Beyond Eureka How ABSOLUT VODKA transformed the brand using Strategic Insights ?

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How ABSOLUT VODKA
transformed the brand
using Strategic Insights
Perchingtree Solutions Inc.
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Beyond Eureka

Strategic Insights
Case Studies
Absolute Vodka’s Search for Consumer Insights

Suggested Reading
The Difference between Instincts, Intuition and Insights What are Insights and why are they Rare and Elusive ?

Background – Absolut Vodka

Background – Absolut Vodka (1)
ABSOLUT is a Vodka brand produced near Ahus in Southern Sweden. It
is owned by the French Group of Companies Pernod Ricard who
bought it from the Swedish State in 2008 for € 5.63 Billion (€ 6.4
adjusted for inflation in 2016)

ABSOLUT was first sold under this name in 1879 in Sweden. In
the 15th Century Swedes distilled spirits under the name
"bränvin“ which was used for medicinal purposes. “branvin” is
another name for burnt wine.
Vodka emerged as a spirit during the 16th century and
became a national drink of the Swedes in the 17th Century.

• Lars Olsson Smith, born in 1836 in Sweden, also known as the “King of the Spirits” got employed at the age
of 8 years in a General Store and became a successful entrepreneur by the age of 14.
• By 1858, he owned a few distilleries and dished out tiodubblat renat ('ten times purified') alcohol. His
success led to closure of competitor distilleries giving him a monopoly in the segment.
• In 1879, Lars produced a vodka called "Absolut Rent Bränvin" (Absolute Pure Vodka) using advanced
rectification distilling process.

The Seal of Absolut Vodka
Today One can find Lars Olsson Smith’s image on the Seal of Absolute Vodka.
In 1913, Lars Olsson Smith died, but the Vodka business continued to operate

Background – Absolut Vodka (Contd)
• In 1970, the transformative moment occurred when Lars
Lindmark. President of V&S Vin & Sprit AB (The Swedish Wine
and Spirits Corporation) took over the Vodka business under
State Ownership.
• Exports of Vodka increased, but they wanted to create a new
innovative brand around the old Absolute Purified Vodka.
• Marketing Experts were hired with limited funds to rebrand
the Swedish Vodka into a global brand targeted towards the
US market. United States consumed 60% of the vodka, the
world produced and American brand experts were initially
hired.

Absolut Vodka- The Innovative Spark
The Swedes were not too happy with the branding ideas of the American Experts, so,
also had a Swedish marketing and branding firm work on the project.
The first innovative spark occurred when Gunnar Broman, an advertising person who
worked at the Swedish Company, Carlsson & Broman saw a medicine bottle in an
antique shop in Stockholm. This bottle design was used to sell Vodka as medicine in
earlier days.
The initial insight led to the baseline design of the ASBOLUT VODKA design.
Eventually, coloured lettering was added to make the design more attractive.

Absolut Vodka- The Medicine Bottle

Absolut: Biography of a Bottle
This book is the "official story" of how Absolut Vodka came to be. Carl Hamilton
found that publishing this book in Swedish would cost him his job at a prestigious
economics institute. When he published an expanded version of a research project
based on a research project commissioned by the liquor company, Vin and Spirit,
he lost his job at the Stockholm School of Economics. His book credits Absolut's
huge popularity to the "little guys" rather than to the suits at large ad agencies. This
book is the Liar's Poker of marketing, revealing the sordid stories behind the official
one. – Amazon.com
A book published by Carl Hamilton is a fascinating story of
the insightful brilliance about the Absolut advertising
campaign. The story sounds like the story of a rock band that
suddenly attracts a large following by unconsciously pursuing
the insights.
(Click to go to Amazon.com)

US Market Entry & Growth
At first, no one was sure that Swedish Vodka will
sell in the United States. In the first batch only
10,000 bottles were ordered, however within
few years, the brand reached $ 60 Million in
Sales due to the ingenuitiy of Michel Roux
Roux became instrumental in the development,
distribution and success of many foreign products in
the United States, including Stolichnaya Russian
Vodkas, Grand Marnier, Absolut Vodka, Bombay Gin
and Bombay Sapphire Gin, as well as many other
high-quality spirits, liqueurs and wines from around
the world. – Source – Biograpgy – Michel Roux

The journey till here was pursuing an indirect goal of
exporting ABSOLUT VODKA to the United States and
achieve a Product-Market Fit. The insights that
occurred were non-linear and led to the spectacular
success of the brand.
No hard analytics or big data was used to find these
insights.

Deliberate Search for Consumer Insights
ABSOLUT VODKA
Part II

Acquisition of Vin & Sprit
In March 2008, Pernod Ricard acquired Swedish
state firm Vin & Spirit, owner of ABSOLUT Vodka
for roughly $ 9 Billion. The acquisition led to a
deliberate strategy to capture more market share
in underserved wine and spirits segment.

ReD – Market Research Firm
ReD was hired a consultant to capture
consumer insights about how to capture
the home segment of wine and spirits
consumption with a special focus on
ABSOLUT VODKA.
ReD deployed Anthropologists to study
consumer behaviour during home
parties.

What is Ethnography
“Ethnography is a collection of the quantitative methods
used in the social sciences that focus on the close
observation of social practices and interactions.”

Absolute Vodka Ethnography Project
On a hot Austin summer night, few
natives got together for a evening
party. The couple organizing the party
was celebration their birthday with a
Spanish Theme Party
A 31 year old female ethnographer mixes with the crowd and takes
notes on social aspects of individual behaviour during such parties.

Ethnography Project
Well Framed Questions
• Huge Amount of Vodka being sold for home consumption, but, no clarity on how
it is being consumed – Parties, Individual Consumption, Gifts ?
• Is the spirit being consumer Undiluted or Adulterated ?
• Did Consumer like Pure Vodka or other variants of the Product ?
• What was the core motive behind throwing a party ?
• What are the key motivators that can help in increasing sales to this consumer
segment ?

Insights Captured
Insight 1 - What mattered most to the people were the narratives
that accompanied the drinks.
“They told anecdotes from their own lives in which a product
played a central role—humorous, self-deprecating stories about
first encountering a vodka, or discovering a liqueur while traveling
in Costa Rica or Mexico.” – Source – The Atlantic

Insights Captured
Insight 2 – A particular sub-segment in this party, the risk takers and explorers
identified more closely with the brand than others.
“The stories were a way to let people show humor, or to declare
that they’re, for instance, the kind of Austin lesbians who, upon
finding exotic elixirs in far-off lands, are brave enough to try them”
– Source – The Atlantic

Insights Captured
Insight 3 – The target segment was following a ritualized process of sharing
personal experiences while explaining their choice of gifts to the hosts
““One after another, you see the same thing. Someone comes with
a bottle. She gives it to the host, then the host puts it in the freezer
and listens to the story of where the bottle came from, and why it’s
important.”” – Source – The Atlantic

Insights Based Strategy
The ethnographic insights were
combined with predictive foresights to
create a brand
transformation strategy.

Brand Transformation Strategy # 1
The brand packaging needs to be transformed to reflect celebration,
joy and connection with personal narratives.

Make the bottle the Canvas for Creative Expression. Create Mental
Association of ABSOLUT VODKA with Parties, Music and Arts

Create an App allowing people to collaborate for party themes around
ABSOLUT VODKA. Create Drink Recipes to allow experimentation

ABSOLUT VODKA
The Transformation using Soft Insights
The brand transformation
occurred through soft insights
combining them with Intuitive
Predictive Foresights. Hard
Analytics and Big Data played no
role in the brand transformation
of this iconic brand.

Insights are Rare and Unique to
an individual or a group.
If everyone has the same “Insight”, is it not Insight, but
rather data or information. True Insights always follow
the VARIC Framework. – Perchingtree Solutions Inc.

References
Absolute Vodka’s Search for Strategic Insights – Strategic Coach
Anthropology Inc – The Article from Atlantic
The Difference between Instincts, Intuition and Insights
What are Insights and why are they Rare and Elusive ?
Lars Olsson Smith – “The King of Spirits”
Lars Lindmark – The Transformative Force behind ABSOLUT VODKA
The Swedish Medicine Bottle becomes the New Design for ASBOLUT VODKA
Research in Action – ABSOLUT VODKA - ReD Research
Perchingtree Solutions Inc.

Beyond Eureka How ABSOLUT VODKA transformed the brand using Strategic Insights ?

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