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For one hundred years a version of Absolut vodka was produced and drunk in Sweden barely registering in the world beyond its homeland. Yet since going global in 1979, it has grown to become one of the biggest brands in the world, second only to Smirnoff in the
premium vodka market.
Its rise has been phenomenal and is largely due to a hugely successful advertising campaign, based on the simplicity of its name and distinctive bottle. Now, its owner, Vin & Sprit, is to be sold off by the Swedish Government for an estimated £3 billion ($8.5 billion) and drinks companies are clambering over themselves for the jewel in V&S' crown.
Advertising experts credit Absolut's success to its consistent advertising campaign which has ran on the same theme since its inception in 1979, making it one of the longest running ad campaigns in the world. Art work on the bottle by Andy Warhol assured it achieved iconic status.
Advertising expert David Wethey, of Agency Assessments International, said it is this clever advertising rather than anything particularly unique about the product that has driven growth of the brand.
"It is not an especially distinctive product," he says. "The marketing team hit upon a very clever and unusual form of advertising, which is a common theme that can be localised. It has translated brilliantly around the world.
"They are pioneers in the way they have taken a very big idea and let it rattle around in lots of different ways. Yet one of the reasons this model has not been repeated is that it requires an incredible amount of investment."
Yet Absolut has been linked with original marketing since it was first used to brand a vodka bottle nearly 130 years ago, by entrepreneur Lars Olsson Smith, who became known as the King of Vodka.
The origins of Swedish vodka go back even further, to the 15th century when distilled wine, or branvin, was used widely in medicine and for making gunpowder, until Swedes discovered there were more fun uses.
In 1879, Smith began to make vodka using a revolutionary distillation method called "rectification", where it is passed through several purifying cylinders, and this is the method still employed today.
When the alcohol industry was taken under state-control in 1917, vodka continued to be sold under the name Absolut Renat Branvin although Absolut was dropped from the title in the mid 1970s.
However, as the centenary year of Absolut Renat Branvin approached, Lars Landmark, the president of V&S, decided to celebrate by creating a new premium vodka for export, which would be named Absolut. Using up-to-date distilling techniques, V&S wanted to create "a new product that was a century old".
It set its sights high and decided to market Absolut to the US, which consumes 60 per cent of all vodka produced in the West. But they had to overcome initial hostility from a US that had never heard of Swedish vodka.
Ideas were thrown around but the breakthrough came when advertising guru Gunmar Broman saw an old Swedish medicine bottle in an antique shop window and decided this peculiarly Swedish item could represent the brand. Several designers were given the task to further develop the design and the decision was taken to keep the bottle clear with blue lettering.
US firm Carillion Importers eventually saw the potential for the product and it went on sale in Boston in 1979, winning a prize for best packaging later that year.
Absolut was powered into the global market place thanks to international ad agency TBWA and its idea to base a series of ads on the bottle and its name. Absolut Purity became Absolute Perfection and a bottle with wings became Absolut Heaven and so on.
The next coup was getting Andy Warhol to create a painting on the bottle in 1985. This assured Absolut got world wide attention and transformed it from a vodka drink into a piece of pop art, the perfect drink for aspirational consumers to show off with at dinner parties.
Warhol's protege Keith Haring was chosen for the second bottle painting, firming up the link with the art world and to date more than 350 artists have been commissioned by Absolut. Its 1200 ads have become collectors' items and all of them feature the bottle, its distinctive seal or the word Absolut.
Neil Bennett, trends researcher at brand consultancy The Future Laboratory, said Absolut's success has been down to the way the company had sold the drink "as both a Vodka brand and a lifestyle brand".
"Collaborations with brands, artists and designers are driven by campaigns that are created with similarities to fashion seasons, they simply communicate the brand's aspirations to be a brand of the creative and media generation in our ever evolving'knowledge society'," he said. "This further enhances their 'cool' leading image."
Absolut has also benefited from the growing popularity of vodka in Western markets. As Anne Nugent, head of alcoholic drinks research at Euromonitor, says, vodka is "very much in vogue with young consumers" due to its convenience as a mixer with cocktails. The seemingly endless introduction of different flavoured vodkas, add to the choice. It is the premium versions that are the most fashionable.
In the US, there has been a slowdown in beer sales as the younger generation seek to differentiate themselves from their parents, Nugent adds.
Absolut's biggest markets are the US, Canada, Greece, Germany and Spain.
Diageo's Smirnoff is the world leader and Absolut is in third place. Every drop of Absolut is made in the distilleries near Ahus, southern Sweden, where vodka has been produced for hundreds of years.
Last Friday, Sweden's centre-right Government asked for formal permission to privatise V&S, following its pre-election pledge to sell off more state-owned industries if it came to power. Although, it is early days, and permission for sale is not expected to be granted until May, many companies are queuing up.
The head of Bermuda-based Bacardi, Andreas Gembler, has said Absolut would be a "jewel" for the firm and he has written to the Swedish Government to express an interest. Bacardi bought New Zealand vodka firm 42 Below last year for $138 million.
Paul Walsh, chief executive of Diageo, the world's largest drinks company and maker of Smirnoff and Guinness, said last month he would be interested. Other companies eyeing up the spirit include French group Pernod Ricard and Anheuser Busch. US giant Fortune Brands, which owns Jim Beam bourbon, is thought to be a lead contender as it already has a distribution deal with V&S. However, V&S said yesterday it was far from certain that a sale to another trade player was the best way forward.
The company could be floated on the stock exchange or be merged with another firm, he said. V&S' chief executive Bengt Baron last month warned the Government not to rush into a sale.
- INDEPENDENT