Campari’s repositioning of its Aperol brand

September 9, 2013 6:19 pm

Campari’s repositioning of its Aperol brand

By Paolo Aversa

The story

In recent years, Italians have steadily reduced their spending on meals in restaurants, with a corresponding decrease in drinking spirits with their food. In addition, increasingly health-conscious Europeans were drinking less alcohol and doing so on fewer occasions. They were also interested in buying high-quality products generally.

The challenge

What sounds like good news for health indicators represented a threat to spirits producers, including Italy’s Gruppo Campari, one of the world’s leading makers of premium spirits. In 2005, 47 per cent of its sales were in Italy and 19 per cent were in Europe overall.The challenge was one that confronts many businesses in times of crisis: how to reverse a consumer trend that depends mainly on factors that are beyond a company’s direct control.

After 2008, the global financial crisis exacerbated the situation as Italians further reduced their spending on non-essential items, such as alcohol in general and spirits in particular.

The strategy

Campari had long realised that consumers wanted “lighter” drinks that fitted in with social experiences where little or no food is eaten, such as in bars or cafés. They were also interested in quality, including favouring the use of natural ingredients over artificial ones.

At the end of 2003 Campari had acquired the brand Aperol, an Italian light liqueur whose orange colour derives from an infusion of herbs and roots that had remained both secret and unchanged since 1919.

Mixed with prosecco, soda water and a slice of orange, Aperol is the main ingredient of the Spritz aperitif cocktail associated in northeast Italy with enjoyable get-togethers in a remnant of la dolce vita that has survived the austerity of recession.

Realising that its lower alcohol content and natural ingredients meant it would fit well with consumers’ new preferences, Campari decided to invest in promoting Aperol in Italy and internationally.

The company decided to export the idea of Aperol Spritz as the perfect drink foraperitivo occasions, the Italian tradition of light drinks and snacks before – or instead of – meals. When promoting the new drink, Campari focused its efforts on bars, wine bars and other places where dining is cheaper and faster than in formal restaurants.

Associating Aperol Spritz with the fun aperitivo time, especially among younger Italians, led to strong word-of-mouth publicity spreading among consumers.

The results

Sales of Aperol increased to four times pre-acquisition levels, reaching 11 per cent of Campari’s total sales of €1.3bn in 2012.

From 2004, the Aperol brand experienced seven years of double-digit growth, reaching more than 40 per cent in 2009 after the financial crisis hit.

Aperol sales rose in Italy, where it became the best-selling spirit despite the economic downturn’s effects on demand.

The popularity of the aperitivo among young Italians caught on internationally, and the trend is still growing, while in the Veneto, home of Spritz, about 300,000 Aperol Spritzes are drunk every day. This equates to more than 200 a minute.

The lessons

During a crisis consumers do not disappear but they do change their requirements. Companies who identify such variations at an early stage are in a good position to seize the new business opportunities and enjoy first-mover advantage.

Second, innovating does not necessarily mean giving new products to current customers. It may be that the next big thing is already on the market and simply needs a new presentation to a new group of customers, in this case younger consumers.

Finally, quality on its own is usually not enough to win sales. Successful companies fascinate customers with new ways to enjoy their products. Experiences that involve enjoyable social interaction are a viable way to trigger word-of-mouth promotion, and widespread adoption.

The author is Marie Curie Research Fellow of Strategy at Cass Business School