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US Spirits & Wine Ad Spend Up For First Time Since Recession Onset

May 4, 2011

Ad spending on spirits and wine in the U.S. market increased in 2010, reversing a downward trend inflicted by the recession, according to data from Kantar Media and Impact Databank. Spirits outlays rose by 3% to $428 million, while wine spending eked out a 0.2% gain to $80 million. Beer’s advertising spend, meanwhile, dipped for the third consecutive year, falling 0.6% to $1.25 billion.

Total ad spending across the U.S. drinks industry rose 0.3% to $1.76 billion last year. That’s the first increase since 2007, though still well below the 2005 total of nearly $2 billion. (The data include advertising outlays across TV, print, radio, Internet and outdoor.)

For spirits, the 2010 turnaround comes after two successive years of big declines from 2007, when spirits ad spending reached $602 million. Wine’s modest upturn ends a three-year slide, although the category’s 2010 spend remains nearly 60% below the 2006 total of $139 million.

The top five spirits brands by ad spend in 2010—Patrón (-14%), Captain Morgan (+38%), Absolut (+28%), Jack Daniel’s (-1.2%) and Skyy (whose spend quadrupled)—rose by a collective 16%. Adding in the next five highest spenders—Grey Goose (-23%), Smirnoff (-2%), Jameson (+11%), Bacardi (-44%) and Belvedere (whose spend tripled)—the top 10 increased its aggregate outlay by 7%, to $178 million.

The two brands with the largest percentage jumps, Skyy and Belvedere, have both seen creative shifts in their media forays recently. Belvedere moved its creative to Omnicom Group’s Arnell Group from WPP’s Berlin Cameron United last year and introduced a new “Trust Your Instincts” positioning.

Skyy unveiled its “Skyy Sexy” campaign last year, an attempt to bring the focus back to the parent brand after a period in which its Infusions flavor portfolio had been the priority. “We’re really starting to turn more attention to the core brand,” says Skyy chairman and ceo Gerry Ruvo. “We’ll dial that up this year and continue to push quite hard above the line.” Skyy will also be rolling out a major marketing initiative for its Wild Turkey Bourbon later this year. Meanwhile, vodka competitor Stolichnaya’s U.S. creative is open for pitches, U.S. importer William Grant & Sons recently revealed, with incumbent Ogilvy (WPP) not among those pitching. Stoli boasted a U.S. ad spend of over $10 million last year.

Beam Global is also making a notable media push, with plans to raise its spend across the U.S. portfolio by double-digits for the second consecutive year, according to North America chief Bill Newlands. “Our new Jim Beam ‘Bold Choice’ campaign, which just kicked off a month or so ago, is getting a piece of that. Red Stag is certainly getting a piece as well,” he says. “In May we’ll be doing TV spots for the first time with Maker’s Mark, and Hornitos will have more TV time this year after debuting its first spots last year.” Those campaigns, coupled with Pernod’s ongoing push behind brands like Absolut and Jameson and Diageo’s recent increase behind its strategic brands, augur well for another overall rise in U.S. spirits ad spending in 2011.

US-Top Ten Advertised Distilled Spirit Brands*
(Millions of US Dollars)
Percent Change1
Rank Brand Marketer Type 2008 2009 2010 2008-2009 2009-2010
1 Patron The Patron Spirits Co Tequila $50.9 $44.6 $38.2 -12.3% -14.4%
2 Captain Morgan2 Diageo North America Rum 14.7 19.8 27.2 34.8% 37.7%
3 Absolut2 Pernod Ricard USA Vodka 27.8 18.4 23.7 -33.7% 28.7%
4 Jack Daniel’s3 Brown Forman Beverages Worldwide Tennessee Whiskey 18.3 15.8 15.6 -13.5% -1.2%
5 Skyy2 Skyy Spirits, Inc. (Campari) Vodka 6.1 3.6 13.9 -41.7% +
Total Top Five 117.7 102.1 118.5 -13.2% 16.1%
6 Grey Goose2 Bacardi USA Vodka 11.1 16.7 12.9 49.8% -22.5%
7 Smirnoff2 Diageo North America Vodka 9.7 12.9 12.6 33.8% -2.1%
8 Jameson Pernod Ricard USA Irish Whiskey 5.3 10.3 11.4 93.1% 10.7%
9 Bacardi2 Bacardi USA Rum 11.7 20.0 11.1 71.1% -44.2%
10 Belvedere2 Moet-Hennessy USA (LVMH) Vodka 5.4 3.5 10.9 -34.1% +
Total Top Ten4 $160.9 $165.6 $177.6 2.9% 7.3%

* Includes Network TV, Spot TV, Spanish Langauge TV, Cable TV, Syndication, Magazines, Sunday Magazines, Local Magazines,
Hispanic Magazines, Business-to-Business Magazines, National Newspapers, Newspapers, Hispanic Newspapers,
Network Radio, National Spot Radio, Local Radio, Internet, and Outdoor.

1 Based on unrounded data.

2 Includes flavors.

3 Includes Jack Daniel’s single barrel.

4 Addition of columns may not agree due to rounding.

Sources: Kantar Media/Impact Databank

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