It wasn’t long ago that an Aperol spritz was a niche cocktail order in the U.S., but in 2017 orange hued ice-filled cocktail glasses began popping up everywhere as the spritz emerged as the drink of the summer.
Another Italian bitter, Campari, was up +10.7% in sales last fiscal year, fueled by the global rise of the Negroni. If there’s one person who has had her hand in the transformation of aperitifs in the U.S., it’s Melanie Batchelor, who in her 12 years at the global spirit company has built successful strategies for some of the bar world’s most iconic brands.
We chatted with Batchelor about how the company found U.S. drinking occasions for the Italian brands, the way she responds to and executes on emerging trends, and what’s in store for the company’s newest acquisitions and releases. This interview has been edited for length and clarity.
How do you identify early cocktail trends and then execute around them? Let’s take the Aperol spritz as an example.
Going back ten years when I first moved to the U.S., Aperol was a fairly small brand in our portfolio of about 50,000 cases. But we did see the potential for the brand especially because of the success of it and the aperitivo occasion in Italy, and so we saw the opportunity and we started to see the brand grow quite well in Europe and other markets.
What we did in the U.S. was think about, how does the aperitivo occasion integrate within U.S. culture? Because aperitivo is a very regular occasion in Italy, whereas that occasion doesn’t exist in the U.S. So we looked around at the trends that we could tap into, whether it was daytime drinking or low-alcohol cocktails. And then we really focused on taking all of the great things around the Aperol brand— the vibrancy, conviviality, and obviously it’s an amazing and beautiful cocktail— and tapped into local culture and focused on experiential and getting trial, and it’s been a pretty consistent and big investment since about 2016.
Are there other trends that you have used to fuel growth of the rest of the portfolio, and how do you keep building on them for growth even once something has hit its peak?
We have been rallying around the resurgence of classic cocktails for really the last 10 years. There are a lot of different things that drove that trend: bartenders really were the cornerstone, and there were even cultural references like Mad Men.
The great thing for us is we are the heart of the Negroni and we saw that opportunity— and again, Campari was a fairly small but steady brand in our portfolio that we saw bartenders starting to play with for the Negroni and we’ve really helped to fuel the love of Negronis globally.
And so not only have we invested behind the growth of that cocktail, but we have focused on the Negroni tree, really promoting different variations whether it’s the Kingston with rum or the Boulevardier with bourbon, and the Sbagliato had a big moment last year. So that’s really been core to the growth of Campari over the past ten years.
How do you identify drinking occasions and how do they feed innovation?
One big investment we made in the U.S. is the Campari Academy, so we have a fully resourced training and innovation center in our offices. We’ve got some of the best minds in the industry running that and while the academy is geared towards education, it’s an innovation hub for us. They’re really tapping in and starting to see very small trends that are just emerging, so then we can go in and study those and feed that into our innovation pipelines.
But we also have obviously a lot of social listening tools to start to pick up on such trends. Even thinking about the Sbagliato, that was something that came from one post on X but within 24 hours we had identified it and built and executed a full plan behind that cocktail, and that resulted in great double-digit growth for Campari for about six months.
Campari has been relatively quiet on the RTD front compared to your competitors, why?
We’ve been fairly cautious in that category, our focus is definitely on spirits and growing our spirits brands but where we see the right opportunity, we’ll play there. When you think about our portfolio, it plays into classic cocktails, so one innovation that is more ready-to-serve versus RTD is our Negroni bottle. A lot of the Negronis on the market aren’t made with Campari, and so they don’t taste like an authentic Negroni, so it’s a very premium product and I’m quite bullish on the opportunity for it to grow.
As for RTD, we do have a larger RTD business in Australia, so it really depends on what the local market strategy is, but in the U.S., we’re going to be quite selective. We did see the opportunity in markets where the Aperol Spritz is already well established and that gave consumers a convenient option to have an Aperol Spritz at home. We’re actually testing a new Skyy RTD in a couple of big Skyy markets [California, Texas and Florida], but we wanted to do it with caution, get the learnings and then see whether there’s the opportunity for expansion.
I understand you can’t talk about the Courvoisier deal until it closes later this year, but can you share what made it a target and what are the plans for the brand?
From a group perspective, we’ve got a pretty public ambition that 50% of our growth will come through acquisition and as we’re thinking about acquisitions, the U.S. is definitely a focus market for us. So looking at brands that can help us drive scale and continue our premiumization journey are the ones that we’ve been targeting.
What I’m excited about is coming back to the track record of what we’ve done. We acquired Wild Turkey in 2009 and we’ve done a lot of work starting with the positioning, the packaging, the innovation, and a lot of really special marks of Wild Turkey, but we’ve also invested heavily in our production facilities and built a multimillion dollar bottling facility and visitor center. What I’ve seen is that we have a track record of looking long term, rebuilding these brands, premiumizing them and also making significant investments in infrastructure.
Are there any gaps for more M&A you can share?
We are competing in all the big categories now and we have a very well rounded portfolio. If I look back over the last 10 years, we’ve made acquisitions in bourbon, in rum, we’ve made small acquisitions on top of the big one which was Skyy, so we’ve really rounded out the portfolio and it’s put us in a much stronger position. Not that long ago Campari was really the Skyy spirits company, so we’ve got a very healthy portfolio but still a very low share and as I said, the U.S. is a priority market for us, so I’m sure there’s going to be more coming.