand’s global marketing director David Warfel insists Zippo has no paid-for product placement deals but has achieved fame through its iconic status built up over a 79-year history and the lighter’s ability to perform on cue.
Yet this big screen success is bittersweet. While the company has garnered money-can’t-buy exposure, each starring role continues to reinforce the brand as revolving around lighters.
This conflicts with Warfel’s task since he joined Zippo three years ago, which has been to extend the brand’s life beyond a single product. He is aiming to show global shoppers that the name can stand for more.
“The motivation for our diversification is the pressure on the tobacco industry and by association the effects on our business,” explains Warfel.
Despite brimming over with all-American optimism, Warfel is realistic about the implications of the brand’s association with smoking and the tobacco industry. As smoking becomes more of a taboo activity around the world, with countries implementing bans in public places, Zippo cannot afford to rely on its lighter alone.
“The crackdown on smoking is a global phenomenon and has forced us to support the position that the product is more than a tobacco accessory,” he acknowledges.
“There is no doubt that our most common application is to light a tobacco product,” he admits.”But we have a valuable, highly recognised, positively perceived global brand. It is logical for us to extend into categories that are closely related to heat and flame but to also leverage it among other lifestyle products.”
Those products include a range designed to light candles and camping fires, as well as personal handwarmers, pens, men’s and women’s bags, and, believe it or not, a men’s fragrance.
The scent, says Warfel, is selling so well in Italy that demand has outweighed supply – despite initial scepticism from the media. It plays on the brand’s “rugged, masculine” qualities and sits alongside Zippo men’s accessories such as pens, wallets and small luggage.
Another equally seemingly tenuous brand link is Zippo’s line of women’s handbags, distributed solely in Italy. Warfel claims the brand, in a different typeface to the Zippo master brand, resonates in the Italian market.
Zippo v Bic: The lighter wars
Zippo is a private company that does not release specific financial figures such as profit, but it says sales for this year so far are up 18% on last year’s approximate $200m (£124m). Forty per cent of its business comes from the US, which produces 12 million Zippo lighters a year. Sales in India grew 69% last year, while over the past 10 years, China sales have increased 30% year on year.
Sales in the UK last year increased 5% year on year – 80% came from lighters and 20% from its range of lifestyle products.
The Bic group reported sales of €409.9m (£359.5m) for the first quarter of this year, up 6.6%. Bic’s stationery division brought in €127.7m, up 9.4% and spurred by a strong South American market.
Sales of its lighters came in at €122.9m, an increase of 10.3%, thanks to growth in developing markets. And sales of Bic razors totalled €76.7m, an increase of 11.9%, with growth coming evenly from across the world.
While revenues from Bic’s promotional products business of third-party branded items decreased 8.8%, overall gross profit was up 17.7% to €211.2m (£185.2m).
The bag company already existed, Warfel explains: “After a while of challenging its use of our brand name, we thought: what the heck, we’ll just buy it. We bought the company about 10 years ago and it turned out well because it brought us ahead when we wanted to extend our product line into leather goods.”
Becoming an outdoor and lifestyle brand, however, is Warfel’s main priority. He is realistic about going up against brands that already own this space, such as The North Face or Kathmandu, so he wants to position Zippo more around family campers.
“We are moving into products for the outdoors and I don’t mean hard-core activities like guys who climb Mount Everest – that’s not us,” he insists. “We’re more about recreational family products that are set around the campfire; products to get the campfire lit or firewood carriers. As we move into the home, hearth and patio sector, we are exploring products which support the patio environment, such as small flame heaters, and heat décor items such as tiki [bamboo] torches.”
Warfel is upbeat about the challenge of carrying this all out without changing the brand itself or losing its traditional users.
“In the markets where we have a longer history, such as Western Europe or North America, where there is a strong consumer perception that Zippo means ’lighter’, it will be a little harder.
“The good news is our brand awareness is high, but you have to convert people from thinking vertically to horizontally. They need to recognise that Zippo makes good products, so if we introduce, say, writing instruments, those will be good too.”
Warfel must balance exploiting brand heritage and nostalgia as well as moving ahead with Zippo’s current brand strategy.
“There is a rich heritage I don’t want to dismiss,” he acknowledges. “We are fortunate that Zippo has become a brand with a personality. When people think of Zippo, they think of stories, of their grandfather, of movies, that all the tough guys in high school had our lighters. But I don’t want to dwell on the past. I want to talk about the future and to be a hip, cool brand.”
The way to achieving this has involved pulling together a tight, global strategy from what Warfel admits was previously “fragmented”. He says the company’s management were bold in deciding to move away from relying on their most successful product alone. “The onus for bringing me in was the company recognised the need to change the way they do things.”
Zippo’s recent marketing campaigns are a far cry from the cartoon print campaigns it used in the Fifties, blatantly promoting the product to smokers. Campaigns from the last decade highlight Zippo’s lifetime warranty on its lighters and the environmental element of never having to replace it, compared with disposable lighters.
Zippo is chasing growth internationally, with key markets outside its American homeground including the UK, Italy, France and Germany. Emerging Eastern European markets are also vital, such as Poland, Russia and Romania. The importance of Asia can’t be ignored; Warfel says China is its biggest market outside the US.
Warfel’s media budget alters market by market: for example, the UK, US and China are very social media-oriented, while Italy and Eastern Europe still tend to favour high-impact print and TV campaigns.
Zippo is hoping to tie in all media elements for this year’s global campaign to establish a link with live music, through concerts and music festivals around the world. The activity involves not just sponsorship but experiential elements such as photo booths where images are uploaded to the Zippo Encore music-themed website.
The scent, says Warfel, is selling so well in Italy that demand has outweighed supply – despite initial scepticism from the media
“We are using music as a way of speaking to our audience and to be where they are,” says Warfel. “We are looking at a post-college male audience and research tells us that the one defining personality attribute is music. You can be into computers, extreme sports or fashion design, but everybody in this category seems to identify with music.”
Despite the undoubted need for Zippo to face up to a future where the smoking industry is under greater pressure, the brand’s core product still maintains its popularity. In the UK, 80% of Zippo’s sales still come from lighter products and it’s undeniable that for smokers with a lifelong habit, a Zippo lighter remains a desirable, even fashionable accessory.
When it comes to the stretchability of the Zippo brand, Warfel realises there is a limit, although he says there is no reason why well-selected extensions can’t gain traction. He gives car marque Porsche as an example: “Why does this brand sell pens, wallets and sunglasses? They all conform to a design platform. Everything looks ’Porsche-y’. The pens are metallic and sleek. [Watchmaker] Montblanc has done a great job at this too – it also makes belts and briefcases, and in the store environment it all looks cool together.”
In the lighter game, Zippo and Bic are probably the two names that first come to mind and the latter has had to face similar challenges to Zippo. But Bic’s lighter business is surpassed by its stationery division, which brought in €127.7m (£112m) last quarter. However, Bic’s budget, and even disposable nature, puts it in a different category from Zippo, Warfel claims: “You don’t associate Bic with being a companion for adventure.”
It is this link with adventure that Warfel is hoping will keep the spark alight for Zippo. Its success depends on whether consumers see the link with ’family recreation’ and recognise the Zippo spark beyond lighters.