June 2009

COVER STORY: Ready for Summer

By: The Tasting Panel Editorial Team
Ready, Set, Serve! 

Diageo's instant cocktails are more than ready-for-summer

Retailers know that summer barbecue season waits for no recession, and moreconsumers are looking for simple ways to enjoy their casualget-togethers. But they also want to expand on the usual notion of abackyard party by serving more unexpected fare. Ready-to-serve cocktails eliminate the hassles of measuring and mixing ingredients;they just need to be chilled before serving. Plus, since they’reself-contained in one bottle, they have the portability factor of beerand wine.

To capitalize on this surging market force, globalspirits, beer and wine giant Diageo announced in April that it isinvesting over $20 million to expand its bottling facility in Plainfield, Illinois, to accommodate demand for its growing line ofready-to-serve cocktails.

Brand Loyalty Counts

Because consumers tend to gravitate towards familiar brands, evenfor unfamiliar products such as these innovative drinks, Diageo willcontinue to use its portfolio’s highly recognized brands to satisfydemand for easy to serve bar-quality cocktails for the home>

In 2005, for example, Diageo introduced Jose Cuervo Golden Margarita, oneof the first premium ready-to-serve products on the market. Made from Jose Cuervo Gold tequila, Grand Marnier cognac-orange liqueur and limejuice, this 25-proof cocktail instantly enjoyed tremendous success andhelped propel the category’s strong growth. In June, the company willcontinue expanding the lineup with the launch of Jose Cuervo Authentic Mango Margarita.

Growing the Category

Diageo’s other super-premium brands are also growing theready-to-serve category by introducing more unique products that arebacked by consumers’ confidence in and loyalty to the respectivebrands. Smirnoff, the world’s number-one-selling vodka, lends itsconsiderable popularity to a number of ready-made drinks, including theSmirnoff Vodka Mojito, Smirnoff Pomegranate Martini and Smirnoff TuscanLemonade. Each of these pre-mixed blends begins with Smirnoff No. 21vodka (or “Smirnoff red,” as it’s popularly known), then addshigh-quality ingredients for the final recipes: citrus flavors and mintfor the Mojito; pomegranate juice, Meyer lemon liqueur and naturallemon for the Pomegranate Martini; Grand Marnier, cranberry juice andlime for the Grand Cosmopolitan; and Limoncello liqueur with lemon andcitrus for the Tuscan Lemonade.

Another Diageo portfoliopowerhouse, Captain Morgan, has also begun to navigate theready-to-serve seas with its own unique drinks. Captain Morgan LongIsland Iced Tea recreates a notoriously difficult-to-prepare cocktail,allowing backyard bartenders to serve this refreshing drink with theconfidence of a master mixologist. The proprietary blend includesCaptain Morgan Original Spiced Rum, tequila, gin, vodka and triple sec.

Exotic and Beyond

Captain Morgan’s Parrot Bay imprint takes the category in anexotic direction while also enhancing an already wildly popular drink,the Mojito. Parrot Bay’s Tropical Mojito lineup begins with one of itsspecialty rums before adding premium flavors like lime and naturalmint. There’s also triple sec included in the Citrus Mojito, andcuraçao in the Mango Mojito.

Capitalizing on the success ofJeremiah Weed Bourbon Liqueur, Diageo is releasing the brand’s nextproduct, Jeremiah Weed Sweet Tea Vodka. This 70-proof vodka with brewedsweet-tea flavors adds a touch of Southern style to summer soirees.Jeremiah Weed is in the process of launching more ready-to-serve sweettea flavors in the next few months, and epitomizes the creativity inliquid development that Diageo strives for.

Retailers and theircustomers can expect more products across the category as Diageocontinues to tap its impressive portfolio of globally-recognized brandsfor delicious innovations.

"These days, people are entertaining at home, and Diageo's line of premium ready-to-serve cocktails provide a bar-quality drink every time. Diageo recognized the opportunity in premium ready-to-serve cocktails back in2005, when we launched Cuervo Golden Margaritas. Since then, our portfolio has grown to include Smirnoff Grand Cosmopolitan, Smirnoff Mojito, Smirnoff Pomegranate Martini and now, Smirnoff Tuscan Lemonade and Captain Morgan Long Island Iced Tea. Premium ready-to-serve cocktails are a high-growth segment because they answer a consumer desire for easy-to-enjoy, quality cocktails at home. Retailers canmaximize this growth and profit opportunity by merchandising these premium cocktails in key purchase areas to encourage incrementality." —Michael Ward, Senior Vice President of Innovation at Diageo


Party Central at Dale’s Jr. Market

Brandon Hannoun never liked school. He’ll tell you that as a“social person” he was more attracted to working in one of his father’swine and spirits stores than sitting in a classroom. “I admit it,” he smiles broadly, a shine in his eye. “I love the perks of thisbusiness: parties, tastings, movie previews, great seats at sportingevents.  But I also really truly enjoy dealing with our customers."

As we stand in front of the counter at Dale’s Jr., one of the fiveHannoun-owned markets in Southern California, it’s a warm andcharismatic Hannoun who greets patrons and sells them on the brands heknows and respects. Located just minutes from the Pacific Ocean,Dale’s Jr. is a must-stop for ready-to-serve cocktails for beach-goers,picnickers or pool-party planners. It’s no wonder the display foreverything from Captain Morgan Long Island Iced Tea to Smirnoff TuscanLemonade to Cuervo Golden Margarita is front-and-center—directly infront of the cash register.

I just have to say something, for therecord,” Hannoun announces, making sure THE TASTING PANEL puts this onpaper. “I love working with Diageo—and especially Anthony Sapien fromPacific Wine & Spirits. He brings in the products that sell, showsme the best way to promote the brands and, in the long-run, weexperience a success together. That’s good business all the wayaround.” —Meridith May

Variety at Vendome Wine & Spirits

“When my customers come in asking for something bar-quality buteasy to use, I steer them in the direction of these ready-to-servecocktails,” Keith Tran points out the two over-sized Diageo displays.

Tran,whose family owns and operates six popular Vendome Wine & Spiritslocations throughout Southern California, has himself been in thebusiness for over two decades. His father, John Tran, is constantlyseeking upscale locations to introduce specialty brands to a high-endclientele.

“The products have to be right for our customers,” insists Tran, who believes in the two “h” words: hip and hype.

“Our customers have disposable income but they also trust Vendome for better quality. The economy has affected everyone, but that doesn’t mean thatour clientele doesn’t have the money to spend—they just spend it right."

And for Tran, the word right equates to products that make sense.

“Ifyou’re throwing a big party and want to have plenty of cocktails onhand for the crowd, you may not want to shell out $25 or more forbottles of vodka, or rum or tequila. Then, you have to come up with themixers, the valuable time and the endless creativity to impress yourfriends or business associates."

“That’s why I think Diageo’sgame plan is brilliant: ready-to-drink cocktails with some of the bestnames in the world behind them. Who does flavor better than Smirnoff?Who does Margaritas better than Cuervo? And everyone knows theCaptain’s rum equates to delicious drinks.” —M.M.

BBQ HQ at Emilio’s Beverage Warehouse

Backyard bartenders looking to stock up for that summer BBQ or pool party headto Emilio’s Beverage Warehouse in Bellflower, California; specializingin bulk orders, Emilio’s features a large variety of Diageo’s newready-to-serve cocktail products.

Conveniently located front andcenter, near Diageo’s innovative Virtual Bartender and Party Planner,is a large display of the new Smirnoff, Jose Cuervo and Captain Morgan ready-to-serve cocktails. Owner Tony DiCorpo tells THE TASTING PANEL that “the Captain Morgan Long Island Ice Tea has been flying off theshelves, and the Jose Cuervo Golden Margarita has always been highly successful in our store.”
DiCorpo makes a concerted effort to stayin touch with what his customers are drinking. As he explains,“Traditionally, the ready-to- serve products have done very well in the summer months; they are easy to prepare and relatively inexpensive."

With the introduction of Diageo’s new line of ready-to-serve products, Tonyhas seen this category become a larger part of his total liquor sales.

DiCorpo is pleased to have such a strong relationship with Diageo and points toboth their product innovation and support. “I’m really able to workwith our Diageo reps to bring the right products into the store at theright prices. It is a total team effort.” —Zack Dickson

Surf’s Up at Liquor Warehouse

The summer surf is up at Liquor Warehouse in Huntington Beach where thelocal customers are catching the wave of Diageo’s new Smirnoff, Captain Morgan and Jose Cuervo ready-to-serve products. Located only a short distance from the Huntington Pier’s sun-soaked beaches and in businessfor over 15 years, Liquor Warehouse has a loyal clientele of summer beachgoers and barbecue aficionados.

After only a few minutes inthe store it’s apparent that owner Jerry Tsukamoto goes out of his wayto get to know his customers. On a first-name basis with much of his clientele, Jerry understands that his customers demand great-tasting products at low prices. As he explains, “All of Diageo’s newready-to-serve products have high-quality ingredients and taste great,so I am confident recommending them to my customers."

Recently, Jerry has noticed that more of his customers are buying with the lowerprices and sales discounts. As he explains, “The affordability andquality of the Jose Cuervo, Smirnoff and Captain Morgan ready-to-serve products is much of the reason behind their success at LiquorWarehouse. With these innovative products, all you need to do is add ice and you have a perfect cocktail.” —Z.D.

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