US Drinks Conference 2010

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Allocating Marketing Budgets

U.S. Drinks Conference 2010

• Product:• Good Tasting Product• Unique, Attractive Package• Product Point Of Differentiation

• Path:• Organization (Your Own or Importer/Supplier) to Manage Business• Distributors Who Stock and Distribute Product• Retailers (On & Off-Premise) Who Introduce Your Product to Your

Target Consumers

• Promotion:• Sales and Education Materials• In-Store/Bar Merchandising – POS Support• Advertising/Public Relations/Programs

• Price:• Must Fit Positioning

What Brands Need to Bring to Market

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U.S. Drinks Conference 2010

Should do…

Could do…

Allocating Budgets - A Question of:

Must do…

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U.S. Drinks Conference 2010

You Must

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U.S. Drinks Conference 2010

You Must

• Get the Product into a distributor. Who is looking for:– What are you going to do to move it out of our

house so I can make money• Get Retailers. Who are looking for:

– What are you going to do to move it out of our bar/store so I can make money

• Get Consumers. Who are looking for:– A product (like yours) that fits my needs

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U.S. Drinks Conference 2010

You Must

• Sell Your Product and Educate Trade and Consumers on Why Your Brand– Provide sales tools to your sales teams

(internal and external)• Sales literature, sampling kits, fact cards, etc

– Education material – – What is this product? Why should I sell/consume it?

» Product description, tasting notes, pairings, point of differences, etc

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U.S. Drinks Conference 2010

You Must

• Create Consumer Demand at Point of Purchase and Outside POP

• At POP– Off-Premise – bottle necker, shelf talkers, display

materials…– On-Premise – fact cards, table tents, unique point of sale

that brings your– Both - Sampling, promotion, events..

• Outside: bring your brand to life…– Advertising– Public Relations– Social Media– Your budget will dictate which way you go

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U.S. Drinks Conference 2010

You Should

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U.S. Drinks Conference 2010 9

You Should

• Market your brand to the Trade:– Retailers– Bar Owners– Bartenders– Staff– Etc

• Why you may ask?

U.S. Drinks Conference 2010

FUNNEL

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U.S. Drinks Conference 2010

FUNNEL

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U.S. Drinks Conference 2010

How To Market To The Trade

• The Top Way Trade Gets Information is:– Trade Publications Editorial– Distributors– Suppliers– Trade Publication Advertising– On-Line– E-Newsletters

• Working with Trade Publications is effective:– Trade PR is effective and lower cost– On-Line growing and where they say they want to get info– Trade Advertising effective in getting your exact message

to the trade

Reversed for Off vs. On

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U.S. Drinks Conference 2010

You Should

• Promote your brand to your target consumer• Social Media Marketing

• Blogs specifically set up for Beer, Wine, or Spirits that can reach large numbers of Passionate beverage alcohol consumers

• Sites & Forums that reach large sums of consumers who are interested in Beer, Wine, Spirits

• FaceBook – Best place, least expensive way to engage your consumers

• Other

• Media Outreach – traditional & on-line• Targeted to your audience as much as possible• Also key in on lifestyles that match your target consumers

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Shifting Marketing $$ to Online/SMM

Adding

Reducing

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Marketing Sherpa 2009

U.S. Drinks Conference 2010

You Could

U.S. Drinks Conference 2010

You Could

• Advertise:• On-Line allows you to target consumers and lower cost• Traditional more expensive and less targeted

• Events • Facilitates sampling

• Tie in with Celebrities• At events• Though Sponsorships

• Conduct Partnership programs• Tie-in with complimentary products, programs, etc

• Value Added packs

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U.S. Drinks Conference 2010

Reference Media Spend: Spirits

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Measured Media Spend 2009: Spirits ($000's)Mag. Newsp. Outdoor B'cast Total

VodkaAbsolut $12,342 $315 $1,103 $4,073 $17,833

Grey Goose $10,211 $358 $0 $3,605 $14,174Svedka $7,609 $189 $1,663 $0 $9,461Ultimat $3,314 $0 $490 $21 $3,825

Tito's $2,406 $152 $0 $20 $2,578Georgi vodka $0 $0 $148 $0 $148

WhiskiesJack Daniel's $4,004 $35 $1,235 $9,186 $14,460

Jameson $3,283 $5 $198 $6,235 $9,721The Glenlivet $3,913 $864 $0 $49 $4,826

Red Stag by Jim Beam $316 $0 $0 $1,148 $1,464Rum

Captain Morgan $187 $16 $600 $18,795 $19,598Gosling $1,221 $0 $0 $0 $1,221

Sailor Jerry $0 $0 $225 $198 $423Gin

New Amsterdam $2,196 $0 $0 $175 $2,371Bombay Sapphire $1,958 $0 $0 $203 $2,161

Bulldog $44 $0 $0 $0 $44

The B.I.G. 2010 Liquor Handbook

U.S. Drinks Conference 2010

Measured Media Spend 2009: Spirits ($000's)Mag. Newsp. Outdoor B'cast Total

VodkaAbsolut $12,342 $315 $1,103 $4,073 $17,833

Grey Goose $10,211 $358 $0 $3,605 $14,174Svedka $7,609 $189 $1,663 $0 $9,461Ultimat $3,314 $0 $490 $21 $3,825

Tito's $2,406 $152 $0 $20 $2,578Georgi vodka $0 $0 $148 $0 $148

WhiskiesJack Daniel's $4,004 $35 $1,235 $9,186 $14,460

Jameson $3,283 $5 $198 $6,235 $9,721The Glenlivet $3,913 $864 $0 $49 $4,826

Red Stag by Jim Beam $316 $0 $0 $1,148 $1,464Rum

Captain Morgan $187 $16 $600 $18,795 $19,598Gosling $1,221 $0 $0 $0 $1,221

Sailor Jerry $0 $0 $225 $198 $423Gin

New Amsterdam $2,196 $0 $0 $175 $2,371Bombay Sapphire $1,958 $0 $0 $203 $2,161

Bulldog $44 $0 $0 $0 $44

Reference Media Spend: Spirits

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The B.I.G. 2010 Liquor Handbook

U.S. Drinks Conference 2010

Reference Media Spend: Beer

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Measured Media Spend 2009: Beer ($ 000's)

Print Broadcast Total

Corona Extra $9,556 $35,083 $44,639

Heineken $10,262 $28,741 $39,003

Dos Equis $204 $22,040 $22,244

Stella Artois $10,940 $6,065 $17,005

Sam Adams Boston Lager $86 $16,328 $16,414

Guinness $330 $7,334 $7,664

Beck's $997 $2,539 $3,536

St Pauli Girl $725 $0 $725

Grolsch $0 $0 $0

The B.I.G. 2010 Beer Handbook

U.S. Drinks Conference 2010

Measured Media Spend 2009: Beer ($ 000's)

Print Broadcast TotalCorona Extra $9,556 $35,083 $44,639Heineken $10,262 $28,741 $39,003Dos Equis $204 $22,040 $22,244Stella Artois $10,940 $6,065 $17,005Sam Adams Boston Lager $86 $16,328 $16,414Guinness $330 $7,334 $7,664Beck's $997 $2,539 $3,536St Pauli Girl $725 $0 $725Grolsch $0 $0 $0

Reference Media Spend: Beer

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The B.I.G. 2010 Beer Handbook

U.S. Drinks Conference 2010

Pro Forma Budget Allocation

Just a starting point

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U.S. Drinks Conference 2010

Pro Forma Budget Allocation: Spirit

$000's % $000's % $000's %Advertising

Creative $10 1% $125 3% $375 4%Production $5 1% $100 2% $400 4%

Offline Media $75 8% $1,000 20% $3,000 30%Online Media (Display and Paid

Search) $105 11% $1,300 26% $2,500 25%Subtotal advertising $195 20% $2,525 51% $6,275 63%

Consumer Merchandising and Promotions (Flow/ POS, Promotions, Merchandising) $110 11% $725 15% $1,000 10%Support of Field Mktg/Sales/Distr. (Brand Ambassadors, Menu pgms, bar parties, tastings, incentives, sales literature) $260 26% $700 14% $1,700 17%Traditional Public Relations and Events $100 10% $400 8% $500 5%Trade Marketing $125 13% $300 6% $400 4%Website $60 6% $100 2% $125 1%Interactive/Social Media Marketing $150 15% $250 5% $400 4%TOTAL $1,000 100% $5,000 100% $10,000 100%

$5 MM Budget $10MM Budget$1 MM Budget

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BAT Analysis

U.S. Drinks Conference 2010

Pro Forma Budget Allocation: Spirit

$000's % $000's % $000's %Advertising

Creative $10 1% $125 3% $375 4%Production $5 1% $100 2% $400 4%

Offline Media $75 8% $1,000 20% $3,000 30%Online Media (Display and Paid

Search) $105 11% $1,300 26% $2,500 25%Subtotal advertising $195 20% $2,525 51% $6,275 63%

Consumer Merchandising and Promotions (Flow/ POS, Promotions, Merchandising) $110 11% $725 15% $1,000 10%Support of Field Mktg/Sales/Distr. (Brand Ambassadors, Menu pgms, bar parties, tastings, incentives, sales literature) $260 26% $700 14% $1,700 17%Traditional Public Relations and Events $100 10% $400 8% $500 5%Trade Marketing $125 13% $300 6% $400 4%Website $60 6% $100 2% $125 1%Interactive/Social Media Marketing $150 15% $250 5% $400 4%TOTAL $1,000 100% $5,000 100% $10,000 100%

$5 MM Budget $10MM Budget$1 MM Budget

Stimulate measurable actions by people who

“raise their hand”

PrioritiesPut Your Money On the

Street

Get the Trade Involved

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BAT Analysis

U.S. Drinks Conference 2010

Pro Forma Budget Allocation: Wine

$000's % $000's % $000's %Advertising

Creative $0 0% $3 2% $10 2%Production $0 0% $2 1% $20 3%

Offline Media $0 0% $0 0% $60 10%Online Media (Paid Search) $0 0% $15 8% $130 22%

Subtotal advertising $0 0% $20 10% $220 37%

Consumer Merchandising and Promotions (Flow/Prom. Pgms/POS) $5 5% $10 5% $40 7%Support of Field Mktg/Sales/Distr. (Menu pgms, bar parties, tastings, incentives) $10 10% $20 10% $40 7%Public Relations/Events $15 15% $40 20% $60 10%Trade Marketing $15 15% $25 13% $40 7%Website $10 10% $15 8% $30 5%Interactive, Social Media Marketing, Ecommerce support $45 45% $70 35% $170 28%TOTAL $100 100% $200 100% $600 100%

$200,000 Budget

$600,000 Budget

$100,000 Budget

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BAT Analysis

U.S. Drinks Conference 2010

Pro Forma Budget Allocation: Wine

$000's % $000's % $000's %Advertising

Creative $0 0% $3 2% $10 2%Production $0 0% $2 1% $20 3%

Offline Media $0 0% $0 0% $60 10%Online Media (Paid Search) $0 0% $15 8% $130 22%

Subtotal advertising $0 0% $20 10% $220 37%

Consumer Merchandising and Promotions (Flow/Prom. Pgms/POS) $5 5% $10 5% $40 7%Support of Field Mktg/Sales/Distr. (Menu pgms, bar parties, tastings, incentives) $10 10% $20 10% $40 7%Public Relations/Events $15 15% $40 20% $60 10%Trade Marketing $15 15% $25 13% $40 7%Website $10 10% $15 8% $30 5%Interactive, Social Media Marketing, Ecommerce support $45 45% $70 35% $170 28%TOTAL $100 100% $200 100% $600 100%

$200,000 Budget

$600,000 Budget

$100,000 Budget

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Get the Trade

Involved

Put Your Money On the Street

Stimulate measurable actions by

people who “raise their

hand”BAT Analysis

U.S. Drinks Conference 2010

Pro Forma Budget Allocation: Beer

$000's % $000's % $000's %Advertising

Creative $0 0% $15 2% $30 1%Production $0 0% $0 0% $20 1%

Offline Media $0 0% $0 0% $800 32%Online Media $25 6% $175 18% $450 18%

Subtotal advertising $25 6% $190 19% $1,300 52%

Consumer Merchandising and Promotions (Flow/Prom. Pgms/POS) $100 25% $120 12% $250 10%Support of Field Mktg/Sales/Distr. (Menu pgms, bar parties, tastings, incentives) $100 25% $225 23% $250 10%Public Relations/Events $25 6% $200 20% $290 12%Trade Marketing $75 19% $100 10% $150 6%Website $30 7% $65 7% $60 2%Interactive and Social Media Marketing $50 12% $100 10% $200 8%TOTAL $405 100% $1,000 100% $2,500 100%

$500,000 Budget

$1,000,000 Budget

$2.500,000 Budget

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BAT Analysis

U.S. Drinks Conference 2010

Pro Forma Budget Allocation: Beer

$000's % $000's % $000's %Advertising

Creative $0 0% $15 2% $30 1%Production $0 0% $0 0% $20 1%

Offline Media $0 0% $0 0% $800 32%Online Media $25 6% $175 18% $450 18%

Subtotal advertising $25 6% $190 19% $1,300 52%

Consumer Merchandising and Promotions (Flow/Prom. Pgms/POS) $100 25% $120 12% $250 10%Support of Field Mktg/Sales/Distr. (Menu pgms, bar parties, tastings, incentives) $100 25% $225 23% $250 10%Public Relations/Events $25 6% $200 20% $290 12%Trade Marketing $75 19% $100 10% $150 6%Website $30 7% $65 7% $60 2%Interactive and Social Media Marketing $50 12% $100 10% $200 8%TOTAL $405 100% $1,000 100% $2,500 100%

$500,000 Budget

$1,000,000 Budget

$2.500,000 Budget

Put Your Money On the Street

Get the Trade Involved

Stimulate measurable actions by people who

“raise their hand”

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U.S. Drinks Conference 2010

Conclusions

• You need to think about:– What are your short and long-term goals– What type of product are you launching:

• Value brand vs. premium brand

– How much money can you invest– Do you need to be national? – You can go

regional or in a state or two• You have to determine what you must,

should and could do

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U.S. Drinks Conference 2010

Thank You!

Jeff Grindrod, Managing Partner

1 Darling Dr.

Avon, CT 06001

USA

860-676-7900

JeffGrindrod@comcast.net