Stanford GSB

Stanford GSB

Sunday, January 17, 2016

Rapper's Delight

For our required blog post this weekend, I started thinking about the role wine plays in modern history and with modern day celebrities. In doing a little research I found this article particularly amusing http://www.buzzfeed.com/rachelysanders/are-celebrities-celebrity-wines-actually-good-taste-test#.ewGrvXxVW While the article provides some good humor, it underscores the point that celebrities these days are getting into the wine game, right and left. Some of these businesses are serious like Francis Ford Coppola's and countless others are vanity projects.

One of the businesses that I find most interesting is E-40's. E-40 is a Bay Area rapper who launched his own wine brand in 2013. At launch, the wine company, Earl Stevens (E-40's given name), produced a red blend and a mango-flavored moscato, referred to as Mangoscato. While the term mangoscato seems far from serious, I learned after doing research that this wine brand was more than just a pet project. The business was launched in conjunction with EJ Gallo, one of the largest wine companies in the United States. In addition, the product goes after a specific market and was designed to speak to that market. According to an NBC report, during 2013 moscato was popular among rappers and their fans. It had significant mentions in popular songs, more so than in the past. E-40 and Gallo focused on a market that made sense with his celebrity and his familiarity with what would be successful. I wonder whether other rappers will follow him into the wine game.

4 comments:

  1. Emily, I love this post. Pop music and hip hop music have had dramatic effects on wine and Champagne consumption, so it could make business sense for artists to invest in certain wine brands, as Nicki Minaj (Myx Fusions) and Jay-Z (Armand de Brignac) have done. There's much written about Moscato being "a gateway wine" for young women and young people of color. This post reminds me of a terrific NPR piece by Sam Sanders, a great culture journalist, who reported on the 2013 trend you're talking about in "Moscato Finds a Younger, Hipper and Browner Audience" for All Things Considered. It's a great short piece that shows how pop culture can drive cultural trends that dramatically affect sales.

    http://www.npr.org/sections/codeswitch/2013/06/27/196210549/MOSCATO

    ReplyDelete
  2. Also love these posts. Katherine, I think it's important to add that before Jay-Z's acquisition of Armand de Brignac (popularly known as Ace of Spades), the brand was not very well known. Besides the investment opportunity and lending his street credibility to the brand, Jay-Z was also taking the next step in a long running feud he had with the ownership of Cristal, a brand that he helped popularize during his Blueprint / Blueprint 2 era ('90s and early '00s). When the Managing Director of the Cristal brand was asked what he thought about rappers featuring Cristal in their music videos, he asked, "What can we do? We can't forbid people from buying it. I'm sure Dom Perignon or Krug would be delighted to have their business.

    Jay-Z and many commentators saw this reaction as racist, and at the time he released a statement saying he would never drink Cristal again. He entered into a promotion deal with Armand de Brignac that eventually led to his acquisition of the brand. As he put it on the Blueprint 3, "I used to drink Cristal, them motherf*ckers racist / So I switched gold bottles on to that Spade sh*t."

    http://www.theatlantic.com/entertainment/archive/2014/11/jay-z-makes-it-rain-with-champagne/382573/

    ReplyDelete
  3. Thanks for sharing the interesting posts and replies Emily, Travis and Katherine! When discussing hip hop and alcoholic beverages another person came to mind for me immediately, the founder of Hpnotiq and Nuvo, Raphael Yakoby. Similar to Moscato these brands also leveraged a fruity taste profile and lower alcoholic content relative to other comparable beverages they were marketed against.

    Launched in 2001, Hpnotiq is a blue liqueur packaged in an iconic perfume-like bottle and is made with fruit juices, vodka and cognac. It was promoted by everyone from Puff Daddy (at the time) to Jay Z. Yakoby successfully sold the brand for $60M to Heaven Hill Distileries in just 2 years.

    In 2007, Yakoby tried his hand again at marketing to the urban market and leveraging hip hop artists to do so. He launched Nuvo, a sparkling liqueur made with French vodka, white wine and fruit nectar. Similar to Hpnotiq, the liqueuer stands out for its unique perfume-like bottle and pink color. The brand claimed to be the first sparkling liqueur and again tried to appeal to urban consumers as a luxury beverage that was lower in alcoholic content than a bottle of hard liquor. Although I don’t have any sales data, I would assume that Nuvo was less successful than Hpnotiq based on anecdotal data.

    The interesting thing I find regarding consumer brands that appeal to urban markets is that they tend not to ever gain as much popularity or success in broader market. Whether it is Fubu, Baby Phat, Rocawear, they all failed to gain a strong foothold in the larger consumer market. As we come off the holiday MLK weekend, I wonder how social perceptions or biases may play into that still to this day. I wonder if Moscato has/will see as much growth as it has with urban market as it does with other wine drinkers. My guess is not, but who knows.

    ReplyDelete
  4. Thanks for sharing the interesting posts and replies Emily, Travis and Katherine! When discussing hip hop and alcoholic beverages another person came to mind for me immediately, the founder of Hpnotiq and Nuvo, Raphael Yakoby. Similar to Moscato these brands also leveraged a fruity taste profile and lower alcoholic content relative to other comparable beverages they were marketed against.

    Launched in 2001, Hpnotiq is a blue liqueur packaged in an iconic perfume-like bottle and is made with fruit juices, vodka and cognac. It was promoted by everyone from Puff Daddy (at the time) to Jay Z. Yakoby successfully sold the brand for $60M to Heaven Hill Distileries in just 2 years.

    In 2007, Yakoby tried his hand again at marketing to the urban market and leveraging hip hop artists to do so. He launched Nuvo, a sparkling liqueur made with French vodka, white wine and fruit nectar. Similar to Hpnotiq, the liqueuer stands out for its unique perfume-like bottle and pink color. The brand claimed to be the first sparkling liqueur and again tried to appeal to urban consumers as a luxury beverage that was lower in alcoholic content than a bottle of hard liquor. Although I don’t have any sales data, I would assume that Nuvo was less successful than Hpnotiq based on anecdotal data.

    The interesting thing I find regarding consumer brands that appeal to urban markets is that they tend not to ever gain as much popularity or success in broader market. Whether it is Fubu, Baby Phat, Rocawear, they all failed to gain a strong foothold in the larger consumer market. As we come off the holiday MLK weekend, I wonder how social perceptions or biases may play into that still to this day. I wonder if Moscato has/will see as much growth as it has with urban market as it does with other wine drinkers. My guess is not, but who knows.

    ReplyDelete