The presidents of five of the world’s largest luxury liquor brands converged in Puerto Rico Tuesday to discuss the tendencies, challenges, and opportunities faced by the industry and their take on today’s consumers and markets.
The conclusion? Never sacrifice the quality or the image of a brand because even as the economy spirals, customers will remain loyal to the product.
“When you sell a true brand, stay close to the people you cater to even in bad times. Companies have to be brave enough to make sacrifices for long-term results, as the crisis will end and better times will come,” said Jean-François M.L. van Boxmeer, CEO of Heineken International N.V. “Never underinvest in your brands.”
Heineken, which commands 20 percent of the island’s beer market, was one of several companies represented at the event to mark its distributor Méndez & Co.’s 100th anniversary.
The Diageo, Veuve Cliquot, Bacardí Corporation and Fine Estates from Spain products have all been part of Méndez’s portfolio of products for decades, a consistency the executives credited for solidifying their presence in Puerto Rico.
“Puerto Rico is one of the most important markets for Diageo in Central America and the Caribbean and that’s because of the platform Mendez has built,” said Diageo President for Latin America and the Caribbean, Randy Millian, during a panel discussion held at the Fine Arts Cinemas in Hato Rey.
The importance of relying on a local partner to develop a brand has everything to do with its longevity in the market, especially as the economy sours, the executives said.
“Despite the recession that Puerto Rico is going through, and although times are not as buoyant as they were, our brand strength is as strong as ever,” van Boxmeer said.
The luxury beverage segment has had to evolve and reinvent itself to take on the challenge of lagging economies, and greater consumer education, said Luis Álvarez, vice president of the Méndez & Co. Liquor Division.
“Globalization and access to information has increased consumers’ level of education. This knowledge allows consumers to make choices based on the quality of ingredients as well as the traditional and sophisticated processes of luxury products,” he said.
And because luxury liquor brands cater to specific consumer segments, keeping them aspirational – meaning that a large segment of its audience wishes to own it, but for economical reasons cannot — is important because when things improve, they will come back, said Millian.
“During the tough times, you can really build a brand,” he said. “If you bring the price down, you kill the aspirationality.”
Meanwhile, Joaquín Bacardí, president of Bacardí Corp. said a segment that has been fueling business in recent years is the older generation, which tends to seek better quality liquors.
“That’s good for luxury brands, and it’s a trade-off we get when economies get difficult,” said Bacardí. “When economies get difficult we see the people that tend to consume luxury brands pretty much continue to consume them, less frequently, but they do.”
Davide Marcovitch, president Veuve Clicquot for Latin America, Africa, the Middle East, and Canada and Jorge Ordoñez, president of Fine Estates from Spain rounded out the panel discussion.