Baileys remains the toast of Irish drinks industry

Baileys Irish Cream liqueur has been the greatest success story for the Irish drinks industry since Guinness. Its new chief executive, Mr Frank Fenn, claims Baileys has already surpassed the black stuff as the leading Irish brand around the globe and is confident the famed Irish cream will remain the jewel in the crown for some time yet.

Since its launch in 1974, Baileys has taken the world by storm. It is currently the number one liqueur in the world and the 13th biggest selling spirit.

In his new role, Mr Fenn's greatest challenge is to recruit new drinkers and to encourage the converted to drink Baileys more often. Within five years, this strategy aims to increase annual sales of Baileys from 4.2 million to 5 million cases. "Many accuse Baileys of being such a good product that it sells itself. That's not true. There are thousands of brands in the market. Our job is to fight for market share. That's not easy and costs a lot of money," says Mr Fenn.

Getting Baileys to the number one position is the culmination of a massive marketing campaign backed by a huge investment. In 1998, the company will spend £65 million sterling (£76 million), on promoting the brand throughout the world, having spent an average of £50 million a year since its inception. "That's the type of money it takes to make any dent in the international stage."

The majority of the growth in sales is expected to come from its most successful markets, which are Ireland, Britain, Spain, the US and Germany.

It will also be heavily investing ahead of sales in markets, such as Asia and Latin America, where it is keen to establish a presence.

"There are very big opportunities in our more developed markets for Baileys. In North America we are selling about one million cases a year, or 12 million bottles.

"But at these levels, we know that 10 per cent of consumers drink 80 per cent of the total volume of Baileys sold there. On average they drink around 30 glasses of Baileys a year, which is still a very low incidence."

He also dispells some of the perceptions about the typical Baileys drinkers. The group's research shows that far from a drink enjoyed by older consumers, more than 60 per cent of its customers are under 35 years old. It also indicates that men are just as fond of Baileys as women, with a 50/50 split between male and female drinkers.

Baileys knows it now must build on the success of the brand, and increase consumption.

"We know that consumers who drink Baileys once or twice a year have a very strong image around the brand. It's just that we haven't managed to convince them to use it more frequently."

Market research suggests that to some degree Baileys is pushing an open door in boosting its sales around the world. Statistics show that 85 per cent of all adults drink some type of alcohol.

While in the massive emerging markets of Russia and China, consumers are keen to try high-quality western brands, with local brands showing a marked decline.

Baileys has yet to make an impact in either of these markets, but the merger between Baileys' parent Grand Metropolitan and Guinness to form the Diageo drinks group should put paid to that.

Diageo has a very strong presence in many of the markets that Baileys still has to conquer, including Asia and Latin America. Mr Fenn believes the merger will indeed prove very helpful to Baileys.

The new chief executive has first-hand experience of the difficulties and challenges to be overcome in introducing Baileys to new consumers.

He joined Bailey's nine years ago and until recently was its international marketing director.

Most of his time was spent travelling, assessing and reinforcing the brand in key markets such as Australia, New Zealand and the US.

"While I was always based in Ireland, I spent something in the region of 110 days a year travelling."

He says some markets tend to be particularly difficult to penetrate. "Getting into the psyche of certain consumers in various markets can be quite difficult. Japan for instance is a very difficult market even though we have invested quite a lot of money and time there, we still haven't cracked it."

It is in scenarios such as this that Baileys is delighted to be able to call on the support of Diageo and is confident it will yield results.

Baileys has evolved to become a unique brand within the drinks industry because it has also become an integral part of the icecream, chocolate and confectionary sector. Mr Fenn stresses, however, that Baileys has to be very careful about how it uses the brand.

"We are not in the business of milking a trademark. Baileys is a very strong brand. If we had a situation where it had saturated its potential we might look at other products, but it's a long way from that stage yet," says Mr Fenn.

As a first foray into promoting other spirits under the Baileys umbrella, it has recently introduced Baileys whiskey on a test basis. The whiskey has been distributed to a relatively small number of outlets and has generated some very positive feedback, he says.

"We have to be very sure about what we do with anything under that trademark. Depending on the various benchmarks for evaluating that test we will decide when and if to roll the Bailey whiskey out on a national and international basis. It will be some time yet before that decision is taken."

The Irish market is the most successful market for Baileys. More Baileys is drunk per capita in Ireland that anywhere else. This factor has undoubtedly contributed to its success, according to Mr Fenn.

"We bring a lot of international customers to Ireland and it is great for them to see that it has been a generic success. The ingredients are indigenous to Ireland. Every single drop of Baileys is made here in Dublin. To have its most successful market in its home is a great advantage."

Some 400 people are directly employed in Ireland at Baileys, while a further 1,500 are directly working with the product on a global basis. Its main ingredient milk, comes from 3,000 Irish farmers. The company sees itself as a major player in the Irish economy.

"Baileys feels it has a responsibility to the Irish economy. It now accounts for over 1 per cent of Irish exports in value terms, and makes up over 50 per cent of spirits exported from Ireland."

Mr Fenn believes Baileys is the only contemporary global brand that has its home in Ireland.

"Guinness is an international rather than a global brand. Baileys is distributed in well over 130 markets worldwide and while Guinness is very successful, over 50 per cent of Guinness profits come from Ireland. In terms of a global presence, Baileys would be seen as a bigger icon. Five hundred million people around the world would know Baileys and drink it."