Why Not Nab a Hot Brand? Just Look at Svedka Deal

Industry Wants Vodka's New Owner to Ax Edgy (but Effective) Campaign

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CHICAGO (AdAge.com) -- So you want to add that hot, edgy brand built on provocative advertising and buzz building to your company's portfolio? Be prepared: Buying it may force you to abandon the very strategy that made it successful -- or suffer the wrath of your peers.
Svedka has repeatedly been slapped by the Distilled Spirits Council of the United States for flouting the trade group's code against depicting 'graphic or gratuitous nudity,' among other things.
Svedka has repeatedly been slapped by the Distilled Spirits Council of the United States for flouting the trade group's code against depicting 'graphic or gratuitous nudity,' among other things.

That's the dilemma faced by Constellation Brands, fresh off its $384 million purchase of Svedka, the renegade vodka brand that climbed to the top with steamy, innuendo-laden ads. In snatching up Svedka, the No. 5 imported vodka with sales up 60% to 1.1 million cases last year, comparatively conservative Constellation is hurtling toward an unprecedented marketing-standards standoff.

Flouting ad guidelines
While the liquor industry adheres to a responsible-practice ad code that has helped it win a long-standing battle to advertise on TV, Svedka has repeatedly been slapped by the Distilled Spirits Council of the United States for flouting those guidelines.

Svedka's ads have been cited for violating the trade group's code against depicting "graphic or gratuitous nudity," "sexually lewd or indecent images or language" and degrading "the image, form or status of women," among other things.

As a nonmember, Svedka didn't deign to address the complaints and has boldly refrained from altering or pulling code-violating ads, as Discus members (and many nonmembers) nearly always do.

Now, having been bought by one of the pillars of Discus, Svedka becomes a member itself -- yet it's as defiant as ever. "Constellation bought us for who we are," said Marina Hahn, Svedka's chief marketing officer, whose marketing team will be left intact after the purchase. "We're an edgy, smart brand that's broken through, and we expect to keep doing what has worked well." The deal closes in March.

'Too much at stake'
Doing so would inevitably cause a bitter rift between Constellation and industry stalwarts such as Diageo. "The big guys in Discus -- and Constellation is one of them -- they have way too much at stake to risk it on Svedka," said a longtime industry consultant. "Trust me, they like being able to be on cable TV and they know good behavior and following the code is what put them there."

In announcing the deal, Constellation CEO Richard Sands issued what appeared to be a ringing endorsement of the brand's marketing: "Svedka's phenomenal success is largely due to the eye-catching and effective marketing and advertising campaigns that reach a key segment of the young-adult market."

And a Constellation spokesman said no decision had been made to change existing ads or to instruct Svedka to adhere to the Discus marketing code going forward. "Historically, we have worked with Discus," he said when asked whether Svedka would be forced to adhere to its code. "But without any specifics from [Discus], I can't address that."

Betting on a new image
The betting though, is that Svedka will clean up its act under new management. "If the Svedka guys think being part of Constellation isn't going to change things for them," said the industry consultant, "they are living on a river called denial."

Constellation, which markets Corona beer and Robert Mondavi wines, among other brands, spent $142.4 million on advertising during the fiscal year ending Feb. 28, 2006. By comparison, Svedka's $700,000 in measured media, handled in-house, is a pittance.

But its ads certainly got it notice. The current Svedka campaign -- which is set in 2033 and stars a socially uninhibited fem-bot -- is far from its raciest or most envelope-pushing. Past efforts featured nudity and more overt sexual content. Even the current effort, begun in 2005, however, has run afoul of Discus' code. During its most recent complaint review, the organization took issue with Svedka cocktail-recipe language that encouraged a drinker to "just pour his ingredients into your chilled vessel. ... Repeat until satisfied."

According to a Discus spokesman, there is no precedent for a brand owned by a member company disregarding its marketing code -- and with good reason, as the industry's ad standards have helped it gain access to cable TV and other media that had long eschewed liquor advertising.

"We've historically had 100% compliance," the Discus spokesman said. "And we've been given no reason to think that won't continue."

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Svedka's ad transgressions

2004: Discus board rules that the website's images of barely clothed women on all fours acting as vodka serving trays violate "generally accepted contemporary standards of good taste." Discus also finds Svedka guilty of "relying on sexual success as a selling point for the brand" and degrading the "image, form or status of women."
Svedka did not respond to the decision.

2005: Discus board rules that print ads showing, among other things, a woman's bare breasts squeezed together to hold a glass being filled with vodka violate a Discus code provision barring ads that "contain or depict graphic or gratuitous nudity ... promiscuity, or sexually lewd or indecent images or language."
Svedka did not respond to the decision.

2006: Discus board rules that the website's invitation to "Pleasure all 17 of your erogenous zones with Svedka" and a description of the brand's fem-bot mascot as "wired for fun, flirting and the occasional foursome" are at odds with the organization's marketing code.
Svedka did not respond to the decision.
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