Brand Extension Series: Jack Daniel’s and the Spirit of America

 

For the first installment of our brand extension deep dive series, we’re looking at Jack Daniel’s and the many avenues that the brand has successfully explored.

With its image of rugged masculinity and tradition, Jack Daniel’s has managed to transcend the traditional producer-consumer relationship and reach a status that most brands only dream about – they have become an active part of their consumers’ lifestyles, and are, in many cases, a symbol for who the consumer perceives themselves to be. In this way, Jack Daniel’s is similar to other rebellious, all-American brands, like Harley-Davidson or Levi’s. However, among its peers, Jack Daniel’s has seen unprecedented success with its non-alcoholic products.

 

 

Because of its status as a lifestyle brand, Jack Daniel’s expansion into clothing and other material products feels natural. With such a strong brand character, it makes sense that fans of Jack that strongly identify with the whiskey would want to wear t-shirts and hats displaying the classic logo. The brand’s prominent presence in decades of pop culture has really helped in this area, too – from Jerry Lee Lewis’s country hit “Jack Daniel’s Old No. 7” to Ke$ha’s “TiK ToK”, generations of celebrities have publicly praised the whiskey.

 

 

But how does a love of whiskey and a rough-and-tumble lifestyle translate to mustard, marinade, or caramel purchases? The company’s first foray into food was nearly 30 years ago, when they launched the Jack Daniel’s Spirit of Tennessee Cookbook, with recipes that heavily featured the whiskey. In 2001, Jack Daniel’s owner, Brown-Forman, licensed the name to Heinz U.S.A. for the first line of sauces and marinades. The idea was that any customer, no matter where they were, could be part of the “Jack Daniel’s lifestyle” – which had come to encompass all things American (and, in particular, Southern), including barbecue.

 

 

The timing of this new product release was incredibly important for how successful it became. First, 9/11 created a culture of patriotic consumerism, where buying iconic products that were American-made felt like a responsibility. Jack Daniel’s represented the toughest, most down-home part of the quintessential “American Spirit”, making the brand seem very attractive to shoppers who wanted to support the values that the company represented.

 

 

Second, thanks to media like Sex and the City, feminine drinks were gaining a lot of social prominence in the late 90’s and early 2000’s. For many, embracing the Jack Daniel’s brand in all avenues of life was likely a reaction to that, a way of protecting an image and tradition that seemed like it could be slipping away.

Had that first line of sauces and marinades not been so popular, it’s unlikely that Jack Daniel’s could have carried the brand into such a diverse portfolio of products. Notably, the company has been smart with the way that they’ve leveraged the brand name and their existing product line. After all, Jack Daniel’s coffee seems less strange when you’ve already tried Jack Daniel’s cake, just as Jack Daniel’s cake seems less strange after you’ve had Jack Daniel’s praline pecans. The company has rarely produced a new item that didn’t feel like a natural extension of everything that came before it, and this growth strategy has made Jack Daniel’s the brand extension leader that it is today.

The Present and Future of Alcohol

Alcohol is a multibillion-dollar market in the US, one that must constantly evolve in order to keep up with changing consumer needs. The category has seen some serious innovation so far this year, and our understanding of where the industry is now has provided us with some pretty significant clues as to where we can expect it to go in the near future.

The Present: Millennials Don’t Have Brand Loyalty

 

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According to a recent Nielsen study, last month only 24% of millennials knew what brand they wanted to purchase when they entered a liquor store. This is in stark contrast to 52% of baby boomers, who tend to have more developed, concrete preferences in this category. The study also found that just 11% of millennials bought alcohol on impulse.

What This Means for the Future

 

Alcohol brands can look at millennials’ lack of brand loyalty as an opportunity to have greater influence in-store, which means more investment in assets like package design and in-store advertising. Additionally, brands can be expected to make stronger attempts at building relationships with consumers via social media engagement.

The Present: Heineken Just Debuted a Non-Alcoholic Beer

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Heineken just released “Heinken 0.0” in order to compete with industry giants like AB InBev, which has made it their goal for 20% of their beer to be low- or zero-alcohol within the next eight years. Non-alcoholic beer manufacturers are also seeing the product as a potential rival to soft drinks, which have been losing retail momentum to lower-calorie options (Heineken 0.0 has half the calories of Coca-Cola).

What This Means for the Future

 

Beer brands – as well as other alcohol manufacturers – are going to start considering the financial promise of alternative markets. While producing non-alcoholic beverages may seem like an odd departure from convention for Heineken, research has shown that the European market for non-alcoholic beer has grown over the past five years as the overall beer market shrank. In Spain, zero-alcohol beers have as much as 10% market share. The future of the alcohol industry is going to depend on identifying and supporting niche trends like this that show potential for going global.

 

The Present: “Poptails” are Taking Off in the US

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The recent trend of “sloshies” (frozen alcoholic slushies, usually with a white wine base) has now evolved into “poptails”, frozen alcoholic popsicles. Initially introduced into the UK market, the treat has just become available in the US through brands like FrutaPop. Each pop in this particular brand has 5% alcohol and comes in thirteen flavors, including Sparkling Prosecco, Cranberry Mojito, Pina Colada, Rum Punch, and White Coconut Sangria.

What This Means for the Future

 

Innovation in the alcohol industry is trending towards understanding the consumer’s environment. Both poptails and sloshies appeal to young people drinking outdoors – summertime parties, poolside lounging, and beach trips are all served well by these products. Additionally, freezing the drink allows brands to incorporate the kind of special cocktail features that one could find in a bar, like the sprig of mint encased in the boozy Watermelon Mint Lemonade Pop. Finding ways to include these types of added-value traits is going to be imperative for new product development.

 

The Present: e-Commerce is Changing the Game

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The explosion in popularity of both online shopping and subscription box services is affecting the way that alcohol brands are packaging their products. Bulky, heavy glass bottles were never especially ideal for shipping from warehouses to retail locations, and they are doubly impractical for direct mailing. UK startup Garcon Wines has been in the news lately for their ingenious flat bottle design, intended to make the wine easier to fit through a traditional English letterbox.

 What This Means for the Future

 

Alcohol manufacturers (particularly wine companies) will begin straying from classic bottle designs and will start looking towards new solutions that preserve the product in a lightweight, yet functional way. It can be as simple as following Garcon Wines’ example with more compact structures, or brands can go as far as Bota Box has with their award-winning cartons, which are both much lighter and far less prone to breaking than standard wine bottles.

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As more brands begin to focus their attention on e-commerce rather than retail, design strategy will move away from what looks best on the shelf and will instead consider what will provide the easiest means of quickly transporting the alcohol to the consumer.