How spirits industry takes advantage of changing tastes
Soft drinks, water, and milk. That's the kind of company alcoholic-beverage makers would like to see their products keeping. And they are taking steps to put alcoholic drinks in this everyday beverage category.
Distilled liquor is now advertised side by side with juices and soda pop. Winemakers are coming out with ''light'' wines - lower in alcohol content and calories. And in general, audiences - including women - are being attracted more effectively: Packaging is becoming more convenient, products are being adapted to consumer tastes, and the channels of distribution are broadening.
The competitive drive to attract women and younger customers raises concern about the social consequences of greater alcohol consumption. Nicholas Johnson, a former federal trade commissioner, states: ''The alcohol industry's marketing constitutes an ethical and legal outrage precisely because of the nature and consequences of the drug it is marketing. To make light of those consequences is as cruel as it is deceptive.''
During the 1970s, per capita liquor consumption rose 9.3 percent, beer consumption 31 percent, and wine use 65 percent, according to the United States Brewers Association. Spending on alcoholic-beverage advertisements tripled over the same span.
In the prologue to ''The Booze Merchants,'' a recent study of marketing practices of the alcoholic-beverage industry by the Center for Science in the Public Interest (CSPI), Mr. Johnson asks: ''How is the 'public interest' affirmatively served by the advertising of alcohol? How are we better off because of it? What national need is there to increase the sale of these products?'' The CSPI is a Washington-based consumer interest group also doing nutrition and health research.
The more expensive and sophisticated marketing tactics stem from increased competition within the beer and wine industries. Two companies, in particular, have prompted this change.
Phillip Morris Inc. (Marlboros and Virginia Slims) and Coca-Cola Company have used their money and marketing know-how to take sizable bites out of the beer and wine markets. Miller Brewing Company, in seventh place when bought by Phillip Morris in 1970, is now firmly entrenched in the No. 2 beer-sales slot. The Wine Spectrum - created in 1977, when Coca-Cola swallowed Taylor, Great Western, Monterey, and Sterling vineyards - now holds third place in wine sales. (Second-ranked Heublein Wines may sell part of its holdings in August. If the deal goes through, the Wine Spectrum will move into the No. 2 spot.)
In the early '70s, Miller marketing techniques made a big splash in the beer industry. Now, the Wine Spectrum, under Coca-Cola's tutelage, is playing a similar wave-making role in the wine industry, analysts say.
''We take credit for single-handedly changing the (wine) industry from product-driven marketing to consumer-driven marketing,'' says Rick Theis, director of public relations. ''Before the Wine Spectrum, vintners grew grapes and then figured out how to sell them. We looked at consumers and tried to find out what they liked and gave it to them.''
What Wine Spectrum gave the public two years ago was a ''light'' wine. It wasn't the first low-calorie wine, but officials say it was the first to be ''produced and marketed as such.'' Calories are cut in light wines by reducing alcoholic content to about 8 percent, compared with the normal 12 percent. (Beer is usually 3.2 percent alcohol.) ''We've positioned it - not necessarily as a table wine, but for other occasions. So people would find other occasions to drink wines,'' Mr. Theis says.
While light-wine sales are not booming, winemakers hope that ''in the long run it will be just as effective as light beers,'' says John Senkevich, president of Geyser Peak Wineries, which is now testing a light wine in the market. With Phillip Morris's guiding hand and well-padded billfold, Miller created a market for light beer in the mid-'70s. Today, lower-calorie beer constitutes 18 percent of all beer sales, according to the brewers' association.
Low-calorie and low-alcohol-content beverages are intended to serve a perceived shift in taste preferences. Americans are more ''health and fitness conscious,'' according to beverage analysts. This taste shift, along with the recession, is one explanation for a recent decline in distilled-liquor sales - and the longer term increase in wine, soft-drink, and bottled-water sales.
Also, ''the push against drunk driving and other attendant (negative) mental images'' associated with liquor may have brought sales down, says E. F. Hutton analyst David Goldman.
To compensate, liquor advertisers are snuggling up to more respectable beverages. There is ''emphasis on fruit-flavored and mixed (alcoholic) drinks, and you'll find that advertisements don't stress alcoholic content,'' says George Hacker, one of the authors of ''The Booze Merchants,'' the CSPI study. Many distilled liquors are promoted alongside soda pop, fruit juices, and cream.
However, those in organizations fighting alcoholism see low-alcohol-content beverages as a mixed blessing. Says Robert Hammond, executive director of the Alcohol Research Information Service: ''The lower alcohol content tends to appeal to women. More women are using alcohol as more women have disposable income. And women are very much a targeted audience.''
In June, a new newsletter entitled The Woman's Market was sent to liquor retailers, offering them tips on how to increase sales to women. Schenley Distillers Company sponsored the letter in conjunction with its fruit-flavored mixed drink, Cocktails for Two, described in publicity material as having ''a high profile to women.''
Alcohol advertising has shifted from general to specialty magazines as companies have become more certain of their targets. ''Many of the new magazines , like Ms., which cater to young, more educated women, are chock-full of (alcoholic-beverage) ads. More and more of the ads are geared expressly for women. . . .,'' the CSPI report says.
While the data on whether advertising and promotions actually create new drinkers are conflicting, there is concern that the number of female alcoholics is increasing. For the first time ever, last year the proportion of women to men in Alcoholics Anonymous rose to 1 in 3.
''The highest number of women alcoholics are in the divorced and separated catagory,'' says Dr. Sheila Blume, medical director of the National Council on Alcoholism, referring to a study done by the Rand Corporation. ''The next-highest category is working mothers.''
Coupons and cash rebates are another new marketing avenue the alcoholic-beverage industry is exploring. For example, Bacardi Imports, in what trade magazine Advertising Age calls ''a first for the spirits industry'' is testing in cooperation with American Express a mailing of rebate certificates for Bacardi distilled-liquor products in Colorado. The mailing is designed for ''heavy distilled-spirits users'' and ''heavy rum drinkers.''
Meanwhile, Wine Spectrum is in a legal fight with the California alcoholic-beverage control board over a recent $1 rebate coupon. This is the third time the board has attempted to impede Wine Spectrums marketing efforts. Twice the company has won its case before the state Bureau of Alcohol, Tobacco, and Firearms while managing to stretch the interpretation of advertising laws. Just last month Wine Spectrum came out with another coupon-rebate offer.
While more advertising and promotions may have built successful empires for some companies, the attention is putting the whole alcoholic-beverage industry under fire.
''They (anti-alcohol groups) are moving on all fronts,'' says Brian St. Pierre of the National Wine Institute, a California wine growers trade association. The counteroffensive is taking shape along these lines:
* A draft of a Center for Science in the Public Interest petition is now making the rounds among alcoholism, drunk-driving, consumer-health, and church groups. Based on suggestions in ''The Booze Merchants,'' the petition calls for an investigation of alcohol-marketing practices and for restrictions on promoting alcohol use among youth and heavy drinkers - including restrictions on advertising in the broadcast media, according to Mr. Hacker. The CSPI expects to submit the petition to the Federal Trade Commission in the fall.
* Legislation to restrict alcohol advertising has been introduced in at least 10 states in the last six months.
* A bill introduced in May by Rep. George E. Brown Jr. (D) of California would require health warnings on labels and in alcohol ads. Sen. Strom Thurmond (R) of South Carolina is also working on a labeling bill.
As yet, optimism holds sway within the industry. Analysts predict continued growth. ''We're basically winning the fight for reasonable access to the market, '' says Mr. St. Pierre of the Wine Institute.
Gaining access to the market by opening more distribution channels is an ongoing effort. Currently grocery stores are not allowed to sell wine in 16 states; in five states they cannot handle beer; and in 30, they are prohibited from selling liquor. But in states opening supermarkets up to wine in recent years, ''sales have more than doubled in the first several years. It is a very profitable outlet,'' says Robert Hammond, of the Alcohol Research Information Service.
''Its easier to stick a bottle under the hamburger buns in your cart than carry it out of a liquor store in a little paper bag shaped like a bottle,'' Mr. Hammond says. ''Getting beer and wine in with food makes it more acceptable.''
Beer and wine can be found among the food sold at a growing number of gas stations, too. Despite a strong grass-roots drive against drunk driving, Atlantic Richfield Company (Arco) gasoline stations are adding minimarts that sell beer and wine. Conversions to the gas and grocery setup began in 1980. There are about 250 dual-purpose Arco stations in California, and some 750 nationwide. About two-thirds of the outlets sell beer and wine.
Opposition to such ''beer and gas'' outlets is growing. ''Because of the concern about drunk driving, we're seeing more legislative proposals to prohibit sales of beer in convenience stores that also sell gas,'' says a US Brewers Association spokeswoman.
Legislation to force Texas stores to choose between beer and gas, which together account for over 50 percent of convenience-store sales, was defeated in June. A lobbyist for the National Association of Convenience Stores said there ''simply is no hard data to suggest that removing the convenience of a single retail purchase point will cut down on drunk driving.'' Ohio, Michigan, Indiana, and New Jersey are also considering this type of legislation.
Meanwhile, ball parks are slowing opening their gates to wine. The trend is ''not radically new, says Mr. St. Pierre of the Wine Institute, ''But you're liable to see an expansion of such sales. Packaging changes, such as wine in a (soft-drink-size) can, may be the breakthrough here,'' he explains.
Beer sales and promotions have been keyed to athletic events for a number of years. Marketing studies have shown the heavy drinker also tends to be a sports fan. In the late '70s, with the Miller Brewing Company breathing down its neck.
Anheuser-Busch turned to sports promotions and tie-ins to maintain its grip on the No. 1 beer-sales position, analysts say. ''Anheuser-Busch (Budweiser) reigns supreme in the sports field, sponsoring 98 professional and 380 college sports events in a recent year - the same figures in 1976 were 12 and 7 respectively,'' the CSPI report says.