In conjunction with a vibrant Dewar’s makeover of The Moodie Davitt Report website home page to celebrate Lunar New Year, Bacardi Global Travel Retail Managing Director Vinay Golikeri talks innovation, activations, craft trends and what gets him up in the morning with Martin Moodie.
Vinay, Bacardi CEO Mahesh Madhavan told me in 2018 about wanting the GTR channel to be a show window for consumers – offering them products they wouldn’t see in their favourite liquor store. But also about seeing the group’s brands not only selling well but providing an overall experience to consumers that would last a lifetime.
So let’s start by examining how that perspective is finding voice under your leadership. Tell us about Bacardi’s commitment to global travel retail (GTR) as a brand-building channel and a value/volume driver in its own right.
You’re absolutely right Martin, GTR is a key channel for Bacardi. Echoing Mahesh, our driving force in GTR is consumers – they are at the heart of our strategy. We’re in the business of inspiring memorable experiences, not just selling bottles and cases.
So on a global level, we’ve reinvigorated our purpose – the reason we exist – and it’s all about bringing people together, in real life, to celebrate moments that matter. This isn’t trivial. In fact, we think socialising and having fun is an essential part of a well-balanced life. GTR is a fantastic channel for us to do this and there are many trends that play in our favour in delivering that vision. We have a long runway for growth.
“This is the quality over quantity generation”
With 50% spirits growth coming from emerging markets, GTR offers unparalleled inroads for the business and Mahesh, the global leadership team and our board have spent a lot of time in GTR – including in-store on their own travels – observing and understanding the nuances of the travel shopper. We have their commitment in all senses – investment, talent and innovation.
INNOVATION
Innovation, right across the portfolio, has been integral to much that Bacardi GTR has done in recent times – in terms of products, activations and communication. Category and brandwise, where have your key recent priorities laid and where can we expect the focus through 2020 and the Year of the Rat?
The GTR team’s focus is to play a key role in shaping Bacardi’s vision as the world’s leading premium spirits house, loved by consumers for our iconic brands. Innovation will play a key role for GTR in delivering that vision.
We know that travellers seek exclusive products they cannot find back home in domestic markets and gifting is a big shopping mission in GTR. Our innovation is geared to address this insight.
GTR is an attractive market. It’s a key brand-building channel across the entire portfolio and we are growing our market share with new and innovative brand activations across all regions. Emerging market consumers are vital to global brand-building across the Bacardi portfolio, now and importantly as we look way ahead to future decades, and GTR will play an important role in unlocking that potential.
We’re in the front line of that new wave of consumers. The first to meet them on their early trips abroad, it’s GTR that introduces them to our exciting brands with the chance to taste them for the first time. That’s also why advocacy is such a key focus for us and we’re investing significantly in having trained retail ambassadors in-store to engage directly with shoppers and to get ‘liquid to lips’.
What key spirits trends are you seeing?
Two key trends. Number one, when people buy a bottle or order a cocktail, they are looking for quality ingredients. This is the quality over quantity generation and, for us, with premium brands across every category, it’s good news.
The second is that we’re also in a new golden age for spirits and, with a premium portfolio spanning pretty much every category, we’re perfectly poised to take advantage of the global luxury cocktail trend. Our brands are perfect for the ‘shaken and stirred’ millennial generation and in GTR we’re actively leveraging the opportunity of this flourishing cocktail revolution – another trend that we believe is here to stay – with plenty of cocktail demonstrations and, importantly, shopper participation.
People really do love mixing their own cocktails and, when they do, there’s a direct and positive impact on sales. We can inspire them to try it again at home and this is one strand of how we build brand equity and loyalty that transcends GTR and domestic markets.
Any recent examples of that approach succeeding?
Sure. Let’s take the Bombay Sapphire ‘Stir Creativity’ activation with Heinemann at Sydney Airport. Taking something as simple as a gin & tonic, we offered a mechanism for travellers to make memories as they explored and mixed their own twist on their favourite drink. And this was a great chance for us to launch our latest premium gin release, Bombay English Estate, in a market where Bombay Sapphire has a strong market share.
We want to offer exclusives in travel that you won’t find anywhere else. Where possible we combine this with entertainment. Disruptive experiences and personalisations like, for example, with Bacardi Carta Blanca personalised labels, part of our strategy to put the fun in rum.
This has worked incredibly well in airports and in cruise retail locations such as the SMT Duty Free Pier 4 store at the San Juan Cruise Terminal in Puerto Rico. This is a popular day excursion from the ships, just a few miles from the Bacardi distillery, which is the largest premium rum distillery in the world. Vacationers will also have enjoyed Bacardi cocktails on their island visit so this is a great example of how GTR can dovetail with the brand domestically.
Another great example is the 2019 launch of Bacardi Gran Reserva 16-year-old, a GTR exclusive and an important addition to our rum portfolio. It leads our mission to create a clear premiumisation ladder for rum and make the category easier for consumers to understand and navigate.
Looking at Patrón, Mexico is the home of the brand and its heritage. The Patrón bar at Cancún Airport (opened last Spring) is a great opportunity for us to establish and embed the brand on its home territory. Patrón is now fully integrated into the Bacardi portfolio and we’re in global brand-building mode. An example being the Chinese New Year pack on sale now which builds on the popular Mexican heritage tin collection with a new design launch every year.
Grey Goose has been the number-one premium vodka in GTR for several years and is the lead contributor to category growth. Our latest innovation, launched in summer 2019, is the City Packs Collection developed especially for GTR, celebrating key iconic cities like Singapore, Paris, Dubai, New York and others. A fantastic way to remember your travels either as somewhere you’ve been or that’s on your bucket list.
Any previews you can talk about?
We have a lot of innovation up our sleeves for 2020 and some of that is in gin and vodka and I’m excited about those as they’ll bring more differentiation and category disruption. That’s all I can say for now but what I can add is that we are excited with our very latest current launches this month – Craigellachie 39-year-old launching today (23 January) with World Duty Free at Heathrow.
This is the oldest and rarest Craigellachie available to buy in GTR right now. It’s a good example of the significance of this channel when the company chooses GTR as the market for this ultra-premium release of only 138 bottles at £3500 (US$4,580). I can tell you that we have already sold several bottles today at Heathrow.
“Premiumisation is opening up the category to new audiences who are realising that rum can go from flip-flops to fine dining”
We also partner with several customers to create special exclusives for them. The latest Bacardi launch – just this month – has been developed exclusively for Heinemann and is a Bacardi Cuatro Sherry Cask finish. After ageing for four years in the Caribbean sun, it is finished in sherry barrels and is a good example of our rum strategy where we’ve put significant investment over the last couple of years on premiumising the category.
As I mentioned just now, rum has been quite an untapped category in GTR that we believe is yet to reach its full potential. With Bacardi as a category leader, we are on a mission to maximise the potential of rum in the channel. It’s a great time for rum as premiumisation is opening up the category to new audiences who are realising that rum can go from flip-flops to fine dining.
We now have a robust premiumisation ladder with Bacardi four-year-old, eight-year-old, 10-year-old and 16-year-old. We’ll have more rum innovation for sure so you could say the Bacardi 16-year-old and Bacardi Cuatro Sherry Cask finish are the first in our ambitions for a new decade of rum innovation.
“We’re reigniting our marketing to be the most creative, culturally relevant and digitally forward”
ACTIVATIONS
One of the key travel retail trends of the past 2-3 years has been the ‘big activation’ – bold, interactive (often digitally), multi-sensorial installations, often with a social media component – designed to drive footfall and spend of course but also underline the experiential. Cosmetics companies have been very much to the fore but so has Bacardi GTR in this regard. Tell us how you view such activations and how you go about planning them.
We’re reigniting our marketing to be the most creative, culturally relevant and digitally forward. We’re investing in the best talent and we’re disciplined in our approach to investment.
Big brand installations are expensive and complicated investments and so we choose carefully where and when to spend our money. Above all, it is important to have the right, workable space within a high footfall area and then we can activate in ways we simply can’t achieve in other channels. Our marketing team are focused on creating an experiential strategy to positively disrupt travellers and to fill their journey with fantastic memories and moments that matter.
Recently we’ve seen great success with Grey Goose at JFK with DFS during the US Tennis Open. For the first time, we joined forces with the US domestic market to make GTR part of the bigger campaign at Flushing Meadows, in New York bars and on the travel routes into and out of JFK.
I’ve mentioned the Bombay Sapphire campaign at Sydney, not only did it run in-store but also in the main terminal with leverage at key touch-points along the airport journey and we joined forces with our colleagues in the Australian domestic market to bring in top bartenders from Sydney’s destination bars.
In December at Miami Airport, with DFA, we used the great space in Terminal D to deliver a big campaign for Bacardi featuring cocktails and coconut trees to create a spectacular Caribbean backdrop to showcase Bacardi’s premium credentials.
We’ve worked closely with Grey Goose and Virgin Atlantic over several years to bring elevated cocktail experiences to their guests. In December, the Heathrow clubhouse was home to a Grey Goose cocktail bar and on certain flights during the peak holidays season, we had a dedicated bartender inflight serving up cocktails to make the journey special, including Virgin Atlantic’s inaugural London to Tel Aviv flight, and to reinforce Grey Goose as the vodka partner of Virgin Atlantic.
“We want to lead trends, create exceptional drinks experiences and drive premiumisation”
How do you assess the short and long-term ROI on such campaigns?
As a family-operated company we are in this business for the long term and building brand equity is the core objective. We want to create a strong legacy for our brands and make them iconic for generations to come.
As I mentioned earlier, our vision is to be the world’s leading premium spirits house, loved by consumers for our iconic brands – which means we want to lead trends, create exceptional drinks experiences and drive premiumisation. So, yes, we do have metrics for these activations and they are primarily about how we are building brand equity. Being in the right airport at the right time can give us access to engage with consumers in ways we can’t do in the domestic market.
CRAFT AND NICHE
We’ve just exited a decade synonymous with the emergence of craft spirits as consumers sought differentiation from the mainstream. How much is that a challenge and how much is it opportunity? After all, many of your brands are very much about ‘craft’ in its purest sense. How is Bacardi GTR responding in the age of niche and craft?
We have several real gems in our unrivalled portfolio of incubation brands, and we intend to grow this portfolio, spanning several segments. We’re working on acceleration plans for our Exceptional Cask Series single malts, including Aberfeldy. We have exceptional talent in our whisky team, led by master distiller Stephanie Macleod who leads the craftsmanship of these sublime malts that are flying off the shelves. Expect to see more in 2020 along with Oxley, Teelings and Santa Teresa. Our mission is to build them into future iconic brands that consumers love.
As I said earlier, the breadth of our portfolio means we are well-positioned to make the most of ‘mindful’ drinking and craft trends, and incubation brands play a big role in this. People these days like to try new things and try different cocktails. Gone are the days of a signature bar call. People order different cocktails for different occasions. For a company like us, with premium brands in every category, this gives us a way to reach more consumers.
DIGITAL
We are living amid a prolonged digital revolution in both commercial and communication terms. Where is Bacardi GTR as a digital player?
We are aspiring to disrupt moments that matter on the travel journey, integrating them with domestic markets in joined-up campaigns. Like much of the GTR industry, we are in test-and-learn mode.
You’ve partnered with us on a compelling CNY communication to the trade, a makeover of our home page. Tell us about the importance of CNY (and the Chinese consumer) – and indeed of such seasonal/festive periods in general.
Winning in festivals is a key strategic focus for us, especially around CNY and Diwali. We want to help shoppers – particularly from emerging markets – celebrate festival moments that matter.
Emerging market consumers, especially from China and India, are driven by a discovery mindset and by giving them fantastic festival presentations of key ‘discovery’ brands like Dewar’s, Aberfeldy and Patrón is key to engaging with them, especially when we can showcase them as part of an amazing experience. These brands are invigorating the category, disrupting some of the bigger established brands.
Dewar’s is growing strong double-digit and this Chinese New Year we have a special Dewar’s 18-year-old presentation gift pack available across APAC, including for the first time, South Korea, Indonesia and the Philippines.
Aberfeldy’s rise is phenomenal, so much so that we’re starting to merchandise it as a standalone brand following great success shop-in-shop where conversion rates far exceeded our targets.
The four-month pop-up with Ever Rich at Taoyuan Airport was timed to span the key festival periods of the year. It still has six weeks to run and is working strongly thanks to its disruptive offer, strong visual store presentation and a great brand personalisation experience. This is achieved through a honey dispenser serve and the chance to have your bottle dipped in ‘gold’ wax, emphasising the brand’s golden credentials from the Pitilie Burn.
At launch, we had a packed store full of Taiwan’s top lifestyle and whisky influencers who were wildly enthusiastic about meeting the Aberfeldy Brand Ambassador Matthew Cordiner, who flew in for the event.
MARKET PERSPECTIVE
It’s early days Vinay, but how does 2020 look for you? What are the key challenges and opportunities?
It’s an exciting time that’s for sure and I’m positive about the long-term because the prospects are extremely strong in GTR. The long-term fundamentals are very attractive, despite certain global factors creating short-term headwinds such as the China-US trade matter, the Hong Kong situation, the coronavirus, potential allowance implications in India, political instability in Lebanon and forex issues in Brazil.
As a family-run business for 158 years now, Bacardi has survived and thrived during all kinds of transformation and turmoil; we’re a company that gets change. And as the world’s largest privately held spirits company, free from market pressures, we have an entrepreneurial culture and structure to do the right thing for our brands, our people and our partners for the long-term.
The most important opportunities I see are with emerging market consumers, optimising digital, continued investment in our innovation, creating really memorable experiences and most of all how we use GTR to create a strong legacy for the future of Bacardi.
PERSONAL
You assumed your current role last April. How are you enjoying the ride so far and what drives Vinay Golikeri? What do you love most about your role in GTR and what most keeps you awake at night?
You’re right Martin, it has been about ten months. That said, I’ve been with the Bacardi GTR team in marketing and commercial roles earlier. The GTR industry is exciting and wonderful and the two things l love the most about Bacardi GTR are, firstly working with a passionate and extremely talented team. They are so full of passion, talent and energy, and it’s incredibly motivating to work with them.
Secondly, our Bacardi culture, which is centred on 3Fs: fearless, family and founders. At our best, we are the most agile and entrepreneurial spirits company and we’re committed to being as diverse as the consumers we serve. We are guided by doing the right thing for our people, our partners and our communities. These are all key drivers for me, with the commitment and belief we have from the Bacardi management.
The Bacardi team and our Bacardi culture, being empowered and supported, is what makes me sleep well and get out of bed each day energised. I want us, as a team, to collectively deliver every opportunity there is to create a strong legacy for Bacardi brands globally in GTR and have the business in an even better shape for future generations.
