Brown-Forman to give marketing boost to Finlandia
world's third-largest premium imported vodka brand, but it is set
to improve its position even further following the transfer of the
brand's marketing to Brown-Forman, the group behind Jack Daniel's.
In the 30 or so years since its launch, Finlandia vodka has gathered an increasingly large and loyal following around the world, with sales of 14.6 million litres in 2001 making it the third largest premium imported vodka in the world behind Absolut and Stolichnaya.
In the last two years, the geographical reach and the marketing clout of the brand have been boosted considerably by the partnership between Finlandia's producer, the Finnish wine and spirit company Altia, and Brown-Forman, the US group behind such well-known brands as Jack Daniel's and Southern Comfort.
Finlandia Vodka Worldwide, as that joint venture is known, has played no small part in boosting sales of the vodka since its creation in 2000, and the brand is now set to get a further boost with the news that B-F is to take sole responsibility for marketing Finlandia after increasing its stake in the joint venture.
In effect, B-F will pay Altia €70.2 million for a further 35 per cent in FVW, taking its share to 80 per cent and leaving the Finnish firm with the remaining 20 per cent. The effective change of ownership of the company means that B-F will be able to bring its considerable marketing skills - and investment potential - to bear on the brand.
In fact, B-F has already pledged to increase brand spending in the US and other important vodka markets to as much as $18 million in the first year, more than doubling the brand commitment in those markets.
Altia will continue its role as exclusive supplier of vodka to FVW until 2017, and will also be responsible for the marketing and distribution of Finlandia in Finland and Estonia, including Duty Free.
Veikko Kasurinen, president and chief executive officer of Altia, said: "This action represents the next step in Altia's plan to raise the profile of Finlandia as a leading global premium vodka. Brown-Forman has demonstrated an excellent knowledge of the market for our product and is now committing substantial marketing, sales and management resources to further its growth. It is very important for Altia to continue as exclusive supplier and to maintain the Finnish heritage of the brand."
He continued: "Naturally, the decision to give up the majority interest has been a difficult one, but it is considered to be essential for the future of the brand. In terms of its size and resources, Altia simply isn't the right company to act alone with one product on global markets."
For William Street, president of Brown-Forman, the deal strengthens Finlandia's position within the US group's portfolio. "We are delighted with the expansion of our partnership with Altia and with our new leadership role in Finlandia's development as a brand. We believe this refinement in the relationship and additional advertising and promotional spending are the logical next steps in keeping Finlandia competitive in a fast-paced, fashion intensive segment of the global spirits market."
And vodka is certainly that these days, with flavoured variants and ready-to-drink premixes adding growth to a category which was already performing well. Finlandia's first flavoured variant, cranberry, was launched in 1994, with pineapple following in 1995 and lime launched in 1999, while the company has also followed the traditional route of many spirits companies by launching a premium variant for Duty Free, called 21 (launched in 1997).
FVW has undoubtedly helped boost sales of Finlandia, and the backing of B-F has helped it break into a number of new areas, not least ousting Smirnoff as James Bond's vodka of choice in the latest movie Die Another Day. Total Finlandia sales this year are expected to reach 1.7 million cases, with the US, Canada, Poland, the Czech Republic and the Nordic countries the leading markets.
Altia said that vodka accounted for a whacking 17 per cent of world alcohol consumption in 2001, and that sales in the premium imported category have been driven mainly by the US market, but increasingly now in western Europe as well. With Central and Eastern Europe expected to follow suit in the near future as consumer patterns become more akin to those in the west, the growth potential is immense, making it vitally important that brands such as Finlandia have sufficient support in an increasingly competitive market.
