A sector in search of the next ice breaker

Whatever has happened to new product development in the alcoholic drinks industry? These days, the acme of invention at Heineken seems to be the “Paco” project, a designer aluminium bottle designed to make the consumption of its beer more appealing in the ritzier bars and nightclubs of Europe.

No offence to the packaging industry, which can play an invaluable role in stamping market identity. No offence, either, to the ultra-conservative Heineken, for signing up a leading French designer, Ito Morabito. But this is not exactly the new category breakthrough, or mould-breaking invention, we have all been waiting for from the drinks industry. The trouble is, no one else in the sector seems to have one either.

All right, you may say, this is beer – a category in long-term decline whose popularity is being gradually usurped by wine. No single invention, even of the status of the Guinness widget (1989), could turn this category around. Furthermore, others have been more active in the field than Heineken. InBev, for example, has developed Brazilian Brahma into a global brand. While another of its subsidiaries, Brasserie Artois – the home of Stella, is spending an astronomical sum on the creation of premium beers inspired by the Artois brewery archives. In any case, beer isn’t really the point: the real thrust of the drinks industry is to be found in the spirits category, and here there is plenty of evidence of life, isn’t there?

Well, up to a point. Diageo, the world’s largest drinks company, recently reported a very decent set of interim figures. However, chief executive Paul Walsh used the upbeat occasion to deliver the following warning: unless the decline in sales of RTDs started to slow, Diageo would have to withdraw marketing investment in some of its biggest markets, and run the category for cash. RTDs, epitomised by Smirnoff Ice and rival Bacardi Breezer, are the industry’s last big idea, dating back to the 1990s.

Understandably, perhaps, Walsh did not go on to reveal where Diageo’s next big idea was coming from. But we can see something of Diageo’s thinking in the large (by today’s standards) budget put behind the launch of Quinn’s. Strictly speaking, this is not another RTD (though it is certainly mixed and ready to drink). Diageo calls it a new category, “fruit ferment”, though a drinks analyst probably got closer in dubbing it an “alcohol-based smoothie”. Quinn’s importance, however, lies not so much in its formulation – which is rather conservative – as in its relatively low alcohol content and the fact that each bottle contains exactly one unit of alcohol. The drink will be primarily targeted at women and is seen in the industry as a timely foil to accusations that it has been stoking binge drinking.

Here, perhaps, we get to an important contemporary truth about the industry. Punitive taxation and the ever more powerful bear-hug of retail have certainly taken their toll, but the biggest constraint bridling innovation has been the increasing need for drinks companies to portray themselves as socially responsible. Most evidently, this new-found social responsibility may be found in the Drink Aware collaboration with the government. But less obvious signs can surely be detected in the tentative, scatter-gun approach to npd; for fear of the industry making itself a whipping boy.