Southern Comfort, long considered by Brown-Forman to be an underperformer, was purchased by Sazerac earlier this year along with Tuaca for $543.5 million.
Despite the price tag, Sazerac president and CEO Mark Brown believes he got a deal.
“I look at it, from where I’ve been around the world, as an iconic American brand,” Brown said.
For years, Brown-Forman blamed the competitive flavored-whiskey category, led by Sazerac’s Fireball, for hurting Southern Comfort sales.
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But Brown doesn’t think that was the case. Instead, he has plans for Southern Comfort that make Fireball look like a sparkler.
Southern Comfort was selling about 2 million cases globally, Brown said. “Our goal is to figure out how to get it to 10 (million cases) … I think 10 is a very doable number. It may take us 15, 20 years to get there.”
Sazerac won’t say officially how many cases of Fireball were sold in the last year, but the latest estimate from industry insider Shanken Daily News puts it at about 4.5 million.
Brown’s history with Southern Comfort goes back to his youth at The Plough in Coldharbour in Surrey, England. “My parents had a pub. My job was to fill the shelves when I was 14, and Southern Comfort was in the pub,” Brown said. “I remember it. It was very popular. I used to drink it, when I turned 18.”
From 1994 to 1997, Brown worked at Brown-Forman, where his group helped to establish Jack Daniel’s Tennessee Whiskey and Southern Comfort in emerging markets.
“I loved the brand then. It was a great brand,” he said. “I think if I hadn’t had those two experiences with the brand, it would have been less likely that we would have gone after it as an acquisition. The inside knowledge of the brand really helped us in the run-up to the acquisition.”
Another factor: the shared link to New Orleans. Both Southern Comfort and the Sazerac cocktail trace their roots to M.W. Heron in the late 1800s.
While the past might have brought the two together now, the future and where the brand might go is clearly the appeal. Already Southern Comfort is in 100 countries, Brown said. Compare that to the rest of Sazerac’s portfolio, which has almost no overseas penetration.
“It’s literally all over the place,” he said. “It’s got tremendous brand awareness. It’s got higher brand awareness than Fireball. … Very few consumers in our alcohol space have not heard of Southern Comfort.
Southern Comfort gives Sazerac a seat at the global table. With a $200 million expansion underway, the Frankfort distillery Buffalo Trace will have much more whiskey to ship to thirsty overseas customers in the next decade. And Southern Comfort will give them a network to market it.
“It affords us the opportunity because we’re now doing business in all of these countries,” Brown said. “I don’t think we see it as something we’re going to piggy-back on. But it gives us a large enough customer base where we have a ready-made distribution system and, quite frankly the logistics to get the product there now.”
Now Sazerac is planning how best to reposition Southern Comfort.
“We will do more marketing and effort and energy around the whiskey side of it,” Brown said.
The formula won’t change, but there will be new expressions coming out.
“We’re actively working on at least two or three. I don’t think flavors is where we will go. If you think about Southern Comfort today, you’ve got Cherry and Caramel … I think over time those will disappear on their own,” Brown said. “I don’t think it’s really where we want to take the brand. I think we want to take it back to the core roots.”
Such as the 100-proof version of Southern Comfort.
“That 100-proof is very popular. In fact, there are some states where the 100-proof outsells the original (70-proof),” Brown said.
The new expressions are likely to be variations on whiskey, he said.
“You could do a rye,” Brown said. “Something that’s much more in core whiskey space, which we’re enormously excited about.”
The makeover will begin with packaging, which will roll out in early 2017, he said. He wouldn’t tip his hand on what is coming, although he hinted they might bring back the “jigger” cap.
“I don’t want to rush it. I want to do it for the last time,” Brown said.
By the end of the year, Sazerac will take over production of Southern Comfort, including the bottling which will likely be done at a plant in Western Kentucky, in Canada and in Europe.
Sazerac will move away from the oddball ads that characterized Southern Comfort’s marketing in the last few years, such as the 2012 Beach ad that kicked off the “Whatever’s Comfortable” campaign.
“There were some campaigns that you wondered if they were just trying to be different,” Brown said. “And I’m not a believer in taking a brand and doing something just to be different..”
The images he plans to play up: iconic American brand, strong ties to New Orleans and whiskey associations.
Brown said Sazerac plans to develop a global position for Southern Comfort and reveal it slowly. “I don’t think there’s going to be a big bang … if you think about Fireball, we’d been working on that for 14 years before it really clicked,” he said.
The campaign will likely be social media-heavy, along the lines of Fireball’s online presence, with “a renewed emphasis in the on-premise accounts,” meaning in bars working through bartenders, emphasizing straight consumption as well mixability in cocktails.
Outside the U.S., the ready-to-drink market for Southern Comfort cocktails is big, particularly in South Africa and Australia. But that probably isn’t likely to happen in the U.S. because the tax structure favors malt beverages. Other strong markets include the United Kingdom and Germany.
He also plans to delve into the extensive and well-maintained Southern Comfort history for future inspiration.
“We think in the archives there are a lot of clues that one would apply for future success,” he said. “The product itself is great. And I think there are some things that you could do with a new expression that would be very appealing. … There’s a wealth of recipes in there. I’ve tasted some of them and they’re pretty good.”
What about the name? Will they stick with Southern Comfort or go with the more trendy SoCo?
“We’ll let the consumer decide what they want to call it. We won’t be pushing it one way or the other,” Brown said.