Sauza mixes up margaritas to go

By Published on .

Buoyed by the success of its ready-to-drink Kahlua line, Allied Domecq is rolling out its second ready-made cocktail as part of the company's strategy to diversify into lower-alcohol beverages.

Sauza's ready-to-drink margarita, which should hit the Northeast by March, entered the South, West and Midwest in September. The brand was tested in Dallas, Chicago and Los Angeles last year. The line targets 25-to-34-year-olds.

The world's second-largest spirits company is not alone in its push toward ready-to-drink mixed beverages. Fresh from the success of its Smirnoff Ice, United Distillers & Vintners is looking at all its major brands to see which would lend themselves to single-serve offerings. Brown-Forman Corp. is expanding its 8-year-old line this spring, adding an 11th flavor to its Jack Daniel's Country Cocktails. Seagram Spirits & Wine Group continues to add flavors to its Seagram Gin & Juice line, and Bacardi now markets four Breezers. Jim Beam Brands offers cola, ginger ale, and tonic mixers with its flagship product.

Even though the lower-alcohol drinks aren't as profitable as the spirits from which they are made, liquor marketers see them boosting volume and gaining access to young people more taken with beer. Mixed drinks also allow the spirits into distribution channels -- such as grocery stores -- that are not legally permitted in some states to distribute beverages with high alcohol levels.

For consumers, cracking open the bottle is more convenient than blending fruit and ice, measuring several different liquors and pouring the concoction into a glass. "Convenience is driving every other category, and [our not having] a more convenient format was really sort of a missed opportunity," said Shamus Hanlon, senior brand manager for Sauza. "There are a whole lot of usage opportunities out there to take the bar with you -- to have a spirit and a mixer and everything that goes with it."

TOP PRIORITY

Allied Domecq executives said premixed cocktails are a top priority for the company. It launched ready-to-drink Kahlua cocktails in late 1997, and added Kahlua Rum Cola this summer. Kahlua Rum Cola ads launched this summer on cable, but no consumer advertising is expected for Sauza's margaritas. Bates Worldwide, New York, is Sauza's agency. BBDO, Chicago, handles Kahlua.

Other flavors are likely next summer for Kahlua, said Matt Wiatt, VP-marketing for domestic equity brands. Premixed cocktails are likely for other brands, but the marketer will be cautious not to cheapen highbrow products by selling them mixed with cola or tonic water.

"It seems a lot more pedestrian to have a premixed gin and tonic -- it could take brand equity down a couple of notches," he said. "But a product like a cosmopolitan has a little bit of cachet to it."

A spokesman for United Distillers & Vintners did not respond to calls seeking comment, but an executive familiar with the world's No. 1 spirits marketer said although it is not close to launching another ready-made cocktail, it is "really very serious about looking at all the major brands."

Sales of Kahlua's premixed cocktails rose 43% from 1998 to 880,000 cases last year, according to drinks publication Impact. Low-alcohol refreshers rose 8% from '98 to '99, according to Impact.

"As we look at the best opportunity to expand usage, this new convenient format is a big opportunity," Mr. Wiatt said. "A lot of people are not that comfortable in their mixing abilities. When you buy things that already are mixed for you, you're pretty sure you're getting a good product."

In this article:
Most Popular