US Tariffs Could Signal The Death Of Provenance In Spirits Marketing, Says Globaldata

AlcoholThe role of provenance in marketing is widely prevalent in the spirits category – always by brands that have to be produced in a certain location, but also often by those that are not tied by rules of definition.

GlobalData’s Drinks Editor, Olly Wehring, believes recent global economic developments will likely have many spirits brand owners thinking the unthinkable: “Why don’t we move our production in-market?”

When the US Government announced its intention last week to introduce tariffs on swathes of products from the European Union, Campari Group CEO Bob Kunze-Concewitz put forward a simple solution: “If the tariffs are really high,” he told Bloomberg yesterday, “then we might have to look at delocalising production and going elsewhere.”

This makes perfect sense for the likes of Campari and Aperol, two brands that, really, could be made anywhere. It makes yet more sense for Campari Group, which already has production facilities in the US thanks to its ownership of Wild Turkey Kentucky Bourbon and Skyy Vodka.

Granted, Scotch whisky and Irish whiskey are two categories that would struggle to be produced anywhere else – and that is putting it mildly.

However, take Pernod Ricard’s Beefeater Gin: Much as Pernod makes the most of Beefeater’s London roots, there is nothing by way of definition rules – indeed, ‘London Dry Gin’ can hail from, well, anywhere – that makes the UK the brand’s compulsory home. Distilling Beefeater in the US for the US market would surely lead to fewer sleepless nights for Pernod’s top brass.

Then, there is Ketel One, Diageo’s vodka brand produced by the Nolet family in the Netherlands. With the US delivering a 10% jump in the brand’s sales in fiscal-2019, why not make it in the US?

Staying with vodka, does Bacardi have to produce Grey Goose in France?

Such moves would certainly be seismic in the global spirits category, regardless of how much sense they make. However, in these seismic times, we are fast approaching a time where nothing would surprise us anymore.