Tom Jago is a pretty extraordinary man.
He's an octogenarian with more energy than most 20-year-olds, more intellectual capacity than a university professor and a gloriously encyclopedic memory.
Lunch with Tom invariably involves oysters (hurrah), the odd whinge about how newspapers still don't fold properly (why don't they? 400 years after the first paper's published and you still need your own folding technique), tales of vintage cars and days when he worked for employers with private planes at his disposal (not quite Learjet plush - this was the 1960s after all when commercial air passengers were members of the jetset).
Tom has worked in marketing, advertising and the drinks business all his life, and I could wax on about his many skills, but recently, Tom gave a talk at Heriot-Watt University in Edinburgh, and frankly it's hard to improve on.
Here's his own truly eloquent discussion of his role in the history of drinks. I've been asked specifically to point out that these are only the author's (Tom's) words and views.
(This might look too long to bother with, but give it a try and post me your views after you've read it.)
First, a bit about me. I grew up in a Cornish village, went to Oxford, away to the war for a few years, then back to Oxford, after which I wound up like many people with some wit but no sense of direction, in advertising. One of my clients was a drinks company called Gilbeys, which hired me. I did some work on new brands for them (they eventually became Diageo), went on to Moet Hennessy, then United Distillers (also Diageo today), then Seagram, who eventually fired me in 1998 (HR probably frightened I might die at my desk). Today I’m consulting, still in the distilled spirits business, because it’s a lovely business, where you meet lovely people in lovely places, and make lovely stuff.
I’m not what you might call a lineal thinker – most of my work has consisted in departing from the obvious path – and I have found it hard to develop a logical, sequential statement today. Excuse me if I ramble a bit; there should be plenty of time for clarifying questions, if needed, at the end.
All the classic distilled spirits have an intrinsically unpleasant taste and smell except for vodka – and that is boring. The same applies to most wines, and certainly to beer.
The stuff may taste nasty, but the consumption of ethyl alcohol gives great pleasure to man. And man has adapted to its use in many and varied ways.
From the time, probably in the 15th century, when Europeans started using spirits, people have sought ways of disguising the taste of alcohol – which was at first foul-tasting and impure because of the primitive equipment then in use. The great classic liqueurs, all sweetened, and almost all based on wormwood, were probably first to emerge, and many survive. The Dutch developed gin, where the base spirit was disguised by juniper.
But drinkers of spirits in Scotland or France or the tropical islands were still confronted by the inherently nasty taste of these drinks. They were not daunted; they found ways of persuading themselves that these tastes were agreeable. Pavlov did the same thing with his dogs, who salivated at the sound of a bell, once they had associated the bell with a plate of meat.
Let me tell you a true story from long ago – 1965, in fact. I had my suspicions about the true taste of spirits even then, and, being involved in selling a bourbon called Old Grand Dad at that time, I was allowed to do some research in the States. As you will see, I would not have been allowed to do it today….
I got together eight men, enthusiastic drinkers of Bourbon, and all claiming to have a favourite brand. We gave each one a taste of his brand, and ascertained that thought it tasted great, just as they expected. The next day (with their permission) we dosed them with sodium pentothal – the “truth drug” – and when it had taken effect, sampled them again with the same whiskey.
To a man, they reacted negatively – some very violently. “I could never drink that stuff!” was the standard reply.
It is clear to me that the motivation to drink alcohol is very deeply buried in the human subconscious – this sounds pretentious but I’m sure it is true. THEREFORE attempts to market distilled spirits must be subtle too. And a spirits brand is bound to be slow-growing, so your promotions must be long, steady and consistent.
From the 17th century until about the middle of the last century, this state of affairs persisted; people trained themselves (unconsciously) to enjoy whisky, brandy rum and schnapps.
They found that there were curious overtones of nose and flavour which could with practice be discerned and appreciated, and this they taught themselves to do. But still, if someone tastes a good malt – or for that matter Chateau Lafite – for the first time, they will find the whisky smells of sick, the wine tannic and bitter.
There was a big shift towards the end of the 19th century, when phylloxera caused a shortage of brandy, and Aeneas Coffey’s patent still made possible the production of blended whisky – gentler and less taxing to the palate. But that was merely a change of emphasis. The situation was essentially static.
Real change began in 1949 when a Mr. Kunett, a Russian émigré in the USA, sold his tiny Smirnoff distillery to Heublein. At the time he was making about 5,000 cases a year. He and Heublein began seriously to promote vodka as the spirit with negligible taste, which mixed with fruit juice, tomato juice, or even ginger beer, to give a drink that was actually NICE. So vodka drinking spread to the civilised world (in Russia, it was never that civilised, the vodka was always sold in 50cl bottles with an aluminium capsule – non-reclosable!)
I was closely involved in this period of change. From 1957 I had been helping an old drinks merchant called Gilbeys with their advertising.
Gilbeys had been smart enough to get the rights to Smirnoff vodka for a large part of the world, so we were engaged in promoting vodka – which was entirely unknown in Britain. We began to understand the revolution that was taking place, although research produced some unexpected results: we used an ad showing young men in their digs preparing for a party. One of them was cleaning his teeth; the advertisement was badly understood, and it emerged after a few enquiries that only some 12% of young English males owned a toothbrush!
And when we claimed that Smirnoff doesn’t give you a hangover, we got the response “What’s the point of having a drink if you don’t get a hangover?” Binge drinking is nothing new, it seems.
The managing director, a man called Jasper Grinling, hired me as marketing director; after a while it became clear that I couldn’t do the job at all. But he didn’t want to fire me, so he gave me an office and a secretary and a budget and said “try and think of some new drinks we might profitably sell”. Which began an era of change in the industry that has gone on ever since.
Hardly anyone was even thinking about developing new products in those days - hard to believe, but true.Round about that time I was talking to the president of Gilbeys Canada, who was at that time the cleverest man in the company, and supporting the tottering Gilbey company by his own single-handed efforts. “What,” I asked him “shall we be doing ten years from now?”
“Exactly the same, but much bigger” was his answer.
Which was not exactly the right answer, as it turned out.
I’m not going to confine myself entirely to the marketing of spirits; there are lessons to be learned from what happened in the world of wines and beers, before the distillers woke up.
For instance, that family of rustic geniuses, the Showerings, inherited a decrepit cider and perry mill, and invented BABYCHAM. This pinched some of the glamorous image of Champagne – fizz – but made it sweet. They had in fact produced a drink that women, and especially young women, could drink in a pub with pleasure and without embarrassment.
Its predecessor was, back in the dark ages before the war, port and lemon – port and fizzy lemonade, a simply delicious drink, as nice as Pimms and cheaper and more natural too. The port trade despised it, because it wasn’t classy, but port and lemon was what made their fortunes; they should bring it back.
Another unfairly despised brand was Blue Nun, which in its time taught millions here and in the USA to like wine; again sweet, easy to drink – in fact the first sample we submitted to test drinkers when we were developing Piat D’Or was Blue Nun coloured red – they loved it.
Research, if it gets you to the truth, should always produce the same answer – so if you are trying to innovate or achieve an advantage over the competition, this isn’t the way to do it – you will always end up with the same positioning.
It is of course sometimes useful, but in the specific case of alcoholic drinks, not to be relied on, given the essentially illogical responses of people to alcohol. Their motivation is so hidden that it’s hard to get useful information by asking direct questions: and focus groups are in my view, the least reliable method of the lot. Consciously or unconsciously, the monitor can and often does skew what he hears – to correspond with his won opinions, or simply to please the client. I have seen both happen. And, as I keep saying, no one will tell you the truth about his feelings regarding drink – mainly because he doesn’t know what they are himself.
Before Baileys Irish Cream was launched, we did some research, since we had no idea what people would think of it. We did four focus groups; the reaction was unanimously negative – everyone hated it; probably because it was so unexpected. I took the decision not to report these results to anyone, and went forward with a tiny test market. The stuff sold faster than we could make it, and we never looked back. Today Baileys is the world’s biggest selling liqueur with nearly 7 million cases a year.
In my experience a lot of research is done for two reasons; to avoid having to make up one’s own mind, and to avoid blame if the project goes wrong. So I would say, try and make up your own mind, and to everybody involved, from the boss downwards, to avoid blaming anyone for trying and failing. We had lots of failures in IDV when I was there; and never a word of criticism came from on high; they saw that it was part of the process of pushing the limits.
One wise man’s informed opinion is probably worth a hundred thousand pound’s worth of research.
It’s probably cheaper, and certainly more effective, to MAKE SOME AND SELL SOME, like we did with Baileys. That way, you have the real, valid experience of entering the market, and you recover at least some of your casts. And it’s not rocket science, but if you have a good product, and you encourage the people to taste it – even a tiny drop – they usually love it.
It seems to me that there are two ways of getting people to drink distilled spirits. One way is to make the drink agreeable to the palate, the eye, and the nose – Baileys and Malibu are good examples of this.
If you carry this process to its logical conclusion, you have the RTDs, or ready-to-drinks, which have had a great boom, and are now fading.
The other thing you can do is to persuade them that there is virtue in drinking them, in learning to appreciate them for their own intrinsic sake. That is the successful route adopted by the great blended whisky brands which were first created by nineteenth century geniuses like John & Alexander Walker, James Buchanan and James Logan (who never did any market research ), more recently by the single malts, by Cognac, Tequila, and by big American whiskey brands like Jack Daniels.
And in individual markets, great brands have more often been built by committed individuals, like Abe Rosenberg who single-handedly and with no help at all from the parent company, built J&B Rare to a 2.5 million case brand in the USA. There are dozens of examples - the lesson, I think, must be - choose your agent well – or let him choose you well – and then TRUST HIM.
MALTS. These are, I must confess, my favourite of all the alcoholic drinks, together with really good wine, plenty of cheap wine, and real ale. I admire the malts partly because of their enormous variety of nose and taste (cognac, no matter how fine, all tastes much the same – compared with the vast difference between a malt from Islay and one from the Spey). Much of their appeal, of course, lies in their relative rarity – the amateur can ‘discover’ them for himself, so he feels that he owns a part of the brand. It is interesting that when a malt gets as big (in volume sales) as for instance Glenfiddich or the Glenlivet, people stop thinking of it as a malt, rather as just another Scotch brand.
The scotch trade was slow to understand the possibilities of wood management. So successfully and sophisticatedly employed by the people of Cognac, where ninety percent of the volume is ready for market at 3 years and ten minutes!
A word on PRICING. Many keen salesmen will strive to beat the competition by cutting the price, and many incentive schemes encourage this, by basing bonuses on volumes rather than profits. I would say that discounting is an endemic disease in our industry – and a very pernicious one. Its power was such in the last days of the great Seagram empire Chivas Regal 12-year-old whisky was selling across the USA at the same price as Johnnie Walker Red Label.
I believe that many if not most people who buy any but the most basic spirits drinks judge them partly by their price. Very few, even enthusiastic connoisseurs, have the experience to judge a whisky by nose and palate relative to the hundreds of alternatives before them. So they look for one which is expensive enough to convince them that the merchant is offering a serious product. When they see it sold below its proper perceived value, they think, consciously or unconsciously, that something is wrong.
was at one time in charge of a very big advertising account, selling eggs – I was responsible for putting the lion on the egg. We got hold of a number of grocers – the old-fashioned type who had some of their goods spread out on the pavement outside their shop – and asked them to cooperate in an experiment. What they had to do was set out three displays of eggs side by side. All the eggs were the same; large first class. The price signs varied, however. The first tray said 2/6d a dozen, the second 3/6d, and the third 4/6d. The shopkeepers were told, if questioned, to tell the truth – that the eggs were all exactly the same, only the price was different. The 4/6d eggs always sold out first.
Let me tell you another true story from the distant past; I
Johnnie Walker Blue Label was created in 1987 to reassert the perceived value of the Johnnie Walker brand in Asia, where grey market discounting had damaged it; so much so that JW was not seen as a proper gift in Japan. We created a replica of the JW of 1887; put in the bottle a fine blend without any age claim, and sold it for £100. It outstripped its remedial role and today sells around 300,000 cases a year.
I would assert that in the distilled spirits market PRICE IS VALUE –and when you look at the world of fashion, or motor cars, or wristwatches, or handbags – it looks like a pretty universal truth. To sell your stuff cheap is the lazy man’s way out.
And a word of caution concerning those splendid fellows the production managers. Don’t let them ruin a great luxury brand by economy measures unrelated to the essential perceived value of the pack; I have seen a production man try to save less than a penny by spoiling the closure of Johnnie Walker Blue Label – this on a brand that sells for £100.
The feel, the weight, the texture of the embossed label – all these add perceived value; all are precious.
I haven’t talked about advertising, mainly because I don’t know much about modern advertising. Because of the devious motivation of the drinker, I think it is hard to penetrate his mind with advertising.
I believe that those campaigns which have worked best have been those that have maintained a consistent, simple message and style for very long periods. Examples are Absolut, and, best of all, Jack Daniels, which has been running exactly the same message, in the same layout, for more than forty years.
I suppose that if you are a big established brand, you are obliged to advertise, to maintain credibility. But a lot of the effect is on the trade rather than the consumer, I reckon.
And the classic pattern of marketing fast-moving consumer goods – launch with enormous up-front spend, then research consumer response and repurchase rate – just doesn’t work for distilled spirits; these are slow-moving consumer goods! And the repurchase rate for a bottle of spirits by the average consumer is about twice a year.
Going after the youth market is a tempting trap, perhaps a will-o-the-wisp – much pursued by the marketing managers of today’s bigger companies, who all seem to be mere children themselves, from where I stand. But most spirits are drinks for grown-ups – and perhaps it’s right that we should wait a year or two before we indulge ourselves in absolutely everything.
SO:
You can concentrate on the effective marketing of the classic spirits.
You can create new drinks with a wider, easier appeal, aimed at a wide demographic base – (theory of the demographic pyramid).
You can imitate a successful brand – not usually a route to riches, most wind up as failures (Tia Lusso) or heavily discounted to survive.
Or you can go into the commodity market; a fiercely competitive and very discouraging business. Perhaps such products dilute your overheads – I would suggest that you look closely at what those overheads are actually for.
Finally, to bring things up to date, a bit of information about what I am up to these days.
Since I stopped full-time work I have been doing a bit of consulting for among others, HINE, Krug (old LVMH mates) Whyte and Mackay , and in 2004 I became involved with a girl called Caroline Whitfield. She was at Christ Church at Oxford, my own college, exactly forty years after me. She had the great idea of building a new malt distillery on the Shetland Islands, having found on a visit that there had never been one – they obviously needed one. They are actually Norsemen, and traditionally drink gin and schnapps.
I was called in to lend a hand, and pointed out, as had Jim Swan and others, that a new malt distillery was cash-flow negative for the first five years or so, and therefore unlikely to appeal to most venture capitalists ( in fact no venture capitalist liked the idea anyway, and all money has come from private investors). So we discussed what to do while the still was being built and the whisky matured, and we came up with quite a pretty range of goods.
Some of the range making it into reality - JAGOs for instance!
