Dry Crusaders

Image result for prohibition

January 16th 1920, 100 years ago today, was the last day on which you could legally get an alcoholic drink in the USA for 13 years.  Prohibition was enacted and America went dry….. dry-ish.

As we now know prohibition serves as a signal example of why you don’t ban things.  Alcohol production, distribution and sale was taken over by newly created organised criminal gangs.  Fortunes were made by criminals.  And yet we continue to ban drugs, wage war on them and treat drug addicts as criminals instead of a healthcare issue.  Can we not learn from prohibition and decriminalise drugs?

What is little known is that prohibition was successful because of World War 1.  With the USA participating in the final stages of the war Germany became the enemy.  Most of the breweries in the USA were run by German-Americans.  Before the war they were well regarded and well funded to defend the rights of access to alcohol.  By the end of the war it was not popularly acceptable to side with “the enemy” and the brewers lost much of their political clout.  This gave the temperance movements sufficient weight to push the dry agenda all the way into the constitution and make it a federal issue.

 

The Workmans Friend; by Flann O’Brien

When things go wrong and will not come right
though you do the best you can,
when life looks black as the hour of night
a pint of plain is your only man.

When money’s tight and hard to get
and your horse has also ran,
when all you have is a heap of debt
a pint of plain is your only man.

When health is bad and your heart feels strange
and your face is pale and wan,
when doctors say you need a change
a pint of plain is your only man.

When food is scarce and your larder bare
and no rashers grease your pan,
when hunger grows as your meals are rare
a pint of plain is your only man.

In time of trouble and lousey strife
you have still got a darling plan,
you still can turn to a brighter life
a pint of plain is your only man.

Strange Facts About Americans During Prohibition

Nanny State

The Irish Government signed off on two pieces of legislation this week.

One restricts selling of low cost alcohol, effectively setting an artificial floor price for the market.  It also imposed restrictions on communication and advertising of alcohol.

The other imposes a requirement to print the calorie count of dishes on menus.

Both of these measures are well intentioned.  There is no doubt that alcohol abuse causes many problems and that the nation is struggling with obesity.  But I find this kind of nanny state legislation offensive.  If you treat the population like children they will behave like children.  Tell them “do this” and “don’t do that” and control all aspects of their lives and people will stop behaving as adults.  They stop making decisions based on responsible consideration.  They either comply, or frequently they rebel against the strictures.

I am not an alcoholic.  Why should I be ruled by legislation designed to counter abuse of alcohol?

I am not obese.  I know how to lose weight.  Eat less, exercise more!

It is not the food I eat in restaurants that will make me obese (I don’t eat out often enough) it is what  eat at home.

The idea of putting labels on food came funnily enough from Kellogg’s.  They started out as a healthy food company.  They wanted their customers to be able to make informed, healthy food choices.  So they put nutrition information on packets as a way to educate and inform customers.

Governments have taken to this idea and now use food labeling as a blunt instrument to prove that they are doing something about the obesity crisis.  The truth is that the “cure” for obesity is political suicide.  The population of Britain were at their healthiest in the early 1950’s after 10 years of food rationing and a government controlled nutrition plan.  No modern government has the permission to take such drastic steps to improve the nations health.  Any government imposing rationing would lose every seat they hold in the next general election, and they know it.

So they pass measures that represent no more than lip service.  Measures that cause pain to restaurateurs and guilt to diners.

Meanwhile the nanny brigade retire to their joyless den of asceticism and dream up the next plan of action to inflict order upon the fun loving masses.  They will never be happy, never be satisfied, never be content.  For God’s sake stop feeding them!

o

A stone in my shoe; by Donal Clancy

 o

It slipped into my shoe, down the outside of my foot.

It rattled around for a while, seeking somewhere to settle.

An annoyance, sharp, awkward, intrusive.

 o

I left it there and continued to walk.

It wiggled and jiggled with every step.

It hurt when I stepped on it.

 o

After a while it stopped moving.

It found some depression in the leather sole

and nestled into the base of my foot.

 o

So we travelled together for a time,

getting used to each other

until I quite forgot the stone was there.

 o

Next morning I put on my shoes.

The stone was gone.

All day my foot felt the void.

 o

This is no moral tale or fable

No lesson on friendship or love

It was just a stone in my shoe.

When Markets go Dark

Darkside

Traditional marketing theory holds that there are three broad strategies for positioning a product.  You can be the best, you can be the cheapest, or you can serve a specific niche.

It is most simple to communicate that you are the best or the cheapest.  It is more difficult to communicate niche benefits.  One great boon of the arrival of the internet was to support niche communications.  Using the internet you can target communications at tiny market segments and still succeed.  As a result we get the “long tailed comet” and the weakening of mass market simplification.  We don’t all have to settle for a white sliced loaf simply because it serves the broadest audience.  You can get your loaf of yeast free pumpkin seed bread made with stone ground flour from a mill operated by orphan refugees.

What is interesting about Dark Markets is that this niche power is removed.  Tobacco is the most dark market we have.  Some nations are very dark, Australia, Canada, Ireland and England seem to be in a competition to win the race to be the darkest tobacco market.  In Ireland the product is no longer visible in-store.  The packs are hidden behind closed doors, and no advertising, promotion or communication of any sort is permitted to the end consumer – other than the price list.

Absent any communication it is impossible to convey the benefits of niche products.  As a result people select using simplified heuristics.  They can see the price.  So it is either high price or low price.  Highest price must be the most premium product and lowest price is assumed to be best value.  Consumers assume that lower price products will be of inferior quality, and in the case of tobacco they will be less “healthy” than the premium price products.  It is interesting that the biggest markets for low price brands, and for counterfeit brands, are in the “full strength” tobacco products.

Profit margins on low price products are derisory.  It is in the interest of the manufacturers to keep as much of the business as possible up at the premium end.

So what?

Other markets are going dark.  Pharmaceuticals are partially there, Alcohol is being targeted, Baby Milk Formula, Childrens Cereals.  Many products run the risk of following tobacco down the path to the dark side.  What lessons can you learn from Tobacco?

1.  Stop fighting for share.

If you treat a dark market the way you treat an overt market, and fight for market share, you will lead a race to the bottom on price, and drive value out of the market.  The major players in the market have to move away from using share points to reward sales teams.  Focus on profitability measures.

2.  Build premium positions.

Forget the middle market.  Devote your resources now to building strong premium positions that are simple, clear and relevant in the minds of your consumers.  Don’t waste money building brand positions for marginally profitable lines.  Be patient!  Take your time to build your premium position.  You will come under relentless pressure from sales to use sales promotions and discounts to push share.  You have to fight that.  A premium brand should never be on sale.

3.  Cheap must have a compromise.

If one player is building a fighter/Tiger brand, you need to communicate to your consumers why Premium is different to Value.  Why is cheap also nasty?  You must convey this effectively before the market goes dark, or the consumer will simply buy on price.  But you also need to be careful not to damage the category.  If cheap vodka is bad for your health, it must also be clear that premium vodka is at least health neutral (ceteris paribus)

4.  Motivate stakeholders early.

Get the retailers to buy in on premium.  Make sure they understand that it is about CASH margin, not percentage margin.  So what if you get 15% on a $10 bottle of Vladiawfull vodka.  It is far better to get a tight margin on a €60 bottle of Grey Goose.  Also, get them to fight for light.  Make it clear to them what the negative impact of a dark market means to their business.  Organise them into lobby groups.  Help them to advocate their positions with  grass roots political representatives.

5.  Build a network of ambassadors.

Find the people who like your product now and recruit them for the long haul.  Not barmen or shop staff.  They have to have longevity, so they need to be business owners.  Get long term buy in for your brands now, and it will pay back handsomely when the market goes dark.  Bring these people together, make a community where they can help each other and help your brands.  The market may be dark, but you can have online buzz as members plan their next outing of the eg John Player Amateur Golf Classic.