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Looking for gold at the end of the rainbow

It's nearly sunset when Gilles Ouellette, an executive at Bank of Montreal, gathers with colleagues at Toronto's Buddies in Bad Times Theatre.

The bank is a sponsor of the evening's event, which is raising money for a summer camp for the children of gay parents. In their serious business suits, Ouellette's party might seem a tad out of place at the country's premier gay entertainment hub, but they're as engaged as anyone.

On stage, comic Jim J. Bullock is hosting a mock game show, asking contestants to complete his sentences. "The new Captain Kirk makes me want to set my phaser on …" he says, as Ouellette chuckles. The raunchy comedy sketches go late into this May evening, keeping the bank execs laughing through to curtain close.

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Welcome to the world of rainbow marketing, a trend that on the surface resembles pink-ribbon marketing, which brands products in support of breast-cancer research. In this case, using the rainbow symbol is more about tapping into a lucrative market - one estimate puts its annual buying power at $100-billion - than supporting a cause.

During this week's Pride festivities in Toronto, mainstream companies were proudly flying the rainbow colours, ymbol of the GLBT (gay, lesbian, bisexual and trans-gendered) community, in billboards and ads. Heavy hitters included TD Canada Trust, retailers Winners and HomeSense, and liquor maker Corby Distilleries. Even an Ontario winery is displaying the rainbow, on a new wine it calls Chardonngay ($1 from every $19.95 bottle sold goes to AIDS research).

"Gay people have better than average taste in wine and they have a lot of disposable income to spend on wines," says Daniel Lenko, owner of his eponymous winery. "It might look a little bit campy or a little tongue in cheek. But a lot of people are waking up and saying, 'Hey, these people have been ignored as a potential sale. Let's get our heads out of the sand and do something about it.'"The efforts can pay off handsomely. According to the Canadian Gay & Lesbian Chamber of Commerce, the GBLT demographic is estimated to have the collective buying power of about $100-billion a year, just under 10 per cent of that of the total population (the chamber estimates they make up 7 per cent of the population, though official estimates are lower). The organization says these consumers have a higher discretionary income than others, partly because they often don't have children to support. In the United States, 35 per cent of them enjoy a household income of more than $100,000 (U.S.).

Catering to the gay community isn't without risk, however. Non-gay customers may be offended by an overtly gay pitch, while gay consumers don't necessarily appreciate the patronizing symbolism of rainbow flags.

"I call it dipping a toe in the water," says Shaun Proulx, a host on Toronto radio station PROUD FM and a gay activist. "The companies do something only at Pride, for the most part."

He finds the concept of a gay-identified wine a cliché, although he gives the winery credit for trying to draw gay customers. Getting businesses to see past stereotypes takes time, he adds. "It is a very slow thing and it is going in the right direction. But like anything in the gay movement, it's a long process sometimes."

Rick White, vice-president of marketing at Bank of Nova Scotia, recognizes the pitfalls of navigating the rainbow waters.

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"Yes, you will offend some people, but generally I don't think anybody will complain about that," White says. "Frankly, as an advertiser, I think it would be great if we could do a lot more. In our advertising we depict a wide range of diversity. I haven't done a commercial yet with two guys or two gay women. That, I think, will come sooner rather than later.

"How well will that be accepted? Probably we'll take some flak, but I still think it's something we'll need to do. It's certainly time. It's overdue."

Lenko felt the time was right for a gay brand. A growing number of his customers are gay; one of them came up with the name, initially in jest. Wine critics paid more attention to Chardonngay than the same wine bottled under a generic label. Lenko says he is hitting his sales targets, and plans to stock the brand year round.

To try to avoid being patronizing, Scotiabank has evolved from running ads for mortgages in gay publications to sponsoring gay-related causes such as the annual Scotiabank AIDS Walk, White says. The thinking is: "Let's be active within the community, among events and causes that they care about. Let's be genuine about that."

Corby, whose Polar Ice is a hot seller in gay bars, follows a similar strategy. During Pride Week it sponsors contests at restaurants, and it runs an annual design contest for a special-edition Polar Ice bottle: $1 from the sale of each (to a maximum $50,000) goes to the Canadian AIDS Society, for which it has raised more than $105,000 from an array of activities over the past year or so.

"It's not about trying to come in for one week of the year," says Daniel Lundberg, a Corby brand director. "It's about partnering with the gay community for the whole year."

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The distillery appears to be profiting from the partnership. Polar Ice has jumped to the third-ranking vodka brand in the country, from No. 5 just five years ago (while the brand's sales rose 3 per cent in Ontario over the past three years, they jumped 12 per cent in the Church Street gay district).

The travel industry is also courting gays. Last December, Air Canada Vacations started to offer gay-friendly packages; according to a 2007 study conducted for the chamber of commerce, these consumers spend an average of $1,166 per trip, nearly twice as much as their straight counterparts.

Via Rail's research has found that gays are frequent train passengers to Toronto and Montreal. So it's no coincidence that Via helps sponsor the annual Friends for Life Bike Rally from Toronto to Montreal and provides free return transportation for hundreds of bikers. "Overall, our efforts within the LGBT market make business sense," says Darrell Schuurman, Via's manager of market development.

But the banks remain the biggest rainbow marketers. Toronto-Dominion Bank began sponsoring Toronto's Pride Week five years ago, figuring that making a very public statement in the community would help its own employees feel more comfortable coming out of the closet. Today its marketing goes beyond that community, even featuring same-sex couples in its ads.

Last summer, Bank of Montreal hired well-known drag queen Enza Anderson to work at its new branch on Church Street in the heart of the gay district. Proulx, who does his banking there, appreciates her presence. "That to me is a year-round constant attempt at connecting and being part of the queer community."

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About the Author
Retailing Reporter

Marina Strauss covers retailing for The Globe and Mail's Report on Business. She follows a wide range of topics in the sector, from the fallout of foreign retailers invading Canada to how a merchant such as the Swedish Ikea gets its mojo. She has probed the rise and fall (and revival efforts) of Loblaw Cos., Hudson's Bay and others. More

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