Premium Innovation

There is a friendly rivalry in the New Product Development (NPD) department at BACARDI about which is more important when creating a new product - the package or what's inside the package. In true collaborative spirit, however, the conclusion -- as quoted by the head of liquid development -- is this: packaging sells the first case and liquid sells the "millions" of cases after that. As they first approach innovation, Yousef Zaatar, vice president packaging, Bacardi Global Packaging - Americas, says, "We start by looking at what is already available in the market because innovation is not simply a 'me too' concept. True innovation creates a need for the consumer."

 

And today's consumer, Zaatar points out, is extremely intelligent and has a lot of resources. "You cannot give them a gimmicky product and tell them it is innovative - it has to actually be innovative. Essentially, you are giving consumers something they doesn't even know they want," he says.

 

Of course, this is easier said than done, but it begins with the idea and BACARDI practices open innovation. The "creative" part of the NPD team works with agencies, consultants, consumers, focus groups and so on to come up with ideas.BACARDI also believes that its suppliers play a partnership role, often acting as sources for innovation.

 

Once a charter is developed, the "marketeers" from each side of the business present it to NPD and a committee made up of representatives from marketing, packaging development, liquid development, project coordination and operation for approval. Zaatar notes, "There is a lot of passion behind the ideas and thus, it is not always easy to agree; especially because, often, innovative ideas are complex. Many factors have to be considered and much research has to be conducted before deciding if an idea is viable."

 

On top of the complexity, the very nature of BACARDI's product creates difficulties. Zaatar explains, "The greatest challenge we face around innovation is meeting the consumer's expectations while satisfying the legal requirement. For example, we cannot create a category of products without government approval; we cannot even manipulate a product without government approval. Rum has a definition for rum; tequila has a definition for tequila and everything must comply with regulations."

 

In addition, there are compliance issues around packaging. For instance, in the United States, BACARDI, as well as the rest of the liquor industry, cannot sell 700 mL bottles; they must be 750 mL - 1.75 mL is the biggest size for liquor bottles. Wine and beer are different. Zaatar says, technically speaking, it is easier to innovate with smaller sizes. "In categories that are not so heavily regulated, you can play with sizes and innovate easily with packaging to maximize your profit or to build your business," he points out.

 

As you would expect, BACARDI has a lot of processes around innovation, and many departments and functions that tie into them. Zaatar explains, "We wanted a system with easy access to tie this all together, where ideas and information are consolidated and communication is facilitated."

 

A central system prevents a duplication of efforts, enables awareness of project status and ensures forward movement. Zaatar says they chose a web-based "robust" Paxonix solution to meet their needs.

 

Currently in the implementation phase, a September launch is anticipated. As a result, BACARDI expects better collaboration and improved information sharing where dissemination will take place in a systematic manner. The solution will help streamline and hasten development and speed to market. Most importantly, Zaatar says, it will enable BACARDI to "get it right the first time." Although he admits this seems obvious, companies often go to market before all aspects of a product are where they should be.

 

As consumers continue to demand a higher level of product, BACARDI is poised to continue to innovate and meet this need. Zaatar says, "Since 1862 we have been focused on premium and super premium products. Our vision and resources remain dedicated to this."

 

One historic innovation is the creation of flavored rums. "It is easy to think about flavored products now, but at the time this was very revolutionary," Zaatar says. He notes that the rum industry is conservative, and as mentioned, very restricted. The source of rum is regulated -- it must come from sugar cane or its derivatives -- unlike, for example vodka, whose source can be a variety or ingredients. Therefore, creating flavors was ground breaking.

 

More recently, BACARDI worked with CAZADORES, one of the BACARDI LIMITED brands, and with BACARDI U.S.A., to create the package for the tequila brand CORZO (www.corzo.com), which Zaatar calls "one of the most challenging packages on the market" because the neck of the bottle is not in the middle of the bottle.

 

Another breakthrough, Rubi Rey Reserve Rum (www.rubirum.com) is the first single barrel finished white rum - super premium rum is usually dark. Zaatar says, "Rubi Rey is innovative in packaging and flavor, and in the technology that is used to make it."