Skyy Vodka Shoots for the Hip
How do you get a bland-tasting product with a reputation for helping Russians make it through a bleak winter to appeal to the trendiest twentysomethings in America? Put it in a blue bottle.
Skyy vodka has become a top seller by getting its distinctive blue bottle into swanky Hollywood parties and nightclubs known for attracting a hip crowd.
And this summer, Skyy is making the rounds at film festivals, where it will show artsy shorts that double as vodka ads--a cinematic pitch for youthful taste makers.
Founded in 1992 by a 60-plus San Franciscan who modeled the brand’s name on Exxon, Skyy Spirits Inc. is succeeding at a time when overall vodka sales are flat. The only competing brands showing any growth are imports.
But Skyy’s rivals are catching on. Absolut, a Swedish vodka imported by Seagram Co. and the second-best-selling vodka next to Smirnoff, also plans to hit the festival circuit with its own film shorts.
Maurice Kanbar says he started Skyy as a premium brand for older connoisseurs, like himself, desirous of the perfect martini. He named the brand after gazing from his window and viewing a brilliant blue sky. After a search, he found the cobalt blue bottle he wanted in Germany.
Kanbar says professional managers he hired to run his company convinced him to target drinkers under 34, an age group that consumes nearly one-third of the vodka sold.
“At some point, you have to let go and let other people handle it,” he says.
Skyy quickly generated a buzz on the nightclub circuit, where rumors spread that its quadruple-distilled formula reduced the likelihood of hangovers. Skyy sponsored martini nights at bars and placed a series of cinema-themed ads in magazines such as Details, Spin and Vogue.
Skyy’s sales in 1998 surged 21% to 700,000 cases, or $55 million, from the previous year. Analysts say it is poised to break into the top 10 domestic vodka brands. But it still lags far behind such lower-end domestic brands as Popov and Gordon’s and such upscale imports as Stolichnaya.
“Today’s consumers are really thinking at warp speed,” says Skyy Chief Executive Anthony Foglio, former president of liquor conglomerate IDV North America. “Cinema and film are the wave of the future. It forces you to stay on top of things.”
Skyy’s ad budget has grown to $5 million from $50,000 in 1992, which was spent mostly on brochures and local film sponsorships. Today Skyy devotes most of its ad budget to vivid pitches in youth-oriented alternative publications such as Detour, Soma and Wallpaper. Its current campaign features an ad called “She Wins” and features a woman in a black slip eating olives over the blindfolded, passed-out body of a young man. Skyy also sponsors events for clubs and movie premiers.
At a recent premier party for “Go,” a film about fast-living 20-year-olds, at the Pool on Sunset Boulevard, Skyy set up complementary cocktail bars on each level of the club, each flanked by giant versions of its blue bottle.
Techno music blared as Hollywood’s A-list of young actors and entertainment industry types chatted about the movie and tinkered with the toys and lollipops scattered across the club’s tables.
On a balcony overlooking the dance floor, a young waiter in a bright orange T-shirt and ski cap enticed gel-coiffed guests with trays of watermelon and apple-pie shots made with Skyy and flavored liqueur.
Skyy’s new festival shorts are directed by such up-and-comers as Lisa Cholodenko (“High Art”) and David Veloz (“Permanent Midnight”) and center on youthful angst and the Skyy bottles. In the final scene of the Veloz film, for example, a bartender pours Skyy shooters for an overeager young Casanova and the woman who has caught his interest.
Activists are concerned that films with appeal to 21-year-olds may also attract underage drinkers. “It’s very clear to me that the liquor industry is starting to be more aggressive about targeting twentysomething drinkers, and by implication that often includes younger people as well,” says George Hacker, director of alcohol policies projects with the Center for Science in the Public Interest in Washington.
Skyy officials say they’re not trying to target anyone under legal drinking age.
In 2000, the San Francisco-based company expects sales volume to jump 14% to 800,000 cases as it begins to distribute its brand in Europe, Asia and Latin America through a licensing agreement with family-owned Campari International, a liqueur maker based in Milan, Italy. Skyy is the U.S. distributor for Campari, which acquired a minority stake in Skyy in January.
But, analysts say, duplicating its U.S. success won’t be as easy, given the predisposition to certain types of spirits in other countries.
“They’re going into markets where vodka is just not as popular,” says David L. Ross, managing editor of Marketwatch, a trade magazine for the beer, wine and spirits industry. “It’s brandy in Mexico, rum in the Caribbean and France has its wine.”
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A Clear Contender
The continued popularity of classic cocktails sis little to boost vodka sales in 1997, the last year for which data are available. Vodka consumption has been declining since the early 1980s. However, sales of Skyy Vodka have surged in the last few years, at a rate that outpaces its biggest competitors, Smirnoff and Absolut.
Despite its share ...
Vodka sales as a percentage of total sales of distilled spirits in the United States:
Vodka: 25%
Other distilled spirits: 75%
...vodka sales are lower ...
in millions of nine-liter cases:
1997: 34.6 million cases
...yet Skyy has grown.
Percent change in sales from 1996 to 1997:
Smirnoff: -2.4%
Absolut: 5.9%
Skyy’: 17%
