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Pernod Ricard Leverages Its Big-Name Spirits With Hybrid Line Extensions

November 27, 2013

Blending has long been a staple in both spirits and wine, but it’s only recently that producers have started to experiment by merging their products with other categories. A variety of new labels have been released that blur the lines between traditional drinks categories with flavorful results—rum and Tequila, vodka and Sauvignon Blanc, Cognac and Moscato. The possibilities are endless.

One major player that’s found success in this area is Pernod Ricard USA with Malibu Red ($16.99), a blend of rum and Tequila. Launched in March 2012 with higher alcohol content than the flagship coconut-flavored rum (35% abv versus 21% abv for the core brand), Malibu Red is marketed with the tagline “Taste the Smooth. Feel the Fire.” R&B singer and actor Ne-Yo is creative director for the label and features prominently in its advertising. Despite being available only in select markets in the U.S., Malibu Red sold more than 100,000 cases in its first 18 months on the market.

“We’re finding broad appeal, particularly with multicultural consumers,” says Josh Hayes, senior brand director for Malibu at Pernod Ricard USA. “The idea that a product resides solely in one category is no longer true in consumers’ minds. People are more experimental than ever before.” For most hybrid products, the hardest part of attracting new consumers is overcoming the confusion and preconceived notions about something so different. Hayes says public outreach has been crucial to Malibu Red’s success. “Familiarity with Malibu original is high, so we had to forge a new path with Malibu Red through education,” Hayes explains.

Pernod Ricard’s category-crossing innovation also extends to the Absolut vodka brand, which unveiled Absolut Tune last year in select markets. The hybrid offering blends Absolut’s flagship vodka with New Zealand Sauvignon Blanc and is carbonated. Absolut Tune ($31.99), at 14% abv, launched nationally earlier this year in preparation for the holiday season. “Bubbles have always been associated with celebration, but the vodka element injects fun and makes Tune more appropriate for casual occasions,” says Absolut senior brand manager Shefali Murdia. “Wine and vodka play extremely well together.” Pernod Ricard has invested heavily in sampling events and has focused sharply on Absolut Tune’s packaging, which features a white outer sleeve that unzips to reveal a Champagne-like black and gold bottle inside.

While it remains to be seen how long the hybrid product boom will last, right now there’s little doubt that it will keep expanding in the near future. “As innovation becomes an even bigger growth driver in spirits, we’ll see more hybrid products enter the landscape,” says Murdia. “We’re pioneering a new category and we think the future looks bright.”

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