Alcohol Policies Across the Country: Implications in MichiganImplications in Michigan

James F. Mosher, JDJames F. Mosher, JDAl h l P li C lt tiAl h l P li C lt tiAlcohol Policy ConsultationsAlcohol Policy Consultations

November 6, 2008November 6, 2008Presentation to:Presentation to:

Michigan Alcohol Policy Conference: Burning Issues in Prevention: 2008Michigan Alcohol Policy Conference: Burning Issues in Prevention: 2008Michigan Prevention AssociationMichigan Prevention Association

“Captain Morgan maintains its relevance “Captain Morgan maintains its relevance with consumers entering the drinking age with consumers entering the drinking age because they can associate with the icon.”because they can associate with the icon.”yyChief MarketerChief Marketer, November 2005, November 2005

Philadelphia Inquirer, The (PA), March 1, 2001, Page: A01Philadelphia Inquirer, The (PA), March 1, 2001, Page: A01

MARDI GRAS MELEE MARDI GRAS MELEE PROVOKES OUTRAGEPROVOKES OUTRAGEPROVOKES OUTRAGE PROVOKES OUTRAGE AND CALL FOR CHANGEAND CALL FOR CHANGEAND CALL FOR CHANGEAND CALL FOR CHANGE

The Mardi Gras celebration Tuesday night on The Mardi Gras celebration Tuesday night on y gy gSouth Street brought a hangover to South Street brought a hangover to Philadelphia yesterday as officials, merchants Philadelphia yesterday as officials, merchants and residents assessed the drunken melee thatand residents assessed the drunken melee thatand residents assessed the drunken melee that and residents assessed the drunken melee that ended with 81 arrests, numerous injuries, and ended with 81 arrests, numerous injuries, and businesses scarred by vandalism.businesses scarred by vandalism.yy

Diageo:Diageo:Diageo:Diageo:The Innovator of the Distilled Spirits IndustryThe Innovator of the Distilled Spirits Industry

Formed in 1997 when Guinness and Grand Formed in 1997 when Guinness and Grand Metropolitan merged, becoming the largest Metropolitan merged, becoming the largest distilled spirits company in the world.distilled spirits company in the world.Determined to expand the U.S. market, Determined to expand the U.S. market, which has been dominated by beer.which has been dominated by beer.yy

Total MarketingTotal Marketing

“ … Combines “ … Combines all the key all the key marketing marketing elements into elements into a single a single orchestratedorchestratedorchestrated orchestrated thrust.” thrust.”

August A. August A. Busch, IIIBusch, III

4 “P” E i4 “P”s Exercise

Diageo: Competing with BeerDiageo: Competing with BeerDiageo: Competing with BeerDiageo: Competing with Beer

Beer has significant marketing advantagesBeer has significant marketing advantages over distilled spirits particularly for young drinkers:young drinkers:Advertising on network television;L r t r t (f Mi hi $ 20/ llLower tax rates (for Michigan, $.20/gallon instead of $1.87/gallon for distilled spirits);More ret il o tlet (Mi hi h 7 700 b rMore retail outlets (Michigan has 7,700 beer off-sale outlets compared to 4,000 distilled spirits off-sale outlets)spirits off sale outlets).

The AnswerCreate a maltCreate a malt--based, lowbased, low--alcohol alcohol be erage ith distilled spiritsbe erage ith distilled spirits

The Answer

beverage with distilled spirits beverage with distilled spirits branding that is appealing to branding that is appealing to young drinkers particularlyyoung drinkers particularlyyoung drinkers, particularly young drinkers, particularly young women, and regulated as young women, and regulated as beerbeerbeer.beer.

Developing Brand Loyalty Developing Brand Loyalty AAat an Early Ageat an Early Age

“Di ll d t S i ff I i“Di ll d t S i ff I i“Diageo rolled out Smirnoff Ice in “Diageo rolled out Smirnoff Ice in the US market...it suddenly put the the US market...it suddenly put the onceonce--stodgy Smirnoff name on thestodgy Smirnoff name on theonceonce stodgy Smirnoff name on the stodgy Smirnoff name on the tips of millions of echo boomers’ tips of millions of echo boomers’ tongues” tongues” –– ((ImpactImpact, May 15, 2003), May 15, 2003)gg (( pp y )y )

Echo Boomers:Echo Boomers:Americans born from 1980Americans born from 1980--199519958 8 –– 23 years old in 200323 years old in 2003

AppleAppleAppleApple

“The beauty of this category is that it brings in new drinkers, people who really don’t

like the taste of beer.”like the taste of beer.

Marlene Coulis, ,Director of New

Products,Anheuser Busch CoAnheuser-Busch Co.

Advertising Age, April 22, 20022002

Who are “New Drinkers”?Who are “New Drinkers”?Who are New Drinkers ?Who are New Drinkers ?

Age of First Use of Alcoholic Beverages among 12-17 year olds 2004: 14 4 years old12 17 year olds, 2004: 14.4 years old.

Every day 5 400 young people under 16 yearsEvery day, 5,400 young people under 16 years old started drinking.

Alcopop Advertising Expenditures Four Top AdvertisersFour Top Advertisers

(millions of dollars)

404550

25303540

SmirnoffB di

152025 Bacardi

Mike'sSkyy

05

10

2000 2001 2002 2003 2004

Television Advertising Placement: Television Advertising Placement: A i OA i OYouth Audience OverexposureYouth Audience Overexposure

35%

25%

30%

35%

20%

25%Alcopop ads

Distilled spirits

10%

15% Beer

Industry average

0%

5%

20062006

Source: Center on Alcohol Marketing and Youth

Bitch’s Brew, Girlie Beer, Bitch’s Brew, Girlie Beer, Cheerleader BeerCheerleader Beer

“A third of all girls “A third of all girls older than 12 have triedolder than 12 have triedolder than 12 have tried older than 12 have tried ‘alcopops’. Companies ‘alcopops’. Companies market these ‘startermarket these ‘startermarket these starter market these starter drinks’ to appeal to girls drinks’ to appeal to girls and young women.and young women.and young women. and young women. Don’t be taken in.”Don’t be taken in.”AMA 2004 StudyAMA 2004 Study

Beverage Choice for 12Beverage Choice for 12thth Grade Grade F l Bi * D i kF l Bi * D i kFemale Binge* DrinkersFemale Binge* Drinkers

25

15

20

rink

ers

Liquor

10

15

% b

inge

dr q

BeerWine

0

5%

1991

1993

1995

1997

1999

2001

2003

2005

*5+ drinks in one settingg

Alcopops akaAlcopops akaFlavored “Malt” BeveragesFlavored “Malt” Beverages

“Flavored malt beverages exhibit little or no “Flavored malt beverages exhibit little or no traditional beer or malt beverage character. … traditional beer or malt beverage character. … Brewers remove the color bitterness and taste thatBrewers remove the color bitterness and taste thatBrewers … remove the color, bitterness, and taste that Brewers … remove the color, bitterness, and taste that are generally associated with beer. … This leaves a are generally associated with beer. … This leaves a base product to which brewers add various flavors, base product to which brewers add various flavors, which typically contain distilled spirits, to achieve the which typically contain distilled spirits, to achieve the desired taste profile.”desired taste profile.”

Federal Alcohol and Tobacco Tax and Trade Bureau (TTB) Federal Alcohol and Tobacco Tax and Trade Bureau (TTB) Description of “Flavored Malt Beverages” (Alcopops)Description of “Flavored Malt Beverages” (Alcopops)

Michigan DefinitionsMichigan DefinitionsMichigan DefinitionsMichigan Definitions

"Mixed spirit drink""Mixed spirit drink" means a drinkmeans a drinkMixed spirit drinkMixed spirit drink means a drink … means a drink … which contains 10% or less alcohol by volume which contains 10% or less alcohol by volume consisting of distilled spirits mixed withconsisting of distilled spirits mixed withconsisting of distilled spirits mixed with consisting of distilled spirits mixed with nonalcoholic beverages or flavoring or coloring nonalcoholic beverages or flavoring or coloring materials and which may also contain 1 or morematerials and which may also contain 1 or morematerials and which may also contain 1 or more materials and which may also contain 1 or more of the following: (a) Water. (b) Fruit juices. (c) of the following: (a) Water. (b) Fruit juices. (c) Fruit adjuncts (d) Sugar (e) Carbon dioxide (f)Fruit adjuncts (d) Sugar (e) Carbon dioxide (f)Fruit adjuncts. (d) Sugar. (e) Carbon dioxide. (f) Fruit adjuncts. (d) Sugar. (e) Carbon dioxide. (f) Preservatives.Preservatives.

Mich. Comp. Laws s. 436.1109

Michigan DefinitionsMichigan DefinitionsMichigan DefinitionsMichigan Definitions

“Beer”“Beer” means any beverage obtained by means any beverage obtained by alcoholic fermentation of an infusion oralcoholic fermentation of an infusion oralcoholic fermentation of an infusion or alcoholic fermentation of an infusion or decoction of barley, malt, hops, or other decoction of barley, malt, hops, or other

l i t bl tl i t bl tcereal in potable water.cereal in potable water.

Mich. Comp. Laws § 436.1105

What alcohol industry commentators say aboutWhat alcohol industry commentators say about

Mi tt W iMi tt W iMinott WessingerMinott Wessinger

One of the most One of the most successful successful innovators in innovators in industry history industry history y yy yHe is a risk takerHe is a risk takerThe guy has theThe guy has theThe guy has the The guy has the Midas touchMidas touch

“H h“H h“He has an uncanny “He has an uncanny knack for creating knack for creating brands that tap into brands that tap into consumer trends consumer trends and demand.”and demand.”

“[Wessinger] kept“[Wessinger] kept[Wessinger] kept [Wessinger] kept close tabs on close tabs on popular culturepopular culturepopular culture popular culture and consumer and consumer trends intrends intrends in trends in everything from everything from music to art ”music to art ”music to art.music to art.

The Sparks FormulaThe Sparks FormulaThe Sparks FormulaThe Sparks Formula

Build on the energy Build on the energy d i k kd i k kdrink marketdrink marketAlcohol + caffeine = Alcohol + caffeine = enhanced partyingenhanced partying

Youth/Adult Energy Drink gyConsumers

30%

35%

20%

25%

10%

15% Youth (12-17)Adults (18+)

0%

5%

RegularUsers

Heavy Users(10+/month)

Which Energy Drink Contains Which Energy Drink Contains Alcohol?Alcohol?

At One San Diego Middle School…At One San Diego Middle School…At One San Diego Middle School…At One San Diego Middle School…

Teachers checked the campus during Teachers checked the campus during lunch to see how many young people lunch to see how many young people were drinking energy drinks. were drinking energy drinks.

They found that 12 of the 43 students They found that 12 of the 43 students with energy drinks were drinking alcoholwith energy drinks were drinking alcoholwith energy drinks were drinking alcohol. with energy drinks were drinking alcohol.

(Oct 2007)(Oct 2007)

Alcoholic Energy DrinkAlcoholic Energy DrinkMarketing StrategiesMarketing StrategiesMarketing StrategiesMarketing Strategies

Viral MarketingViral Marketing

“The early adopters of Sparks were “The early adopters of Sparks were spending a significant amount of time onspending a significant amount of time onspending a significant amount of time on spending a significant amount of time on the Internet. We saw that and embraced it. the Internet. We saw that and embraced it. We invited consumers to comment on the We invited consumers to comment on the Website and post comments without Website and post comments without editing them, creating a community of editing them, creating a community of S k h h d id dS k h h d id dSparks users who shared ideas and Sparks users who shared ideas and experiences." experiences." Mi tt W iMi tt W iMinott WessingerMinott Wessinger

“Miller goes under theMiller goes under the radar;

G ill k ti fGuerrilla marketing of [Sparks] targets Generation Y”

Milwaukee Journal Sentinel, December 2007

Generation Y: Those born between 1980 and 1995 (13-27 year olds)

Advertising Age

Sparks onSparks on FacebookFacebookCh GCh GChat GroupsChat Groups

Drink Sparks DieDrink Sparks DieDrink Sparks Die Drink Sparks Die YoungYoung

Sparks AddictsSparks AddictsSparks Addicts Sparks Addicts AnonymousAnonymous

Sparks baby!Sparks baby!Sparks baby! Sparks baby!

I drink Sparks every I drink Sparks every day of my lifeday of my lifey yy y

Sparks energizes Sparks energizes BermudaBermuda

Sample Web Postings by High Sample Web Postings by High School StudentsSchool Students

“Sparks plus any night or day classic is“Sparks plus any night or day classic is“i l k b i h h“i l k b i h hSparks plus any night.. or day.... classic is Sparks plus any night.. or day.... classic is what i first tried on like prom night or what i first tried on like prom night or something like it and i was hooked then plussomething like it and i was hooked then plus

“i luv sparks because it has that yummy “i luv sparks because it has that yummy flintstone vitamin taste, gets me drunk and flintstone vitamin taste, gets me drunk and gives me that extra engery i need to get throughgives me that extra engery i need to get throughsomething like it and i was hooked then plus something like it and i was hooked then plus came around and it was love at first sip”came around and it was love at first sip”gives me that extra engery i need to get through gives me that extra engery i need to get through a nite of partying!”a nite of partying!”

Sparks: The Party DrinkSparks: The Party DrinkSparks: The Party DrinkSparks: The Party Drink

“ lif“ lif i i i ii i i i“a life“a life--saving invention.i can start saving invention.i can start drinking at noon, get wasted and drinking at noon, get wasted and “i luv sparks because it has that “i luv sparks because it has that g , gg , gtired by 7pm and then drink some tired by 7pm and then drink some sparks and it starts all over again isparks and it starts all over again i

ppyummy flintstone vitamin taste, gets yummy flintstone vitamin taste, gets me drunk and gives me that extrame drunk and gives me that extrasparks and it starts all over again. i sparks and it starts all over again. i love you sparks. that....and it's love you sparks. that....and it's me drunk and gives me that extra me drunk and gives me that extra engery i need to get through a nite of engery i need to get through a nite of partying!”partying!”cheaper than cocaine.”cheaper than cocaine.”partying!”partying!”

Alcohol Brands Cost LessAlcohol Brands Cost Less

Alcohol + Energy Drinks = Alcohol + Energy Drinks = Increased Risk of InjuryIncreased Risk of Injury

Stimulants cause a reduced subjective feeling of intoxication

The result: Increased risk taking and increased risk of injuryA “ id A k k”

Alcohol effects on motor skills, judgment and mental acuity not

increased risk of injuryA “Wide Awake Drunk”judgment and mental acuity not affected by stimulants

S. E. Ferreira, Marco T. de Mello, S. Pompe´ ia,& M. L. Oliveira de Souza-pFormigoni 2006.

Sparks Energy Drinks Total SalesSparks Energy Drinks Total Sales(gallons)(gallons)

14000

10000

12000

14000

6000

8000

10000

Sparks

4000

6000

0

2000

2002 2003 2004 2005 20062002 2003 2004 2005 2006

The JackpotThe JackpotThe JackpotThe Jackpot

Wessinger’s companyWessinger’s companyWessinger s company Wessinger s company sold Sparks to SAB sold Sparks to SAB Mill i 2006 fMill i 2006 fMiller in 2006 forMiller in 2006 for

$220 million$220 million$220 million$220 millionfour years after itsfour years after itsfour years after its four years after its introduction.introduction.

Mi tt W i ithMinott Wessinger with rapper DJ Pooh

State Attorneys General InvestigationState Attorneys General InvestigationState Attorneys General InvestigationState Attorneys General Investigation

A hA hAnheuserAnheuser--Busch Busch

ttagrees to agrees to remove remove ti l tti l tstimulants stimulants

from Tilt from Tilt d B dd B dand Bud and Bud

ExtraExtra

Alcohol Problems Prevention

Changing the Paradigm

INDIVIDUALS POPULATIONS

Prevention ParadigmsgIndividualIndividual EnvironmentalEnvironmental

Behavior and behavior change

Policy and policy changeg g

Relationship of i di id l t l h l

Social, physical, political individual to alcohol

problemand economic context of

alcohol problems

Short term focus on program

Long term focus on policy development and p g

developmentpo cy deve op e t a d

implementation

Prevention ParadigmsgAlcohol IndustryAlcohol Industry EnvironmentalEnvironmentalIndividual choice and

free marketPolicy change and social

context

Cultural traditions used to promote consumption

Cultural traditions integrated into policy

Profit is motivator Public health and social justice is motivatorjustice is motivator

Industry controls policy d th h lit

Communities control li d th hagenda through elite

politicspolicy agenda through

grassroots action

4 “P”s from Public Health Perspective

Place MattersPlace MattersOverconcentration:Overconcentration:

A link to youth violence

Implementing Prevention Strategiesp g gIndividualIndividual EnvironmentalEnvironmental

Individual seeks self improvement

Individual seeks community improvementp y p

Individual is di

Individual is activistaudience

Professionals P f i l i tProfessionals make decisions for

individual

Professionals assist communities in

creating policy changeindividual creating policy change

“Th h f t f f d d t“Th h f t f f d d t“Those who profess to favor freedom and yet “Those who profess to favor freedom and yet depreciate agitation, are people who want crops depreciate agitation, are people who want crops

ith t l hi th d th t iith t l hi th d th t iwithout ploughing the ground; they want rain without ploughing the ground; they want rain without thunder and lightning; they want the without thunder and lightning; they want the

ith t th f it t Thith t th f it t Thocean without the roar of its many waters. The ocean without the roar of its many waters. The struggle may be a moral one, or it may be a struggle may be a moral one, or it may be a

h i l it b b th B t it t bh i l it b b th B t it t bphysical one, or it may be both. But it must be a physical one, or it may be both. But it must be a struggle. Power concedes nothing without a struggle. Power concedes nothing without a d d it h d it ill ”d d it h d it ill ”demand; it never has and it never will.”demand; it never has and it never will.”Frederick DouglassFrederick Douglass