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“Alcopops” An Alcohol Delivery System for the Pepsi Generation. George A. Hacker Director, Alcohol Policies Project Center for Science in the Public Interest Alcohol Policy XIII March 13-16, 2003. Main Points.

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“Alcopops” An Alcohol Delivery System for the Pepsi Generation

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Alcopops an alcohol delivery system for the pepsi generation l.jpg

“Alcopops”An Alcohol Delivery System for the Pepsi Generation

George A. Hacker

Director, Alcohol Policies Project

Center for Science in the Public Interest

Alcohol Policy XIII

March 13-16, 2003


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Main Points

  • Alcohol producers need young drinkers to expand and maintain their core market, heavy drinkers

  • Product development aims at attracting new drinkers

  • Producers reach and influence underage persons

  • Policy recommendations


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Youth: The Training Ground for Heavy Drinking

  • Young Adults aged 18-29 account for 45% of total alcohol consumption. (Greenfield & Rodgers, 1999a)

  • Teenagers drink more than 10% of all alcohol consumed in the U.S. (NHSDA, 2001)

  • 18-25 year-olds binge drink at the highest rates (38.7%), peaking at age 21 (48.2%). Heavy drinking also peaks at age 21 (17.8%). (Summary of Findings from the 2001 National Household Survey on Drug Abuse [NHSDA], U.S. Department of Health and Human Services, 2002)

  • 6.8 million youths aged 12-20 (19.0%) are binge drinkers. (NHSDA, 2002)


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(Summary of Findings from the 2001 National Household Survey on Drug Abuse, U.S. Departmentof Health and Human Services, 2002:26)


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Alcoholic beverage producers compete with all liquid products for:

Share of wallet

and

Share of throat

(Growth Strategies in Alcoholic Drinks, Reuters, 2000)


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Growing the Alcohol Market

  • Alcohol producers seek new consumers and attempt to create new drinking options and opportunities for current alcohol consumers.

  • “Sales of traditional alcoholic beverages are in decline, so companies are looking for other categories to sell,” said Peter Reid, editor of Modern Brewery Age. “Brewers have been looking for stuff that will appeal to groups that don’t drink beer, as a means to develop a broader demographic pool.”

    (Minneapolis-St. Paul City Business, May 9, 1997)


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New Product Examples

  • Fruit-flavored Vodkas (lemon, orange, etc.)

  • Fruit-flavored gelatin shots (Zippershots)

  • Chocolate and Raspberry Beer

  • Ready-to-drink cocktails, brews and “coolers,” such as “alcopops”

  • Maple syrup and Canadian whiskey (Sortilege)


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New Products Promote Sales Growth

  • “Closer examination of Diageo’s premium drinks empire reveals that more than 65% of total net sales growth was generated by new products….The bulk of this innovation is derived from its RTD brands.”

    –Canadean Beverage Research Company, as quoted in “Diageo Stands Firm in Tough Market”, http://www.just-drinks.com: 25 February 2003


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…And Bring in New Drinkers

  • An estimated 65% of previous or current beer drinkers consume malternatives.

  • 30% of malternative drinkers are new to the market.

Rovito, R. “Miller to join ‘malternative’ craze.” The Business Journal of Milwaukee. http://Milwaukee.buzjournals.com/Milwaukee/stories/2001/12/10/story1.html. 10 December 2001.


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Alcopops in the U.S.

  • Sweet taste, easy-to-drink

  • Disguised taste of alcohol

  • Bright, colorful packaging

  • Generally malt based

  • Alcohol content similar to beer

  • Mostly lemon flavored; new tastes are being developed


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Alcopops Target Young People

  • Teens are three times more likely than adults to have seen or heard about alcopops.

  • Teens (41%) are nearly twice as likely as adults (24%) to have tried alcopops.

  • Both teens (67%) and adults (72%) believe that liquor and beer companies target young people with their advertising and that this contributes to underage drinking.

    (CSPI Poll, May 2001)


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“Marketers of low-alcohol refreshers, the so-called ‘malternatives’ such as Smirnoff Ice, delivered 60% more [magazine] advertising to youth than to adults.”

“OVEREXPOSED: Youth a Target of Alcohol Advertising in Magazines,” The Center on Alcohol Marketing and Youth at Georgetown University, September 24, 2002


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Industry Sources Confirm that “Alcopops” Target Young Consumers

  • “With younger drinkers, their palates haven’t quite matured yet to drinks like bourbon. “Malternatives” are a sweeter drink, they’re easier to drink and it takes less time to mature to the taste.” – Trish Rohrer, Brand Development manager for Boston Beer Company in “Malternative Universe”, Restaurants USA, May 2002.


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Anheuser-Busch on “Malternatives”

“The beauty of this category is that it brings in new drinkers, people who really don’t like the taste of beer,” said Marlene Coulis, A-B’s director of new products.

(Advertising Age, April 22, 2002)


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Liquor-Branded Alcopops

  • Smirnoff Ice – Diageo

  • Bacardi Silver – A-B/Bacardi

  • Skyy Blue – Miller/ Skyy Spirits

  • Jack Daniel’s Hard Cola- Brown-Forman

  • Captain Morgan Gold- Diageo

  • Sauza Diablo- Miller/Allied Domecq

  • Stolichnaya Citrona- Miller/Allied Domecq

  • New For 2003

  • Smirnoff Triple Black- Diageo

  • O3- A-B/Bacardi


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Alcopops Promote Liquor Brands

“A big component of brand strength is awareness – awareness is almost 60 percent of it. Just having that name on network television in the right place, and also being able to wrap it up with a right-brained psychological atmosphere does a lot for the parent brand.”

John V. Allen, senior partner, Lippicott & Margolies in CBS.MarketWatch.com, June 1, 2002


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Teens See a Liquor Brand – They Think Liquor

Is Each More Like Beer, Wine, or Liquor?

(CSPI Poll, July 2002)


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Liquor Brand Names Confuse Consumers

“The ATF believes…the use of well-known distilled spirits brand names and terms on labels of flavored malt beverages causes confusion for consumers, the media, and State regulatory and taxing organizations. ATF believes this practice…leads consumers to believe distilled spirits are present in these flavored malt beverages.” –ATF Industry Circular 2002-4, April 8, 2002


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Diageo’s Smirnoff Ice

  • “One part of that marketing reach is getting uninitiated imbibers to belly up to a liquor choice.”

  • Smirnoff Ice is up 18% in Great Britain in two years, and Smirnoff Red’s (the vodka) six-month volume went up 26% over the previous year.

    (Forbes, April 15, 2002)


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Teens are Getting the Alcohol Message

Most teens (an estimated 22 million in the United States) watch television after 9 p.m. on school nights during the week. Nearly 17 million of those youths who watch TV after 9 p.m. lack adult supervision at least some of the time.

(CSPI Poll, July 2002)


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Top-of-Mind Advertising Recall Among Teens is High

  • Teens say they pay little attention to late-night commercials on school nights, but have high product and brand recall.

    • More than half (53%) cite 1 of 4 product categories they see advertising for: cars, cosmetics, movies and alcohol

    • 62% can name, top-of-mind, a specific company or brand: tops were Nestle, Nike, Budweiser, McDonalds and Pepsi

(CSPI Poll, July 2002)


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Top-of-Mind Advertising Recall forAlcoholic Beverages Ranked Fourth

Top-of-mind recall of advertising for alcoholic beverages ranks fourth, even though ad expenditures are dwarfed by other industries

Billions - TV Ads

$7.4

$2.2

$2.5

$0.9

Top-of-Mind Awareness

(CSPI Poll, July 2002)


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Industry Ads for Alcohol Pay Off Big in Teen Awareness

For every $1 Billion spent on TV advertising:

  • Cars get 2.8% awareness

  • Cosmetics get 7.7% awareness

  • Movies get 5.6% awareness

  • Alcohol gets 12.2% awareness (conservative)


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Aided Awareness of Liquor-Branded Alcopops is Very High: Low False Positives

(CSPI Poll, July 2002)


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Adults Support Restrictions on the Marketing of Alcopops to Teenagers

  • 84% of adults support labeling "alcopops" with clear indications of alcohol content (69% Strongly Support)

  • 75% of adults support restrictions on the types of stores where "alcopops" can be sold so it is more difficult for underage persons to buy them. (57% Strongly Support)

  • 72% of adults support policies to ensure that "alcopops" are separated from non-alcoholic beverages on store shelves or in store coolers. (59% Strongly Support)

  • 73% of adults support diverting some of the profits from the sale of "alcopops" to fund a program to prevent underage drinking. (49% Strongly Support)

  • 62% of adults support restrictions on youth-oriented images in the design of labeling and advertising of "alcopops” (43% Strongly Support)

(CSPI Poll, May 2001)


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Policy Recommendations

  • Liquor-branded products should be classified as distilled spirits:

    • Sales of "alcopops" should be limited to places such as liquor stores

    • Products should be taxed at a higher rate

    • TV networks should apply voluntary ban on hard-liquor advertising to "alcopops"


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