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The Cocktail Creationist

“Nietzsche explains that human beings are looking for the ‘why’ in their lives,” says Wright. “Here at Liquid Intelligence, we refer to this ‘why’ as ‘the Great Story.’ The Great Story must be enticing, memorable, easily repeatable, and about what you want your brand to be about.”

For Grey Goose, the brand was about unrivaled quality. Grey Goose’s Great Story hinged on the following key points: It comes from France, where all the best luxury products come from. It’s not another rough-hewn Russian vodka—it’s a masterpiece crafted by French vodka artisans.

It uses water from pristine French springs, filtered through Champagne limestone.

It’s got a distinctive, carefully designed bottle, with smoked glass and a silhouette of flying geese. It looks fantastic up behind the bar, the way it catches the light (and Frank made sure to give the bars big, 1.75-liter bottles, to grab attention). It sure looks expensive.

It was shipped in wood crates, like a fine wine, not in cardboard boxes like Joe Schmo’s vodka. This catches the bartender’s eye and reinforces the aura of quality. Never forget the influence of the bartender.

It was named the best-tasting vodka in the world by the Beverage Testing Institute in 1998. (Granted, this pronouncement can and will be doubted. But it was nonetheless touted relentlessly in a series of Wall Street Journal ads.)

And now the most important piece of the story—the twist that brings it all together: Grey Goose costs way more than other vodkas. Waaaaaaay more. So it must be the best.

Pause for a reality assessment: Certainly, Grey Goose is a very good vodka. But is it really “the best”? Pace the Beverage Testing Institute, I’d venture that the answer is, ehhhhh, maybe. Of course, when I suggest to an SFIC vice-president that vodka is by definition odorless and tasteless, and thus one vodka couldn’t be much better than the next, his face goes tight. “That is a dinosaur statement,” he says, speaking slowly, then lectures me on water- filtration processes and Champagne limestone and special grains and such.

“Yes, some people may taste a difference,” says Wright of Liquid Intelligence. “But you’re talking about a grain-neutral spirit. The FDA definition is pretty narrow. At an elemental level, there is no difference. And anyway, you can’t possibly taste it when it’s in a Cosmopolitan. Grey Goose is about quality because Sidney Frank said it was about quality.”

And said it to the right people. Those ads were placed in the Wall Street Journal, not Newsday. Even more important to the campaign was event marketing—getting Grey Goose into the hottest clubs on the hottest nights, in the hands of the hottest people. “You need to influence the influencers,” says Wright. These are the obsessive arbiters of taste who like to tell their friends what to buy. When they have a Great Story to tell, they’ll tell it convincingly and often. In the classic flowchart, Influencers talk to Early Adopters (“Want to be cool but don’t have the time,” as Wright describes them), who talk to the Early Majority (“Suburbs”), who talk to the Late Majority (“Middle America”), who talk to the Laggards (“Just now buying a CD player”).

As the Influencers peddled the Grey Goose tale far and wide and people began to call for it in bars, a great thing happened—the characters on Sex and the City pointedly called for Grey Goose Cosmos. In the battle for vodka supremacy, this was the atom bomb. The war was over. Grey Goose had won.

Though Grey Goose is a product of Sidney Frank, spirits savant, it’s also a product of its age. We live in an era of luxury. The word luxury—in this context—refers not to our standard of living but rather to a highly successful sales concept.

Luxury, in a consumer sense, means spending much more than you have to. Your reason for doing this could be that you demand the absolute highest quality, because you can genuinely tell the difference. As Cornell economics professor Robert H. Frank (no relation to Sidney) points out, “You can buy a car that does zero to 60 in 3.9 seconds. Or you can spend $445,000 to buy a Porsche that does zero to 60 in 3.7 seconds. It’s a real difference, and some people will pay for it.”

But small quality differences like this are not why most people buy a luxury product. Frank, author of the book Luxury Fever, observes that the thirst for luxury trickles down to those who can’t really afford it. Frank calls this the “expenditure cascade.” We all spend more in an effort to keep up with the guy who’s one rung above us. This means we buy bigger houses to keep up with the neighbor’s mansion. It also means we buy superpremium vodkas, to keep up with the guy who’s next to us at the bar.

This is what SFIC is banking on. The company’s decided its interests lie solely in the superpremium categories—where margins are higher and volumes lower. (Even Jagermeister is technically superpremium, despite its blue-collar image. It’s priced above its competitors in the liqueurs category, such as Bailey’s and Kahlua.)

But SFIC will never again have the niche to itself. These days, every spirits marketer is diving headfirst into superpremiums. Absolut just launched Level, a new superpremium vodka, only to see the simultaneous launch of Stolichnaya Elit (which will sell for a dizzying $60 a bottle). You might wonder where the price escalation will stop or if it will stop at all. People don’t seem to blink at paying high prices for a cocktail in a bar (as opposed to in the liquor store, where they tend to be more price-conscious). As long as your high-end brand has a credible story behind it, you can keep hiking its margins, and consumers will follow. The trend is known in the industry as “trading up.”

“Consumers are drinking less, but drinking better,” says Michael J. Branca, a beverage-industry analyst at Lehman Brothers. The evidence is that volume sales of spirits have been flat, while dollar revenues have soared. According to Branca, this stems from a worldwide trend toward health and wellness, as well as a growing consumer demand for “everyday luxuries,” which includes things like Starbucks Frappuccinos.