Media & Marketing: The decision by C&C to sell its soft drinks and distribution activities to Britvic for €249 million means that two more iconic Irish brands are passing into overseas ownership.
C&C is passing on the rights in Ireland for Pepsi and 7Up, as well as its own brands, Club and Ballygowan.
Twenty years ago Ballygowan pioneered the market for bottled water in Ireland, and the product has gone from being a luxury item to a commodity purchase where price drives sales. Despite the competition, Ballygowan has retained its premier position, not least due to regular advertising shifts.
Sales of Ballygowan increased by 9 per cent during 2006 against market growth of 4 per cent. C&C hiked the profit margin in its soft drinks division by two points last year to 8.3 per cent by cutting back on marketing spend, which was reduced from 8.2 per cent of sales to 6.7 per cent. By contrast, C&C spends 9.3 per cent of revenues advertising its cider products, Bulmers and Magners.
There are three categories of water sales - bottled, bulk and office coolers - and there are 60 competing brands across those sectors. About 70 per cent of the water sold in Ireland is the bottled variety, with the balance divided between bulk containers and office dispensers. Ballygowan is the number-one seller in the shops, with a 27 per cent share by value. Tipperary Water is the bestseller in the office cooler and bulk water categories with its Crystal Springs brand.
It is worth recalling that Ballygowan was originally a mom-and-pop venture put together by fashion model Geoff Read. At its launch, Ballygowan's advertising budget was a meagre €16,000 and Read made the smart move of trusting the spend to top advertising agency, McConnells. Chairman John Fanning recalls that a "major debate" took place as to whether to capitalise on the brand's Irish origins. In the event the launch advertising centred on a sophisticated take on a popular restaurant review column. The idea was to match Perrier's image, and a real bonus for the start-up was that the campaign won €150,000 of free press advertising from the National Newspapers of Ireland.
In the mid-1990s the strategy was changed to an overtly Irish platform. The idea was to stem the tide of indigenous imitators, but by the end of the decade Fanning says a new threat emerged. A new generation of consumers began to regard the brand as more suitable for their parents' generation. "It was time for another change in direction and the advertising reverted back to its roots, with an ultra-sophisticated and suitably cool campaign based on dance and music," says Fanning.
The Tipperary brand is owned by entrepreneur Patrick Cooney, who runs the Gleeson Group. Cooney believes the market is far from saturated, pointing to the fact that bottled water consumption in Ireland is 30 litres per capita, compared with 100 litres in Germany and 120 litres in Italy. Of course, the weather is warmer on the Continent, but the way bugs are spreading through the Irish water system, Cooney can look forward to growth for his brand.
Own-labels sold by Dunnes Stores and Tesco have grown to 15 per cent of market share, but branding is still important. While Tipperary doesn't splurge on TV advertising to the same extent as Ballygowan, this year Cooney is investing millions in redesigning the packaging of Tipperary's entire range of water products.
Marketing awards
It's not quite the Oscars, but the Direct Marketing Awards 2007, sponsored by An Post, is an important event for mutual back-slapping in the direct marketing sector (see www.anpostdmawards.com).
The awards took place at the Shelbourne Hotel in Dublin last week. DMA, RMG Target and Tequila garnered the most gold gongs, with RMG Target named agency of the year.
Stratagem also picked up a couple a gold awards and the highlight of the evening was a video that had Stratagem boss Keith Lee acting as Hannibal Lecter in The Silence of the Lambs, while pontificating about integrated marketing. You can see it on YouTube: search under "Silence of the Critics".
Tonight it's the turn of the Marketing Institute awards, while the Chartered Institute of Marketing is calling for entries in 17 awards categories. For details, see www.cimireland.org.
TV3 show polls well
TV3's election offering, Polls Apart, has been performing creditably. According to Universal McCann, the Matt Cooper and Eddie Hobbs double act had an average 149,000 viewers last Monday.
Over on RTÉ the next night, Prime Timegarnered an average 304,000 viewers.
TV3 is so impressed with the pair that it may find a slot for them in the autumn schedule.
