Spirits and fashion have a lot in common.
According to Stephen Rust, president of the Catalyst Division of Diageo North America, both industries essentially focus on the same things in brand building and positioning. That focus is on style and substance, or, put another way, authenticity and craftsmanship.
Rust told attendees that Ketel One vodka was the one brand Diageo had long “coveted” for its brand portfolio. That’s because Diageo was trying to put together a strategy in the U.S. for competing with Grey Goose, which had been successful in incorporating fashion in some way in its campaigns. Diageo had the ultrapremium market covered when Sean “Diddy” Combs became the ambassador for Cîroc but then had to figure out how to compete with Absolut, which does about 5 million cases globally. What Diageo needed was a superpremium vodka.
Enter Ketel One, a 300-year-old brand in the Netherlands that’s been in the Nolet family for 11 generations. While the family didn’t want to sell the brand, it did want to partner with someone to carry on the family traditions. After some discussions, the Nolet Group and Diageo agreed to a joint venture in perpetuity to form Ketel One Worldwide BV. The deal was struck in 2008, with Diageo paying $900 million for a 50 percent stake.
Rust noted that the family built the brand to 1 million cases without ever spending on advertising. Post the joint venture agreement, the brand’s volume is now closer to 3 million cases, with a goal of reaching at least 5 million.
While the venture has honed in on the relationship between Ketel One and men, young men in particular, Rust said he’s also had to take into account the shifts occurring in the U.S., including a generational one.
“Ten years ago, there were 200,000 young men turning 21, and 135,000 were probably white males. Fast forward 10 years and about 65,000 are white males. America has shifted. There are a lot of reasons. I think about the 21-year-old and how do I begin my journey with them,” he said.
Rust said Ketel One still does traditional partnerships such as in golf, but now it also looks at the Gay & Lesbian Alliance Against Defamation and BlackBook.
“We look at the brand through the eyes of how to tell our story in a compelling way so people understand our craftsmanship, our credibility, so people will grow and continue the journey with us,” he said.