Kool-Aid, tequila maker Sauza push for consumption beyond summer

Two beverages among the most likely to be sipped at a beach or summer barbecue — margaritas and Kool-Aid — are working hard to stay in the mix this holiday season.

Sauza, owned by Beam Global Spirits & Wine, a unit of Fortune Brands Inc., is teaching women how to make winter margaritas. Kool-Aid, owned by Kraft Foods Inc., made its first appearance in Macy’s Thanksgiving Day Parade, with its Kool-Aid Man on a skateboard.

Sauza is looking to benefit from a trend toward entertaining at home. The majority of liquor consumption takes place outside of bars and restaurants, according to the Distilled Spirits Council of the United States. And with that industry facing tougher times because consumers have pulled back, the at-home entertainer has become even more important. Now Sauza is asking its customers to consider wintertime versions of the concoction.

Kool-Aid, on the other hand, has suffered slipping sales this year along with the rest of the nonalcoholic beverage business. Kraft is looking to extend Kool-Aid’s prime selling season, spring and summer, by focusing on family connections, and pitching its product as a holiday drink.

“If you’re just relevant in summer, that’s just three months out of the year, and that’s pretty stupid,” said Elana Gold, a partner at EffectiveBrands, a global marketing firm. “Not only do you have a potential for erosion in sales come summer, but it becomes a heck of a lot more expensive to be restored in the consumer’s mind.”

Executives at Sauza know that the bulk of consumption of its tequila products stems from margarita drinking. Margaritas are prepared at home more frequently than they’re consumed at bars, and about 75% of margarita drinkers are women. But the company has generally seen its season as May to September, with a bump in December.

“There’s a ton of different types of margaritas and there’s a lot that were designed with flavors that feel more fall or winter,” said Gary Ross, an associate brand manager for Sauza. Would-be margarita drinkers holding holiday parties aren’t familiar with alternate versions, he said, and many are intimidated by any kind of margarita making.

To that end, Sauza has partnered with Marcela Valladolid, host of Food Network’s “Mexican Made Easy,” for events in New York, Chicago and Los Angeles to introduce winter margaritas and a variety of recipes for holiday entertaining, such as tequila-infused turkey and bananas foster flambe. Sauza holds the events at private homes and invites area mommy bloggers who also like to entertain in the hope that they’ll write about the experience.

Valladolid’s “warm winter margarita” is made by simmering apple juice with a cinnamon stick for ten minutes, then mixing it with sugar, tequila and dried fruit.

In 2009, liquor lost market share for the first time in at least a decade — down 0.2% to 32.9% of total alcohol consumption on a dollar basis. Sales at restaurants and bars, which account for 25% of consumption, also declined. Consumption at home was the reason the industry was able to eke out an overall sales gain.

Sales trends for the last 52 weeks show continuing challenges in the market, with many major brands posting declines. Tequila sales, however, are up 3% to $258 million for the year that ended Oct. 31, according to SymphonyIRI, a market research firm. SymphonyIRI data does not include sales at Wal-Mart and club stores. Sauza has outperformed the category, with sales up 11% to $43 million. Sales for market leader Jose Cuervo are down 4% to $95 million.

Kool-Aid is in a different position. Sales for the 52 weeks that ended Oct. 3 declined 3% to $131 million, according to SymphonyIRI. It may be particularly disappointing on the heels of an impressive 2009, when sales increased 4.4% to $136 million.

Kool-Aid appeared to score points with moms last year, thanks to an advertising campaign that underscored its differences from soda: lower price and less sugar. Kool-Aid’s senior brand manager, Sivonne Davis Sr., said the company is looking to build sales beyond its summer surge, and to do that it is focusing on family occasions such as the holidays.

“Obviously, Kool-Aid is top of mind in the warmer time periods, but in colder times, it’s not so top of mind,” she said. The company has traditionally focused its marketing dollars on the summer, but has extended the usual budget into the winter.

As part of the shift, the company decided to sponsor the Macy’s Thanksgiving Day Parade, a three-year commitment.

Gold of EffectiveBrands said that Sauza and Kool-Aid wouldn’t be the first brands to extend their business into additional seasons. She pointed to Ben & Jerry’s role in transforming ice cream from a summer treat for kids into a year-round dessert for everyone.

“They were just a very small brand and they really tapped into the hearts and minds of the consumer,” she said. “Adults love ice cream, but they have more sophisticated tastes.” She pointed to waffle cones as a crucial differentiating factor at the time. The scent of waffles had cold weather associations, and it helped lure customers into stores.

With that success in mind, Gold said that Kool-Aid, which enjoys broad awareness, has “more right to succeed and expand than even Ben & Jerry’s.”

Ice cream, at the time, “was in a very crowded market” but the chain “did something unique and maybe more observant about their target consumer, and really understood their needs so they were able to be more successful.”

eyork@tribune.com