Friday, August 3, 2012

When You're The World's Biggest, What's Small?

In marketing terms, 'niche' is usually a nice way of saying 'little.' One way to grasp just how huge spirits industry leader Diageo really is by looking at what they consider 'niche' brands. This examination became more convenient last September when Diageo created Catalyst, a business unit focused on 28 spirits brands the company classifies as 'niche.' Together they bring in about $250 million a year.

Diago's stated goal is to double that by 2014. The unit experienced a setback when its first president, a 20-year Diageo veteran, abruptly left the company just four months into her new job.

The Catalyst portfolio includes line extensions such as Tanqueray Sterling Vodka, acquisitions such as Stirrings Liqueurs, new products such as Moon Mountain Vodka, and small but venerable brands such as Pimms and Myers’s Rum.

Whiskey enthusiasts will be interested to know that the Catalyst group contains several esteemed single malts: Lagavulin, Glenkinchie, Cragganmore, Dalwhinnie, Caol Ila, Clynelish, Oban, and Talisker. George Dickel Tennessee Whiskey is 'niche,' as are pseudo-whiskeys Jeremiah Weed and Yukon Jack.

The word 'catalyst' has become fashionable in company names without much regard for its dictionary definition, which is something that causes change without being changed. The word 'niche' also seems misused, since it usually means a product or service that appeals to a very narrow and specific audience. One thing true niche brands do not do, almost by definition, is double in size.

If you examine it, Catalyst starts to look like a free-standing luxury brands portfolio, especially if it shed Weed, Jack, and Moon. The single malts are an exceptional collection, and George Dickel is a brand full of potential that Diageo has never quite realized.

No one has said anything about a spin-off, but wouldn't that be nice?

1 comment:

Jordan Devereaux said...

One can dream, but especially when it comes to the single malts, Diageo has stated over and over that their focus is on supplying whisky for JW and I can't imagine that's going to change any time soon. Sadly if their goal is to double revenue, the only place their prices can go is up.