The bulk of the estimated 10% increase in spending planned for 2000 will go toward keeping Jack Daniel's and Finlandia on their strong growth tracks, and Brown-Forman also will intensify its attention on Southern Comfort, repositioning the liqueur as a high-end brand.
The U.S.' sixth-largest spirits company expects its global marketing budget for spirits and wines to top $240 million this year, said Paul Varga, director of spirits marketing for North America. Of last year's $220 million budget, about 20% was devoted to the U.S., according to Competitive Media Reporting. Jack Daniel's and Finlandia got the biggest shares.
"In 1996, we saw favorable conditions on the horizon -- demographics and the economy were getting good -- so we invested in a more meaningful way in advertising," Mr. Varga said. And that trend continues.
While Brown-Forman's overall spirits sales rose just 1% last year -- lagging slightly the industry's 1.5% increase -- the investment appears to be paying off for Jack Daniel's and Finlandia, according to industry publication Impact.
RECORD SALES AHEAD
Sales of Jack Daniel's Tennessee whiskey rose 6% last year to 3.5 million cases, the highest level since the 1980s and closing in on its all-time high of 4 million cases in 1982, according to Impact.
As the country's No. 1 bourbon, and Brown-Forman's top seller, premium-price Jack Daniel's continues to gain share, climbing to 27% of its market in 1999 from 20% at the beginning of the decade. Brown-Forman started intensifying its efforts for Jack Daniel's in 1996, and that year bumped Jim Bream Brands Co.'s Jim Beam from the top spot.
Frank Walters, Impact's director of research, credited marketing muscle with Jack's resurgence. The brand received twice as much support as did Jim Beam in 1998 -- about $20 million for Jack Daniel's vs. less than $10 million for Jim Beam.
Simmons Durham, St. Louis, handles Jack Daniel's advertising.
Finlandia has benefited from increased attention as well as a hot market for vodka. Sales of Finlandia climbed 9% in 1999, and have risen by more than 25% since Brown-Forman became the vodka's importer in 1996 and moved it to a premium-price level.
"The vodka business is really hot. We're really encouraged with [Finlandia] cranberry, and we're going to do more in flavored areas as we go along," Mr. Varga said. "Repositioning efforts put in place over the last three years have helped boost our presence."
The Finlandia account is currently in review; Martin Agency, Richmond, Va., is the incumbent agency.
Joining the marketing fast track in 2000 is Southern Comfort, the U.S.' No. 2 liqueur brand. Southern Comfort saw sales rise about 2% to just over 1.2 million cases in 1999 -- slightly above the '95 figure, when the spirit bottomed out at 1.165 million cases, according to Impact.
Southern Comfort's growth pales in comparison to that of the domestic cordial segment, which grew 6% in 1998, the latest year for which data are available.
Brown-Forman will reposition Southern Comfort upward from a midprice brand, Mr. Varga said. ID8, Los Angeles, handles Southern Comfort on a project basis.
Mr. Varga said the strategy of focusing on specific brands and pushing them toward the higher end will remain the same over the next few years.
"Once you get those strategies in place, it's really helpful to stick with them and support them," he said. "Now we're just fueling the fire. . . . The environment here in the U.S. really favors premium brands."