Why the next innovation in drinks won’t be a drink – Comment
A thought leadership piece arguing the next drinks industry breakthrough will be non-product innovation — directly validates the BevTech thesis and is highly motivating for founders building tech and services around beverages.
Why does this matter?
A thought leadership piece arguing the next drinks industry breakthrough will be non-product innovation — directly validates the BevTech thesis and is highly motivating for founders building tech and services around beverages.
Highlights
For years, drinks innovation has mostly meant putting something new inside the bottle: a fresh flavour, botanical, limited edition or twist on something consumers already know. Which is why I was interested in what Diageo has been saying recently. Under new CEO Dave Lewis, the British multinational’s strategy talks about building a “full price and format ladder” and serving consumers across a wider range of occasions. In July, it also launched ‘Small Bottles Made for Big Plans’ (below) in the UK, giving 20cl and other smaller formats more visibility across 230-plus stores at supermarket chain Asda, with Tesco and Sainsbury’s to follow. On the face of it, this is a story about smaller bottles. But there’s a more interesting idea underneath it. Maybe brand owners don’t need to spend quite so much time inventing new liquids? Maybe there’s more growth to be found in changing the way existing ones fit into people’s lives? After all, lack of choice is hardly the problem. Gin is the obvious example. The rise of pink gin led to flavoured gin, then increasingly exotic-flavoured extensions, until shelves were packed with different versions fighting for broadly the same drinking occasion. At some point, another flavour stops feeling particularly new. That doesn’t mean liquid innovation has run its course. Over the past decade, IWSR estimates, innovation contributed 55% of the US$231bn of value added to beverage alcohol. But there are other places to innovate. Start with the bottle Diageo’s small-format push is a good example. Why does a bottle of spirits have to be 70cl? A smaller bottle costs less to try, involves less commitment and makes sense for people who still want a drink but don’t necessarily want a full-size bottle in the cupboard. There’s evidence of that shift already. In the US, individual small-format alcoholic drinks are now a $670m business and grew 16% last year. NIQ found nearly half of small-bottle buyers mentioned affordability, while more than 40% pointed to portion control and occasion suitability. Gallo is seeing something similar in wine. Its 20cl Tetra formats have become its fastest-growing pack size by dollar sales growth. Think about the moment Kocktail is interesting for a similar reason. Its new Kocktail Glass (above) puts 10cl of a premium premixed negroni, margarita or old fashioned directly into a reusable drinking glass. Add ice and a garnish and it’s ready. The cocktail obviously still has to taste good. But, what the UK-based small-batch brand has really done is remove some faff. You can have a decent cocktail at home without buying several bottles, measuring everything out or wondering where the cocktail shaker went. Last year, according to IWSR, global RTD volumes grew by 3%, while every other major alcohol category declined. It also argues that successful RTDs increasingly need a clear job to do, whether that’s at a barbecue, on the beach, before going out or when you want a high-quality cocktail at home. Brands often begin with, 'What can we make?' Perhaps the better starting point is, 'Where are we useful?' Create conversation Then, we have Sazerac Co's BuzzBallz RTD brand and its tie-up with Pop-Tarts. The pair have been partnered for two limited-edition, 15%-ABV cocktails inspired by Frosted S’mores and Frosted Brown Sugar Cinnamon Pop-Tarts. Is the world crying out for a Pop-Tarts cocktail? Probably not. But that’s beside the point. The pair tap into 1990s nostalgia, offer Millennials something instantly recognisable and make their launch something that consumers might actually send to each other. London-based independent brewery Signature Brew is doing something different with its new lager, Do It Right, created with electronic music duo Groove Armada and regenerative farming business Wildfarmed (above). Here, beer becomes a way into music and regenerative agriculture. In an aisle that's already full of perfectly acceptable drinks quality-wise, sometimes the story around the product earns the first bit of consumer attention. Perhaps the product isn’t the starting point Recent Ipsos–IWSR research suggests people are becoming more intentional about when, where and how they drink. At the same time, social connection and memorable experiences remain important reasons for drinking. People might be drinking less or drinking more selectively. They haven’t suddenly lost interest in seeing friends, going out or having a good night. Another gin flavour might technically be new. But does it give someone a new reason to buy gin? Perhaps the bigger opportunities are more practical. Make the bottle smaller, so I can afford to try it. Make the serve easier, so I can have it at home. Put it in a format that fits the occasion. Connect it to something I already care about. For a long time, drinks innovation teams have essentially been asked, 'What new drink can you create?' The more useful question nowadays would appear to be, 'Why would someone choose this drink tonight?' Head here for more alcohol marketing commentary from Chris Tyas The post Why the next innovation in drinks won’t be a drink – Comment appeared first on Global Drinks Intel.
Source: Drinks Intel
