Coca-Cola Amatil is hoping a cocktail named Penicillin may be just what the doctor ordered for its drinks joint venture with global spirits house Beam.
Created by Australian mixologist Sam Ross for a bar in New York, Penicillin (Laphroaig, single-malt scotch, lemon juice and honey-ginger syrup) is one of several cocktails to be promoted by a new team of roving "brand ambassadors" established by Coca-Cola Amatil and Beam in an attempt to drive sales of spirits such as Laphroaig, Jim Beam, Canadian Club and Courvoisier.
CCA's national future brands manager, Julian Train, said the aim of the training and support program was to help move spirits "out of fridges and off back bars and into consumers' hands" with cocktails such as Penicillin, Devil's Storm and White Chocolate Fizz.
CCA and Beam are also investing more resources into promoting some of its lesser-known spirits brands as well as CCA's new range of Cascade mixers
The new program follows a tough six months for the spirits joint venture, which underpins CCA's alcoholic beverages strategy.
CCA revealed last month that earnings from alcoholic beverages fell in the June half - despite CCA's return to the beer market in December - because of weaker sales of dark spirits and slower-than-expected beer and cider sales.
Analysts say CCA and Beam took a ready-to-drink Jim Beam six-pack from the market in an attempt to force customers to trade up to an eight-pack. Instead, they traded down to a four-pack, crunching sales. The strategy has since been reversed and sales of Jim Beam RTDs are now recovering .
The alcoholic beverages unit was originally forecast to contribute 1 per cent of CCA's profit growth this year. However, CCA now expects that full-year earnings in alcoholic beverages will decline. Continued weakness in the dark spirits category is expected to be partially offset by higher sales from CCA's Fijian beer business.
CCA's new chief executive, Alison Watkins, has reaffirmed CCA's commitment to the beer and spirits business and has no plans to exit alcoholic beverages as part of a strategic review which kicked off in March.
Under an organisational restructure in March, the beer and spirits business now reports directly to Ms Watkins.
The former GrainCorp chief told The Australian Financial Review in August that alcoholic beverages had not delivered to CCA's expectations, but there was scope for CCA to take better advantage of its non-alcoholic and alcoholic beverages portfolio to sell a wider range of drinks in more channels.
"The opportunity with alcohol is to use the strength of that portfolio to offer our customers in licensed channels, on-premise and bottle shops a very broad portfolio encompassing non-alcoholic and alcoholic beverages," she said.
"We have some great success stories where we can build on relationships and bring a strong portfolio to provide them with beers on tap, ciders, bottled beer, coffee etc," she said.
"That allows us to satisfy more (consumption) occasions and grow into those channels."
CCA and its beer partner, Casella Wines, have a portfolio of around 12 beer and cider brands including Coors, Blue Moon and Samuel Adams from the US, Vonu from Fiji, locally made Ale House and Arvo beer and Pressmans and Rekorderlig ciders. Coors, Blue Moon and Samuel Adams finally secured listing in Woolworths Dan Murphy's and BWS stores last month.
Analysts say CCA needs to secure major brands to generate meaningful earnings from alcoholic beverages. CCA has been seeking to snare distribution rights for brews such as Corona, Heineken, Stella Artois and Budweiser, currently distributed by Lion, Foster's and Coopers.Analysts are also wondering how Suntory's $16 billion acquisition of Beam last year will affect CCA's 10-year spirits joint venture with Beam, which generates sales around $300 million.
Beam Suntory has reiterated its commitment. However, the spirits house is now running two separate distribution operations in Australia. Analysts believe Suntory may take back control of Beam's distribution or CCA/Beam could take over Suntory's distribution.
