Three Simple Rules: A Short Course on Marketing and Advertising Your Spirits

[Originally published in the Summer 2017 issue of Artisan Spirit Magazine.]

Artisan Spirit Summer 2017It is hard enough to make good spirits.  But if you’re going to meet with commercial success, you can’t afford to stop at simply producing the stuff.  You must also find a way to get people to buy it (hopefully, more than once).  That means you’re going to be marketing that wonderful elixir coming off the still.  How do you do that and stay out of trouble?

In the U.S., the regulation of the marketing and advertising of alcoholic beverages (like the regulation of alcoholic beverages generally) is a bit of a hodgepodge.  Producers needs to be mindful of the requirements of both federal and state authorities, as well as the views and strong suggestions of industry groups.  While this can seem daunting, most of these constraints can be described as falling within three basic rules — each of which can be readily understood.  Those rules are as follows:  (i) be truthful; (ii) don’t encourage irresponsible consumption; and (iii) don’t be a jerk.  Before we get into a discussion of the nuances within those three general rules, it is important to keep in mind what we actually mean when we talk about the advertising of spirits.

The first point of contact for answering that question is a familiar one for spirits producers:  the Alcohol and Tobacco Tax and Trade Bureau (TTB).  For purposes of TTB regulations, “advertisement” is defined to include any written or verbal statement, illustration or depiction which is in — or calculated to induce sales in — interstate or foreign commerce, or is disseminated by mail.  At this point, you might be excused for thinking that because your distillery doesn’t engage in traditional advertising campaigns like television or radio spots, or placing ads in your local newspaper, you don’t need to worry about this definition.  You would be mistaken.  This definition — and the surrounding interpretations of it — mean that your distillery’s social media and other internet-based activities are probably “advertisements” for purposes of the TTB.

Sorry to break it to you, but the bad news doesn’t stop there.  Your social media campaigns are probably also advertisements — and therefore worthy of careful scrutiny — for purposes of state liquor control agencies, the Federal Trade Commission and the U.S. Food and Drug Administration.  Undoubtedly, they are also “advertisements” for purposes of the Code of Responsible Practices for Beverage Alcohol Advertising and Marketing (the “Code” — described in detail below) adopted by the Distilled Spirits Council of the United States (DISCUS).  With that many cooks in the kitchen, what’s a small distillery to do — simply close the doors?  Not a chance.  That stuff you’ve got in the barrel is too good to pour down the drain; just stick within the guardrails of these three main rules and — in most cases — you’ll be fine.

Rule Number One:  Be Truthful.  We hear a lot in the media about truth in advertising.  While most of that discussion isn’t focused specifically on the spirits industry, the issues around truthfulness are the same.  The statements in your advertisements must be truthful and must not mislead (or have the potential to mislead) the consumer.

In most cases, making sure your statement is truthful means having the facts to back up whatever you’ve said.  For the purposes of the TTB, our shorthand of “truthful” needs to be unpacked just a bit.  The applicable regulations can be found in 27 CFR 5.65.  Specifically, the regulations prohibit:

  • Any statement that is false or untrue in any meaningful way, or that, irrespective of falsity, directly, or by ambiguity, omission, or inference, or by the addition of irrelevant, scientific or technical matter tends to create a misleading impression.
  • Any statement, design, device, or representation of or relating to analyses, standards or tests, or relating to any guarantee, in each case irrespective of falsity, which the appropriate TTB officer finds to be likely to mislead the consumer.
  • Any statement that the spirits are distilled, blended, made, bottled or sold under or in accordance with any municipal, state, federal or foreign authorization, any reference to the spirits being “bottled in bond” (or similar descriptions) or any reference to age unless the statement or reference would be permitted on the label.
  • Any use of the word “pure” unless it is part of the bona fide name of a relevant party or it refers to a particular ingredient used in the spirits and is a truthful representation about the ingredient.
  • Any use of the words “double distilled” or “triple distilled” unless it is a truthful statement of fact and the spirit is one for which double distillation or triple distillation is not a necessary part of the production process.
  • Any statement regarding an association between the consumption of spirits and any health benefit, unless the statement is truthful and adequately substantiated by scientific or medical evidence.
  • Any representation that the spirits were manufactured in or imported from a place or country other than that of their actual origin, or were produced or processed by one who was not in fact the actual producer or processor.
  • Any use of the American flag or any emblem, seal, insignia or decoration associated with the American flag, armed forces or any family or organization, or any representation likely to mislead the consumer to think that the product is in some way associated with such party.

In addition to these prohibitions, TTB rules also state that you cannot advertise two or more brands simultaneously if (i) the resulting advertisement makes it appear that the statements about the first brand are applicable to the second brand and (ii) you couldn’t actually say those things about the second brand without violating these prohibitions.  The rules also provide a general catch-all that you can’t say something in an advertisement for a distilled spirits product that is in conflict with what you put on the label.

Obviously, a few of these requirements go beyond what your parents might have meant when they told you to “tell the truth.”  Nevertheless, when the prohibitions are distilled down (pun intended) they all ultimately derive from the requirement that the advertising of spirits must not mislead consumers in any meaningful way.  As a starting point, when you’re considering your advertising or social media campaigns, consider asking yourself “could anyone be misled by what we are saying.”  That will go a long way toward satisfying these requirements.  If the answer to your question is “yes” then you’d be well-advised to make some changes.

Rule Number Two:  Don’t Encourage Irresponsible Consumption.  One of my favorite hooch-related quotes is by Noah Sweat — delivered in 1952 as part of a speech while he was a Mississippi state legislator and was asked about prohibition — then the law of the state.  The quote (slightly abbreviated) is as follows:

If when you say whiskey you mean the devil’s brew, the poison scourge, the bloody monster, that defiles innocence, dethrones reason, destroys the home, creates misery and poverty, yea, literally takes the bread from the mouths of little children. . . . then certainly I am against it.

 But, if when you say whiskey you mean the oil of conversation, the philosophic wine, the ale that is consumed when good fellows get together, that puts a song in their hearts and laughter on their lips, and the warm glow of contentment in their eyes; . . .if you mean the stimulating drink that puts the spring in the old gentleman’s step on a frosty, crispy morning; if you mean the drink which enables a man to magnify his joy, and his happiness, and to forget, if only for a little while life’s great tragedies . . . if you mean that drink, the sale of which pours into our treasuries untold millions of dollars, which are used to provide tender care for our little crippled children, our blind, our deaf, our dumb, our pitiful aged and infirm; to build highways and hospitals and schools, then certainly I am for it.

This is my stand.  I will not retreat from it.  I will not compromise.

Sweat faced the critical challenge of considering whether to permit the sale of alcohol — a substance that can rightfully be considered both a benefit to and a scourge of society.  Those of us who wish to market alcohol face the same predicament.  We wish to encourage its responsible purchase and consumption, while simultaneously discouraging problematic consumption.  This is quite a conundrum.

Thankfully, we’re not the only ones who have spent some time thinking about the issue.  While both state liquor control agencies and the TTB have enacted some regulations around responsible marketing, the area remains one for which the industry has (so far) managed a fair amount of self-regulation.  Specifically, the majority of larger producers (representing approximately 70 percent of the spirits sold in the U.S.) strive to adhere to the DISCUS Code.

As part of the Code, DISCUS requires its members to adhere to general principles concerning the responsible placement of alcohol advertising and marketing materials, as well as principles related to the responsible content of those materials.  For example, the Code states that beverage alcohol advertising and marketing should be placed into a particular media stream only when at least 71.6 percent of the audience for that stream is expected to be of legal purchase age.  Similarly, adherence to the Code requires that DISCUS members’ products not be advertised or marketed in college or university newspapers, or on college or university campuses, except for licensed retail establishments located on such campuses.  This is the crux of DISCUS’ approach to responsible placement: advertisements and marketing efforts should be directed into environments where the substantial majority of the likely audience are of legal purchase age.

With respect to the actual content of those marketing efforts, the Code is a bit more prescriptive.  Specifically, the Code contains numerous requirements ranging from a prohibition on the marketing of alcohol in a manner “associated with the attainment of adulthood” to requiring age-affirming gateways for DISCUS members’ websites, to prohibiting the use of “sexual prowess or sexual success as a selling point for the brand.”

DISCUS’ approach in the Code — while voluntary and only enforceable against DISCUS’ members — is consistent with the actual legal requirements imposed with respect to the content of alcohol marketing by both the TTB and many state liquor control agencies.  For example, the TTB and the Code both prohibit advertisements that are obscene or indecent.  Similarly, both the Code and the laws of several states prohibit advertisements that depict or appear to condone driving while intoxicated.

Producers should also be mindful that there remain legal obligations imposed by the TTB or state liquor control agencies that go beyond the specific requirements of the Code with respect to the appropriate content of alcohol marketing materials.  For example, the TTB prohibits any health-related directional statement (i.e., a statement that directs consumers to a third party or other source of information regarding the effects on health of distilled spirits or alcohol consumption) unless the direction is to a neutral third party and the statement contains the specific disclaimer “[t]his statement should not encourage you to drink or to increase your alcohol consumption for health reasons” (or a similar disclaimer approved by a TTB officer).

Rule Number Three:  Don’t Be a Jerk.  As the final leg of our advertising and marketing best practices triangle, I offer some advice that most of us likely received from our parents but is sometimes forgotten in the context of business: don’t be a jerk.  This is obviously somewhat subjective, but once again the TTB, DISCUS and various state liquor control agencies have provided us with some helpful context and guidance.  For example, the TTB prohibits advertisements that utilize subliminal messaging or are “disparaging of a competitor’s product.”  Similarly, the Code states that beverage alcohol advertising and marketing materials should “reflect generally accepted contemporary standards of good taste.”  Furthermore, the laws of many states provide additional requirements relative to advertising that arguably fall within the don’t be a jerk rule.  Pennsylvania, for example, prohibits the advertisement of alcoholic beverages by a licensee if the licensee does not actually have a sufficient supply of the beverage on hand to meet normally expected demands.  While Washington state prohibits advertising alcohol by use of sound trucks.  I submit that driving a truck down a street using a loudspeaker to advertise liquor that you don’t have would fall within even the most restrictive definition of jerk-like behavior.  Note that these examples are not exhaustive and you need to consult the rules of the TTB and your state (and perhaps even the Code) for guidance as to any new marketing campaign you might wish to undertake.  Be careful.  If you think your new campaign is hip and edgy, there is a decent chance that someone else might think you’re being a jerk.

Putting It All Together.  With our three rules established, let’s consider how to put them into practice.  Suppose, for example, you make a phenomenal vodka.  [Note: As I’m not a vodka guy, I’m not actually convinced there is such a thing — but stick with me for a moment.]  Being appropriately proud of your spirit, you want your advertising campaign to convince the world that your vodka is — in fact — phenomenal and worth buying.  You come up with a few possible alternatives:

  1. You launch a national marketing campaign with the slogan: “Tastes better than Smirnoff.”
  2. You pursue an internet-based campaign focused on college campuses in which you use the slogan: “The only thing sexier than what’s in the bottle is the person drinking it.”
  3. You create a series of television ads featuring an attractive nurse purring the line: “A shot a day keeps the doctor away.”
  4. You include the phrase “the world’s best tasting vodka” on all your marketing materials.
  5. You create a series of print ads using the phrase “[brand] vodka better than a [insert medical malady].         

Which, if any, of these should you choose?  Alternatively, which might be problematic?  Let’s examine each of them in turn.

Campaign Number 1:  Comparisons.  Do we have data to suggest that our statement is true?  How can we demonstrate that our product tastes better than Smirnoff (or any other brand)?  Being able to substantiate this claim (e.g., by being able to show the results of blind-taste tests) is going to be critical if we’re going to pass our obligation to be truthful.  Nevertheless, even if the ad is truthful, are we being a jerk?  The ad is derogatory of a competitor’s product — a violation of TTB rules.  Furthermore, a huge multi-national conglomerate with an army of lawyers owns the competitor we’re targeting.  Do we want that fight?  It’s probably not the best choice for our marketing resources.

Campaign Number 2:  Big Man on Campus.  Sex sells — we see that every day in our media.  Few among us have not found ourselves being targeted (perhaps even tempted) by ads suggesting that by using a particular product, we will become irresistible to the objects of our sexual desires.  This campaign fits right into that model.  But, is it appropriate?  By marketing exclusively on college campuses, we are likely running afoul of the Code — as well as the laws of those states that prohibit the on-campus advertisement of spirits.  Not to mention, the suggestion that by drinking our product we will achieve our sexual aims is fairly overt.  Meaning we’re probably violating our rule to abstain from encouraging irresponsible consumption.

Campaign Number 3: Hello, Nurse.  There is nothing particularly graphic, indecent or obscene about the ad campaign — so if we can convince ourselves that the ads comply with general standards of good taste perhaps we can convince ourselves we’re not being a jerk by running them.  Having what appears to be a medical professional endorse our product?  That’s problematic.  And the tagline itself — although tongue-in-cheek — nevertheless appears to suggest a correlation between drinking our vodka and better health, which probably violates both the rule to be truthful as well as the rule not to encourage irresponsible consumption.  This one isn’t going to work.

Campaign Number 4: “The World’s Best Tasting Vodka.”  This line has a certain amount of appeal.  While it might be dismissed as simple puffery or opinion, the boast could be substantiated (and the line viewed as truthful) if your vodka has received a gold medal or two in international competition.  There’s nothing in the tagline (or the way you intend to use it) that seems to encourage irresponsible consumption.  It also isn’t overtly derogatory to any competitor because it doesn’t mention any by name, so it might just pass the don’t be a jerk test.

Unfortunately, it really doesn’t pass that test.  Because part of not being a jerk means ensuring you’re not stealing someone else’s good idea.  The good folks at Grey Goose (owned by Bacardi Global Brands since 2004) registered the tagline as a trademark in 2007.  So, while hitching your marketing wagon to this particular line means you’ll be in good company, it also means you’re likely to get sued for trademark infringement.

Campaign Number 5:  Blunt Trauma.  By all objective measures, consumption of your vodka (in reasonable amounts) is indeed probably better than most medical maladies.  So, if you were to advertise your vodka as, for example, “better than a punch in the gut” or “better than a kick in the head” — it will probably pass the test of being truthful.  Assuming that the print ads you plan to run will be in magazines with an audience that is predominantly of legal-purchase age, this one also probably passes the test of not encouraging irresponsible consumption.  However, note that you’ll want to avoid versions of the tagline that seem to suggest that your vodka is a treatment for whatever medical malady you might pick.  “Better than a migraine” could be interpreted to mean that you’re suggesting the use of your product as a treatment — probably best to stay away from that.  The campaign isn’t derogatory of competitors, doesn’t appear to violate principles of good taste, isn’t gratuitously sexual or obscene and generally doesn’t appear to violate our prohibition on jerk-like behavior.  It appears to meet our three rules.  This one — with each individual installment carefully vetted — might actually meet our tests.  Now, we just have to see whether it sells your product.

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