How liquor companies are breaking into minority markets?xml:namespace prefix = o ns = “urn:schemas-microsoft-com:office:office” /

Source: MarketWatch

By Charles Passy

Aug 13, 2015

To the casual observer, a recent gathering of whiskey aficionados at a trendy New York catering space might have appeared like any high-end tasting affair. The crowd was a typical one – primarily professionals in their 20s through 50s. The routine was familiar, too: At each tasting station, brand representatives talked up their spirits – mostly top-shelf single-malt Scotches and bourbons – with a geeky enthusiasm and then offered samples of the pricey pours.

But to those paying closer attention, a few signs suggested this night was different from all other nights, to borrow an apt phrase from a Jewish text. For starters, many of the men in attendance wore a yarmulke, the skullcap associated with the Jewish faith. And the feast that accompanied the drinking was strictly kosher, replete with the classic Jewish stew known as cholent.

In short, this wasn’t just any whiskey festival. It was the Whisky Jewbilee, a one-of-a-kind gathering of Jews with a passion for quality booze. The annual New York bash, put together by a company appropriately called the Jewish Whisky Company, is gaining fast in popularity since its inception in 2012. Even with $125 ticket price, attendance has doubled to 450, and the number of brands represented has nearly tripled to 80. Moreover, the festival is going national: Jewbilees are planned in the coming months for Chicago and Seattle.

But in a larger sense, the Jewbilee represents a growing movement in the spirits industry to court all sorts of sizable or significant racial and ethnic groups – Hispanics (which constitute 17.1% of the U.S. population, according to the Census Bureau), African-Americans (13.2%), Asian-Americans (5.3%), and, yes, even the relatively small but affluent American Jewish market (religious Jews make up just 1.8% of the U.S. population, but 25% of American Jewish households have incomes of $150,000-plus, according to the Pew Research Center.)

The movement comes at a time when the booze business is posting healthy numbers: U.S. supplier sales were up 4% to $23.1 billion in 2014, according to the Distilled Spirits Council of the United States (DISCUS). (Retail sales were nearly $70 billion.) But industry watchers and insiders alike say the business, which is very much subject to changing tastes (this year’s “it” drink can be next year’s bottle gathering dust on a bar’s back shelf), must pay heed to how the consumer marketplace is evolving.

And that means the industry, which for decades largely targeted the white mainstream (think the “Mad Men”-era, three-martini-lunch crowd), now has to view the world (or at least the U.S.) with a multicultural mindset. After all, ours is a country where the so-called minority is rapidly becoming the majority: Today, 50.2% of the children under the age of five in the U.S. are minorities, according to the Census Bureau. “The population as a whole has become more racially and ethnically diverse,” says the Census.

In turn, this means spirits companies are investing heavily – to the tune of millions of dollars – in their outreach to minorities. Diageo, the world’s largest spirits company has gone as far as to commit 35% of its advertising budget to the multicultural segment, according to a story a few years ago in Shanken News Daily, an industry trade journal. (The company’s U.S. marketing and advertising budget topped $800 million in 2014, according to its annual report; Diageo officials would not respond to a request for comment about specifics relating to its current multicultural marketing budget, except to say the budget is now broken down somewhat differently.)

As Rodney Williams, an executive vice president with Moet Hennessy, another spirits giant, puts it, there was time in the business world when the “ethnic marketing budget was always the last to be funded and the first to be cut in budget in tightening. Those days are gone.”

Moet Hennessy’s approach in the multicultural market reflects this commitment.

The company targets just about every group with ad campaigns, promotions, parties and charitable endeavors. In the Hispanic community, it hosts “Latinos in Baseball” events that recognize the important achievements of that group to the sport. In the Asian-American community, it has put on a party in celebration of the Chinese New Year. (It has also released a 250th-anniversary limited-edition bottling of its Hennessy Cognac with deep-pocketed Asian-American consumers in mind.) And in the African-American community, where Cognac has been historically popular, it maintains ties by bringing hip-hop star Nas aboard as a Hennessy brand pitchman and by supporting the National Urban League. Indeed, the ties are so strong that Ebony magazine has gone so far as to call Hennessy “the unofficial spirit of Black America.”

But Moet Hennessy is far from alone, as other spirits brands and companies are making similar inroads with multicultural constituencies. At Beam Suntory, there’s a push to create sales materials in Spanish, according to Jamie MacKenzie, a sales executive with the company’s line of single-malt Scotches. (Mackenzie is also an enthusiastic supporter of the Whisky Jewbilee, saying it’s “an opportunity to look more broadly beyond the obvious events and meet some new consumers.”)