Nothing is softer or more flexible than water, yet nothing can resist it – Lao Tzu
Alcohol, as a commodity, is recession-proof. You drink when you’re rich and you drink when you’re poor. You drink when you rejoice and you drink when you lament. You drink in birth and you drink in death. Drink accompanies almost every social interaction and forms the foundation for our life of leisure as human beings. Regardless of how much or how little money you have, alcohol is factored into your budget in some way or another, be it champagne in your Napa Valley retreat or a bottle of Popov in a parking lot.
A mesmerizing substance with stunning diversity and complexity to some, and a merciless demon bottled and breathing to others, it has proved to be an extraordinarily lucrative industry in spite of the recent rough economic waters. Hard liquor lacks sell-by-dates, surpasses seasonal trends, and is, perhaps most importantly, addictive.
Yet despite the vast array of tipple that exists, the world of liquor is monopolized by a handful of multinational companies. They gobble up the small, family-run businesses and distribute their well-nourished water around the world, attaching intricate brand awareness and marketing strategies in the process. While it sounds like an affront to tradition and family values, how else can you sell your obscure, peaty island scotch in a convoluted world of global commerce and trade?
The Savory takes a look at the companies that are in control of the aqua vita and how they influence our drinking habits around the world.
Diageo – UK
Brands – Smirnoff, Johnnie Walker, Ketel, Ciroc, Tanqueray, Guinness, Baileys
Since the 1997 merging between Grand Metropolitan and Guinness, Diageo has established itself as the largest liquor distributor in the world. With about $15 billion in annual revenue, 25,000 employees and distribution net cast over 180 markets worldwide, Diageo distributes products that sell in huge volumes.
Looking over their roster of products we can see a motley crew of strongly branded, relatively low-end liquors all coming in at around $15 to $30 a bottle, with the exception of Johnnie Walker (the world’s highest-selling whiskey), which can be sold for exasperating sums of money depending on the color of its label.
Diageo knows precisely who they’re targeting with their products and they hold the lion’s share of the ‘Drink To Get Drunk’ market.
LVMH – France
Brands – Moët & Chandon, Hennessy, Belvedere, Dom Pérignon, Glenmorangie
The coming together of Louis Vuitton and Moët Hennessy in 1987 brought about a huge new force in the luxury goods market, and in turn created a startlingly powerful brand image. ‘Attainable luxury’ is the concept, much in the same way that Mercedes and BMW have managed to market themselves.
Dealing primarily with high-end consumer goods, LVMH wants you to have to reach for the top-shelf to get their products. Their ideal brand image would be George Clooney bursting open a bottle of Veuve over his Tag Heuer watch and then reaching into his Louis Vuitton man bag for a Pink handkerchief to wipe it off. Effortless $80,000 a year class.
Pernod-Ricard – France
Brands – Absolut, Chivas Regal, Beefeater, Jameson, Glenlivet, Perrier-Jouët, Malibu
Pernod was founded in the late 1700s when Henri-Louis Pernod started his own absinthe distillery in Switzerland. It eventually merged with its main French competitor, Ricard, in 1975. The company has since gone on to operate with around $7.5 billion in revenue and about 18,000 people on the payroll.
Along with Bacardi, Pernod-Ricard is probably the strongest rival of Diageo, with its products battling for that sought-after space in mid premium wells around the world. Yet with Chivas Regal being rival to Johnnie Walker, and Absolut rival to Smirnoff, it’s apparent that Pernod-Ricard certainly have stronger products but are being held back by significantly weaker branding and a marginally higher price point.
Bacardi – Cuba/Bermuda
Brands – Bacardi, Grey Goose, Cazadores, Bombay Sapphire, Martini, Dewar’s
This Cuban company is the only family-owned business on the list and has built its empire atop the rum that carries its name. Based in Bermuda, the company has been redefining people’s gin and vodka consumption with Bombay Sapphire and Grey Goose, encouraging consumers to leave the well and start shopping on the shelving unit. It has also kept the American market mojitoed up with Bacardi, in place of the embargoed Havana Club.
Cazadores is far from the average drinker’s go-to tequila, being shunted out by Patron, Sauza and Jose Cuervo. Dewar’s, allegedly the No. 1 selling blended scotch in America, is in the process of being rebranded as something that James Bond’s blackjack-playing Slovenian mistress would drink. But it’s the company’s envious vodka, gin and rum roster that really makes them stand out as a major distributor.
While big business will inevitably appear to be somewhat evil, it’s worth noting that without these companies the people of the United States wouldn’t know the pleasure of hot sake, Scandanavian small batch vodka, and almost all of the whiskies in Scotland. Their financial clout allows these distilleries to continue operating in the face of heavily saturated, and often tiny, home markets.
The companies often take a hands-off approach to the distilleries practices, and have been known to be sympathetic to the finely-tuned compromise that exists between quantity and quality. They understand that certain kinds of alcohol are valued on the romanticism of tradition, and these preserved stories are imperative to their value and branding. And while some could argue that the gulf between grain and glass is far too vast in this global market, the ability to try water from all over the world at relatively affordable rates is a true contemporary luxury.