Catching the Spirits : Generation X Marks the Spot for the Liquor Industry
Marketers of hard liquor are chasing after Generation X. Hoping to reverse two decades of steep sales decline, the liquor industry is trying to woo young adults with lighter tasting spirits and a trendier image.
Distilled spirits marketers are throwing liquor-tasting parties in bars and are sponsoring rock concerts and sporting events in an effort to bring into the ‘90s drinks synonymous with boring business lunches of 20 years ago. The industry’s strategy is being put to the test during the winter holidays, the most important selling season for hard liquor.
Besides offering the usual holiday gift packs, spirits companies are making an effort to reach young adults on their turf. Stolichnaya vodka will deliver electronic holiday greeting cards that visitors create on its Internet site. Sauza tequila is running an online contest for an invitation to a festive party at the Playboy Mansion in Holmby Hills.
But as the liquor industry cultivates a hip, more accessible image, consumer advocates worry that hard liquor will become attractive to people under 21. Though underage drinking has declined in recent years, some experts see anecdotal evidence that spirits consumption is on the rise.
“It may not be purposeful, but the bands and events they sponsor are definitely appealing to kids under 21,” said Makani Themba, associate director of the Marin Institute, a research organization. “It is an aggressive attempt to place distilled spirits in youth culture.”
On the UCLA campus last week, a group of friends sharing a late-afternoon snack of cookies and ice tea said they often have mixed drinks when partying at local nightclubs with friends.
“Beer is kind of played out,” said Ghaza Mahindoost, 19. “People drank it in the 1980s, but it kind of got old.” Nowadays, she said, “Tequila rules.”
Her friend, Frank Laaly, 19, grinned, revealing braces. His drink is vodka, though he sometimes chases beer with tequila shots. “If you’re going to drink,” he said, “you might as well drink.”
Representatives of liquor companies are sensitive to criticism that their promotions entice underage drinkers. Last summer, Jim Beam Co. shut down its virtual bar amid criticism that it allowed underage Net surfers to receive recipes, listen to bartender banter and scribble graffiti on the wall.
Skyy Spirits won’t use bar parties to promote its vodka, an unusual policy. “We feel like it’s another excuse: If you want to get drunk, drink our product,” said marketing director Marsha Nog.
Hard liquor no doubt is getting a boost from its increasing presence in pop culture. Rap artist Snoop Doggy Dog mentions Tanqueray, a popular brand among young adults, in his song, “Gin & Juice.” On a recent “Late Night” program, host David Letterman poured singer Tony Bennett a drink from a Stolichnaya bottle. (Bennett spit it out). The new James Bond movie, “Goldeneye,” is drawing attention to the secret agent’s preferred drink--a vodka martini, shaken not stirred.
Hiram Walker & Sons is forging its own cultural link for its Kahlua Royal Cream, having acquired from Spelling Entertainment Co. the right to throw “Melrose Place” bar promotions. Held at 4,000 bars nationwide, the parties feature life-size cutouts of “Melrose Place” stars and banners that sigh, “Steamy, Creamy, Dreamy,” playing up the sex appeal of the show.
“It is a very hip show and the demographics are a perfect match for whom we want to target,” women between 21 and 29, said Mike Seguin, group product manager for Kahlua. The parties allow Hiram Walker to reach dedicated TV viewers despite a voluntary ban on advertising hard liquor on television.
“We’re not on TV, we’re tied in to it,” Seguin said.
The distilled spirits industry badly needs to attract young adults, having failed to convert much of the baby boom generation from beer and wine to hard liquor. Consumption of spirits has fallen by 40% from its peak in 1979, when the average adult drank three gallons of hard liquor a year. The only category showing significant growth nowadays is tequila, mainly fueled by the popularity of Mexican food.
“Relatively few people under 50 drink spirits,” said Paul Gillette, publisher of the California Beverage Hotline, an industry newsletter. Liquor marketers, he said, “are losing their customers through attrition.”
Although various surveys show that more than 40% of young adults who drink consume hard liquor from time to time, it’s not their preferred drink. According to a 1994 Gallup opinion poll, 10% of people between 18 to 29 said they preferred liquor, while 69% said they would rather have beer. To appeal to young adults, liquor marketers are portraying their brands as part of the Gen X experience. In advertising for its Dewar’s brand, Schieffelin & Somerset Co. links a taste for Scotch with the passage into adulthood: “You thought girls were yucky once too.”
A print ad for Schieffelin & Somerset’s Johnny Walker Black Label Scotch depicting a young man in graduation robes addresses with a wink the journey ahead: “There’s more to explore in black.”
Domecq Importers’ slogan for Sauza tequila plays on the stereotypical perception of survival in the ‘90s: “Life is harsh. Your tequila shouldn’t be.”
Marketers use event sponsorships to enhance their image and show how they fit into the Gen X lifestyle. Carillon Importers’ Stolichnaya has backed skiing and snowboarding competitions. Dewar’s hosts monthly acid jazz concerts in New York. Schieffelin & Somerset’s Tanqueray has sponsored an AIDS bike-a-thon in Los Angeles and other cities.
Tanqueray “got enormous emotional mileage” from the summer AIDS event, which generated a buzz in bars, said brand manager Deborah Callahan. “Whether it translates into sales mileage, we don’t yet know. Attitudes come first and volume comes second.”
Given the generally harsh taste of distilled spirits, though, image isn’t everything. To deal with taste, marketers are bringing out fruit-flavored spirits and developing lighter-tasting mixed drinks.
For example, Jos. E. Seagram & Sons is marketing Absolut vodka in citrus and currant flavors, and has had success with its Captain Morgan’s spiced rum. Dewar’s, at bar parties, works up such concoctions as Scotch Margaritas and cranberry sours using Tanqueray gin.
Jagermeister, a German cordial, is kept at subfreezing temperatures to make its cough syrupy taste more palatable. At bar parties, such as one held at Santa Monica’s Yankee Doodles last week, icy shots are served in test tubes while Jagerettes, lithe women in black body suits, dole out rub-on tattoos, Jagermeister caps and spinning dial games with two choices: I buy, you buy.
After rubbing a tattoo on her midriff, 28-year-old Jan Hurley downed a free shot of Jagermeister--and gasped. “It’s gross,” she said. “But it gives you a buzz. That’s what counts.”
Hurley usually drinks “vodka and orange juice, vodka and Kahlua--vodka anything.” But on this night, she and friend Rejan Halderman, 30, were drinking less expensive Rolling Rock beer because they were short on cash--as are many young adults launching careers.
Liquor marketers say they are catering to tight budgets by bringing out single-serve portions. In many regions of the country, for example, Hiram Walker sells a four-pack of Kahlua for around the price of a six-pack of premium beer.
As the holidays approach, distilled spirits firms will find out whether the heavily courted Gen X responds by spending on liquor for celebrations with family and friends. Some industry executives are optimistic, believing that fears about drinking and driving will cause young adults to stock up and celebrate at home. But others, such as Jaime Prusak, product manager for Dewar’s, aren’t so sure Gen Xers will be ringing in the New Year with, say, Scotch sours.
Although more young adults identify Scotch as a drink for them instead of for their grandfathers, she said, that shift in image hasn’t yet reversed Dewar’s declining sales. “We’d love nothing better than to turn it around,” Prusak said, “but we can’t turn 15 years around overnight.”
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Tossing One Back
The liquor industry is looking to Generation X to reverse a long decline in consumption of distilled spirits. Annual per capita consumption, in gallons:
1994: 1.84
WHO’S DRINKING HARD LIQUOR
A large percentage of people who drink distilled spirits is under 35:
21-24: 8%
25-34: 23.3%
35-44: 22.8%
45-54: 16.4%
55-64: 16.4%
65 and over: 17.6%
* Sources: Distilled Spirits Council o the United States, Jobson’s Liquor Handbook 1995
* Researched by DENISE GELLENE and JENNIFER OLDHAM / Los Angeles Times
