Brand Owners Increasingly Include Alcohol In Their Lifestyle Positioning
Brewery Ommegang, a self-described upstate New York “farmstead brewery specializing in the production of craft Belgian-style beer,” is gearing up for the September 28 release of The Mother of Dragons Smoked Porter – the latest addition to a string of more than 10 Game of Thrones beers since the brewery took a license from HBO in 2013. (Another is to be released before the end of the year.)
By most accounts, Ommegang’s continued, unanticipated success with the Game of Thrones license (HBO’s Jeff Peters says the network only anticipated a single beer at the beginning of the deal) is the most noteworthy alcohol-based effort for an entertainment property in memory. It might be said to fit seamlessly into an ongoing Game of Thrones “lifestyle” – yes, we know it’s a fantasy –a goal to which many brand owners aspire.
Entertainment-licensed alcohol deals more typically are relatively short-term, one-shot affairs tied a property’s anniversary, rock band’s tour or new recording, or to draw attention to a new TV series. But with an explosion of small-batch capacity among beer, wine makers and distilleries – for example, the nation was home to 6,655 craft breweries as of June, up from 5,562 last year and 200 thirty years ago, according to the Brewers Association – opportunities are there for ongoing programs that aren’t on the scale of a big national brand. Even as the number of craft breweries jumped 20 percent during the year, volume growth is slowing; volume of craft beers increased 5% in 2017, down from a 6% rise the previous year and 18% in 2014, according to the Brewers Association.
Craft brewers once showed scant interest in inbound licensing, but many now view it as a means to raise their profile and help generate the revenue needed to maintain their own brands, says Brendan Palfreyman, a partner at Harris Beach, a law firm that specializes in brewery trademarks. He also points out that brewers see a license as a gateway for consumers to their other beers.
Increasingly, alcohol is being included as a lifestyle element in licensing programs. CBS Consumer Products started its Star Trek program in core categories such as apparel and collectibles. As it extended to the home, and more specifically barware, alcohol was a natural addition, says CBS’ Veronica Hart. CBS has longer term deals with Schmaltz Brewing (beer) and, more recently, Silver Screen Bottling Co. (vodka, bourbon).
“I think in general the lifestyle trend is strong right now; it’s a little less about a character on a shirt and more about an immersive experience, and alcohol as part of a lifestyle is becoming a broad part of our business, says Hart.
It’s not just entertainment properties. Delta Apparel, whose Salt Life brand has primarily existed in apparel and accessories, recently launched a 60%-owned joint venture with Ancient City Brewing to produce a lager beer that has gained distribution through 2,000 stores in Florida, where the brand has high name recognition, CEO Bob Humphreys said. To insure the beer
met the positioning sought for Salt Life, it formed the joint venture –- Salt Life LLC — with Richard Thompson, one of the brand’s founders who sold it to Delta in 2013. Delta is targeting beer to account for in the “high single-digit” percentage of Salt Life revenue in 2019.
“We will have to see if people are buying it as a novelty purchase or continue to buy it over time,” says Humphrey. “But we believe that this can be an important step for certifying Salt Life as a truly lifestyle brand that transcends any one product, whether it’s apparel, footwear, headwear, or, in this case, beer.”
HBO’s relationship with Brewery Ommegang grew out of the company’s search for a brewery with an old-world European style product that would fit with the TV series’ Medieval theme, says HBO’s Peters. While the original plan was for Ommegang to brew a single beer, that has since grown to a full range, with each keyed to the upcoming Game of Thrones series. Ommegang meets with HBO several months in advance of a new season to discuss themes around which the beer will be created, whether it is a particular story line, or a key ingredient to be used. The soon-to-be-released “Mother of Dragons” smoked porter is inspired by the Daenerys Targaryen character who controls dragons.
In a shorter-term alcohol play, HBO also licensed Diagio for a co-branded Johnny Walker/White Walker (White Walker is a GoT character) scotch whiskey that will be available in October for 3-6 months.
UK-based rock band Def Leppard and its licensing agent Epic Rights worked with Seattle-based Elysian Brewing Co. to develop a custom beer thatis being sold at stops on the Def Leppard U.S. tour and at 25 Rock and Brew restaurants of which Epic Rights Founder Dell Furano is part owner. It is planned to be extended to grocery stores in the fall.
The number of licensed alcohol deals is still small, but that is what drew newly formed Silver Screen Bottling to the market as it seeks deals across beer, wine, spirits and cigars, says CEO Brett Thomason. Silver Screen was formed as an off-shoot of Chronicle Collectibles and its investor Whitener Co. with plans to extend Chronicle’s licensing business into alcohol, says Thomason, who also is Whitener’s COO. Silver Screen wants to have 15 licensed products available by year-end and 120 within two-and-a-half years.
“We felt that all signs pointed to the end consumer who was more attuned to drinking things that they cared about and wanted to have a story around it,’ says Thomason. “The majority of people aren’t buying the same spirit over and over again any more. People are changing their drinking habits; they’re drinking less overall and they are choosing better quality products that mean something to them. For Star Trek fans, we want that James T. Kirk bourbon to be the bourbon that they drink.”
The deals come as promotion of packaged goods becomes less about marketing a specific product to a consumer and more about having its attributes and benefits become part of their conversation about their favorite things. In the case of Salt Life, the idea of being at beach and tying that to beer communicates a brand benefit.
Yet unlike a t-shirt that can be quickly created in an effort to be part of a trend or conversation, licensed alcohol can take time reach its audience. For beer, production lines need to be geared up. In its early days of producing Game of Thrones beer, Ommegang dedicated a large part of its manufacturing to the brew, something it can’t afford as easily now that it has established its own brands. And in the case of bourbon, which requires aging, producing a licensed brand requires more long-range planning than clear liquors, says Duane Stanford of industry publication Beverage Digest.
For example, Silver Screen works with a network of distillers in the Kentucky and Indiana to bring the James T. Kirk bourbon to market. In some cases, Silver Screen may use an existing batch at a distiller to produce its bourbon or rum (it is readying a Nuka dark rum that takes its name from the cola drink that is part of Bethesda Software’s upcoming “Fallout 76” videogame).
“Increasingly there is benefit both for the brewers, distillers and wineries and licensees,” says Thomason. The producers get “access to a fan base that they wouldn’t otherwise have” and it allows licensees “to move quickly and go out and get distribution much faster.”
Beverage Digest, Duane Stanford, Executive Editor, 404-444-1848,
Brewery Ommegang, Doug Campbell, Pres., 607-544-1800
CBS Consumer Products, Veronica Hart, 212-975-6894, firstname.lastname@example.org
Delta Apparel, Robert Humphreys, CEO, 864-232-5200
Epic Rights, Dell Furano, CEO, 310-424-1901, email@example.com
Harris Beach, Brendan Palfreyman, Partner, 315-214-2161, firstname.lastname@example.org
HBO, Jeff Peters, VP Licensing and Retail, 212-512-1000, email@example.com
Silver Screen Bottling Co., Brett Thomason, CEO, 706-483-8877, firstname.lastname@example.org