New routes to market

16 September, 2014

Guest writer David Atkinson of marketing agency, Space, tells us why there is a gap emerging between consumers and spirits brands and how new routes to market must be found.

Drinks giant Diageo is offering to get the party started by sending ‘mixologists’ into people’s homes to create cocktails. For £2,000, the company will supply the expertise using famous brands such as Smirnoff, Tanqueray, Captain Morgan and J&B. If that’s not your style, you might want to drop into the branded bars and bottle shops of new craft brewers such as Brew Dog. For the experimental drinker, specialist on-line off licences, such as Craft 52 will even send you a monthly selection of new drinks to try.

These three different approaches to slaking thirst are all being driven by the same changes within the drinks industry and the consequent need to seek out new routes to market.
Drinks brands are at a crossroads. Traditionally their business has been split between on-trade (pubs, bars and restaurants) and off-trade (off licences, convenience stores and supermarkets) with marketing and communications focused on these twin pillars.

The certainties of these markets, however, have been eroding in recent years. Long-term alcohol consumption is in decline; factor in the growing trend for at-home drinking and pubs struggle to attract customers for much of the week. A relative decline in the importance of wet sales, and a growing reliance on food to drive turnover means a greater focus on creating experiences.

The upshot is that estates are now more protective of their environment. Drinks brands invest millions in producing amazing marketing but they are being hindered at the final hurdle as pubs remove the POS and branded collateral that used to be clinchers at the moment of decision.

And despite the shift to at home drinking, the dominance of supermarkets offering competitive prices and convenience is challenging the off-trade.
Drinking habits are changing as both a cause and effect of these structural changes that are being seen in the market. Alcohol brands that could previously rely on rigid segmentation now have to contend with a more promiscuous, experimental drinker with little concept of brand loyalty.

As the pub, once the community hub, is replaced by drinking outdoors, indoors, at home and on the go, brands need to become relevant by creating a more active and purposeful role that befits drinkers’ mindsets at these moments.
We call this brand intimacy – a state where brands have constructed a relevant, ongoing relationship with consumers that results in them entrusting a brand with a significantly higher share than average of their scarcest, most valuable resources: their time; data; recommendation, and of course, their spend.

To create this more intimate relationship, brands need to refocus on three key moments of truth in the brand/consumer relationship:

 ·        When they experience the brand first hand

·         When they buy the brand

·         When they talk about the brand.

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