Speaking at the company’s Customer Collaboration Centre in London today (23 March), Andrew Cowan, managing director of Diageo UK, said the company is “stepping up” its innovation pipeline and “taking brands to the next stage” by refreshing some of its current trademarks and introducing new brand categories in an effort to “make brands available to all people on all occasions”.
The innovations will span across the company’s Guinness, Smirnoff, Pimm’s, Captain Morgan and Ciroc brands and will roll out throughout the spring and summer as part of the company’s goal of having 20% of its business come from innovation, a target it claims it has already reached within its premium Reserve brands. Currently, innovation accounts for 13% of its overall business.
It is also an effort to close the gap between the performance of spirits in the UK compared to the US, which is leading with 37% of total alcoholic drinks served coming from spirits compared to 27% in the UK.
Diageo says it accounts for 32% of spirits sold in the UK and leads the premium category. It saw its net sales increase by 2% in Great Britain in the six months to 31 December, success that was largely driven by its portfolio of reserve brands.
The company now hopes to see spirits and cocktails become the “next revolution” in the UK.
Cowan told Marketing Week: “If you look at the cooking and baking revolution in the UK driven by Jamie Oliver and The Great British Bake Off, we see spirits and cocktails becoming the next big consumer shift.
“The US has gone after cocktail culture while the UK has traditionally been more about wine and beer. But we’re innovating and promoting more. There’s no reason we can’t be a leader.”
Louise Robinson, head of GB innovation for Diageo, told Marketing Week that one of key challenges the company is looking to tackle through its new launches is accessibility.
In April it will launch Guinness Golden Ale, an effort to bring new customers to the brand.
“Guinness has had accessibility problems,” Robinson says. “It has been limited to certain occasions and consumers, but the portfolio is starting to expand and grow. There could be different ways to stretch the brand.”
Cowan added that when expanding one of its core brand’s portfolios, the company ensures the innovation compliments the whole brand.
“If you look at what Guinness stands for, it’s “Beer Made of More”,” he said. “It has to have product credentials.”
He added that the company hopes the launch of Pimms-infused cider will lend attention to the entire Pimm’s brand and allow new consumers to discover the entire portfolio.
Expanding the definition of innovation
The company has historically defined a product as an “innovation” for its first five years.
“By then, the brand has usually either established itself or gone through its life span,” Robinson says.
The company recently launched a special edition Pimm’s Strawberry, which Robinson says will only return it if is a success. However, she added that the company could see the likes of Captain Morgan White Rum, which is set to launch in April, becoming a strong and permanent fixture.
“We’re moving to be less precious about the five-year opportunity, particularly with flavour extensions,” she added. “You need to be able to provide news each year.”
Diageo spring and summer innovations:
Guinness Golden Ale
- Launch: April 2015
- Category: Premium Bottled Ale
- Proposition: Answer demand for beers with more taste
- Following: The launch of Guinness West Indies and Guinness Dublin Porters in September 2014
Pimm’s Cider Cup
- Launch: April
- Category: Fruit Cider, which is seeing consistent growth
- Proposition: Make the Pimm’s family more accessible and create “Cider 3.0” featuring a spirit
- Goal: Potential sales opportunity of £14m across total trade
- Campaign: £1.1m ATL support with comms, PR and events
Pimm’s Strawberry with a Hint of Mint
- Launched: Earlier this month
- Proposition: Exploding the Pimm’s family
Captain Morgan White Rum
- Launch: April
- Proposition: Target declining white rum segment and build spirits market
- Campaign: Seven figure through the line campaign
Frozen Pouches: Pimm’s Summer Crush and Gordon’s Frozen Cooler
- Launch: This month
- Proposition: Bring established trademarks into new categories to reach older consumers
- Follows: The launch of Smirnoff and Parrot Bay frozen pouches
- Campaign: £1m spend on ATL for each, supported by PR and influencer campaigns
- Goal: £30m in retail sales of frozen pouches by 2017, currently £15m
- Launch: This month
- Proposition: Going after Grey Goose
- Campaign: Four times more investment than any other flavour previously
Smirnoff Ice Double Black
- Launch: Beginning of April in GB
- Category: Ready-to-drink category, which is in decline
- Proposition: Revitalise category and brings back drinkers under 24, who are moving to fruit ciders, cocktails and beers, as well as men
- Campaign: £1m ATL campaign