Friday, July 3, 2009

One More Effen Thing.

This is the final part in a three-part series about recent moves by Beam Global Spirits and Wine. Part one is here. Part two is here.

For the past decade, Beam has been part of various distribution alliances which helped it and its partners compete more effectively against Diageo, the world’s largest drinks company. Until recently, one of Beam’s partners was Absolut Vodka. When Absolut came up for sale, Beam sniffed around but the prize went to another sometimes-partner, Pernod Ricard, which immediately ended the distribution compact.

Beam wants to be a major international distilled spirits producer but you can’t be a major international distilled spirits producer without a premium vodka.

The closest thing Beam has now is Vox. Never heard of Vox? Exactly.

Effen Vodka isn’t a major brand, far from it. It is a tiny blip on the radar screen but Beam sees potential, as it does in Cruzan Rum.

The biggest problem with Effen is that its Achilles heel is also its only asset. The brand’s whole selling proposition is a dirty joke. Calling a vodka “Effen”—regardless of whether it really does mean “smooth” in Dutch—is the lowest form of drunken frat boy humor. At best, it is funny once.

Beyond that, what? It’s imported from the Netherlands (so is Vox, by the way)? It’s distilled five times using a patented distillation process? So Effen what? To borrow a metaphor from Terry Sullivan, it doesn’t matter if it is filtered through the hair of 1,000 Dutch virgins. This product’s name is one that can be spoken only by smirking adolescents, albeit of legal age.

Can you think of any major brand based on a vulgarity? Maybe Hooters, but they at least deliver on the name. What is Effen’s brand promise?

“Effen Vodka is an excellent fit with our brand portfolio, and we’re excited to put our sales and distribution muscle behind it to accelerate the brand’s growth,” said Matt Shattock, president and chief executive officer of Beam Global Spirits & Wine, in last week’s press release. “Effen has built a strong following in select markets, and we believe our sales and marketing organizations can help expand distribution and build excitement for Effen in many more markets in the U.S. and around the world.”

With annual net sales of approximately $10 million, Effen’s distribution is currently concentrated in Chicago, Southern California and major Florida markets. The Effen product line includes Effen Vodka, Effen Black Cherry Vodka and limited edition Effen Raspberry Vodka.

The Effen ad pictured here is not Beam’s. It was done by a previous owner. Can Beam afford to walk away from that positioning? What else does Effen have?

Building a vodka brand to rival Absolut may be a pipe dream anyway. Haven’t consumers finally begun to realize what “100 percent grain neutral spirits” means? Aren’t most major vodka brands exclusively pushing their flavored expressions? Yet Bacardi paid 2.2 billion for Grey Goose in 2004, and Pernod paid $8.3 billion for Absolut in 2008, so apparently vodka is not over yet.

The die is not necessarily cast. Perhaps Beam just sees Effen as a profitable niche brand for up-market vulgarians, but you can hear in Shattock’s words a belief that Effen just might, in time, fill the void left by Absolut. The scary part is that Beam has such a great track record he may be right and Effen will be the biggest Effen thing since Grey Goose.

No comments: