Less than a year after a major acquisition doubled its scale, Fortune Brands' Beam Global Spirits & Wine is mobilizing an enlarged marketing group, consolidating its media buying and looking overseas to bolster an uneven booze portfolio in a generally hot spirits market.
Beam last summer acquired former Allied Domecq brands from Pernod Ricard including Sauza tequila, Maker's Mark whisky and Courvoisier cognac. The deal not only swelled Beam's revenue to $2.5 billion from $1.2 billion, but also increased international sales to 45% of the distiller's total from 25%.
"We had one global brand-Jim Beam-and now we've got seven," said Chief Marketing Officer Beth Bronner. "That gives us a great opportunity."
Ms. Bronner and other executives at what's now the world's No. 4 distiller said its new breadth will lead to increased marketing spending throughout its entire portfolio, with an emphasis on Europe and the U.K. The Jim Beam, Maker's Mark and Sauza brands figure to see the largest increases.
Ms. Bronner has nearly doubled the size of Beam's marketing team, from 85 employees in one office to 160 scattered worldwide, and firmed up the marketer's agency relationships. Beam named Omnicom Group's BBDO Energy, Chicago, as the agency of record for its pre-acquisition brands, including Jim Beam, Starbucks Coffee Liqueur and Dekuyper Cordials. Publicis Dialog handles the acquired brands.
While both of those agencies were incumbents, the fast-expanding media account for the entire group has shifted to Publicis Groupe's Zenith Optimedia, which previously handled some media responsibilities for the Allied brands. Omnicom's PHD previously handled media for Jim Beam and the pre-acquisition brands. Sports marketing and event promotion agency Relay will handle all of the marketer's on-premise work.
The agency decisions were made without reviews, Ms. Bronner said, because Beam was pleased with earlier creative work. She declined to comment on the media switch, although someone familiar with the matter said the move had less to do with dissatisfaction with PHD than with a desire to go with an agency with a global network, a reflection of the distiller's new emphasis on overseas markets.
Among the brands looking overseas for growth is Sauza, currently the world's No. 2 tequila. Sauza will soon be trumpeted by what Ms. Bronner describes as its "first global campaign," aimed at catching No. 1 brand Cuervo.
Alcohol-industry experts said that Allied skimped on marketing and instead relied on price cutting to boost shipments, which did rise 6.7% last year, according to the spirits trade journal Impact. The price cutting runs counter to the trading-up trend sweeping the category, with many producers angling to become the Grey Goose of the segment. "They've inherited some tough issues there," said Brian Sudano, exec VP of consultancy Beverage Marketing. "There's some momentum, but how do they increase the value of the franchise?"
Another brand in a hot segment, cognac, Courvoisier poses a different marketing conundrum: balancing the hip-hop driven sales trends in the U.S. -where brands such as Hennessey (aka "Henn Dogg") are staples in rap lyrics-with cognac's more effete image abroad.
Courvoisier sales were flat last year, while overall cognac sales rose about 4%, according to Impact. Beam Global Marketing VP Larry Plawsky said the brand will receive additional spending this year, particularly in new international markets with growing wealth.
Global Marketing VP David Racicot, who manages most of Beam's whiskey and Scotch brands, said spending will jump 20% on flagship bourbon Jim Beam following a 20% increase last year, when the brand entered partnerships with cable channel Spike TV, as well as sponsorships of major motor sports.
According to Impact, the brand's shipments declined 2% last year, while overall bourbon sales grew 4%. (A Beam spokeswoman says the Impact numbers exclude "ready-to-drink" cocktails that are prominent in Australia. With those included, Beam actually grew 3%, she said.) "Beam is a mid-premium brand while the whole market is trending up toward super-premium," noted Mr. Sudano. "That makes it difficult to extend."
But Ms. Bronner said the brand is still potent, and a top priority: "It's the name on the door, and we take that seriously."
That may be why the distiller is prepping a major international expansion of super-premium Maker's Mark. The brand, which is the top-selling high-end U.S. bourbon, hasn't had sufficient distribution to grow overseas in whiskey-friendly markets such as the U.K. and Spain.
But Mr. Racicot said the distribution networks of acquired brands such as Larios Gin and Whisky DYC, which each rank No. 1 in their respective categories in Spain, combined with increased media spending, should boost the brand. And there's some evidence that strategy is already under way: Last week, Maker's Mark began its first U.K. marketing campaign, turning a fleet of London taxicabs into billboards for the brand.
As for Starbucks liqueur, current shipments-about 100,000 cases per year-have fallen short of projections. "They made a mistake by trying to penetrate the bar and not the house," said Darrell Jursa, president of consultant Liquid Intelligence. "The Starbucks brand doesn't do them any favors in bars."
A Beam spokeswoman wouldn't comment on whether the brand met sales projections, but noted that it was available at retail locations such as grocery stores.