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Future Trends in Alcoholic Drinks: Positioning, Gender and Alternative Financing Models

Deciphering the future of the alcoholic drinks industry tends to take the form of a diatribe on flavour sophistication served with a dollop of packaging gimmickry and a garnish of seemingly highbrow commentary on obscure hops, grapes and botanicals. While discussing such key themes has its merits and deconstructing the industry’s infamous navel-gazing is the only way to understand, expect and prepare for cyclical shifts in drinking patterns, there are also greater, less headline grabbing changes in the overreaching narrative that need to be addressed.

Post-recessionary positioning and promotional campaigns, gender stereotypes and targeting and alternative financing initiatives ranging from crowd funding to incubator investment models are the three most important yet still leftfield megatrends encapsulating the industry’s evolution and –most importantly- they have cross-category relevance.

Positioning, Gender and Alternative Financing

While most analysis currently available is focusing on the evolution of communication platforms and the social media juggernaut levelling the playing field, the subtler yet equally important shifts in the content of promotional campaigns and the positioning of key brands can be lost behind the soaring waves of technological exuberance.

Twitter feeds, Facebook followers and YouTube subscribers are very important indeed but building a brand identity is essential. The message is still as or even more important than the medium and, while the west is still in a recovery position from the Great Recession and emerging nations are facing their own macro-shortcomings, the stereotypical associations of alcoholic drinks brands with superficiality, bling, a guilded or vulgar lifestyle and a celebration of egocentricism are gradually fading. The advance of the concepts of authenticity, craftsmanship, heritage or even charity and social responsibility have been widely if superficially covered and it is the logical conclusion of the shift in public sentiment that followed the unprecedented financial headwinds still hitting the majority of western markets.

Now, as emerging nations’ appetite for aspirational products is finally coming of age at the same time that expectations for infinite growth are put into question from China to Russia , the directional change in aspirational positioning will become global. From Glenfiddich’s sponsorship of the ‘walking with the wounded’ charity supporting wounded soldiers to Chivas moving beyond simplistic fun and lifestyle associations to highlight its ‘timeless appeal’ through tracking the cocktail’s history and evolution, there is change in the air for alcoholic drinks marketing. With China’s crackdown on conspicuous consumption now in full swing, the trend will only accelerate further.

The second major and ongoing debate revolves around gender stereotypes and targeting. While appealing to ever elusive female audiences has been the alcoholic drinks industry’s holy grail for a long while, the maturity-induced shift in gears in terms of innovation brought gender – specific launches centre stage. Its not about merely appropropriating the advertising campaigns along gender defined lines any more- the products themselves appear to be gender-tailored. Mommyjuice wine, Skinnygirl Rtds, Little Black Dress vodkas, Courvoisier Gold and Rose cognac for the ladies and extensions such as Grand Marnier Titanium or Courvoisier C for men are redrawing centuries old category outlines. Such launches do have the potential for an initial boom in sales – primarily on the back of the novelty factor and overwhelming promotional campaigns – but historical perspective is rarely kind to them. From Animee beer disappearing from circulation shortly after its launch to Skinnygirl cocktails currently hemorrhaging sales following their initial explosion, gender-specific innovations across the west tend to eventually backfire. That said, the current boom enjoyed by Baileys in China or Snapp apple flavoured Rtd in Kenya showcase that female drinkers in emerging markets are still receptive to such propositions, at least to a much larger extent than their counterparts across the west.

The third – and potentially most- major pillar of change for the future of the alcoholic drinks industry is alternative financing initiatives as epitomised by the ground up, crowdfunding ethos or the incubator model for business development favoured by entrepreneurs of the technology sector. An example of the first would be Brewdog’s ‘equity for punks’ model – essentially inviting the public to become shareholders- while the second is pioneered by none other than Diageo. Up to GBP1m (US$1.3m) of seed capital – with a maximum initial investment of GBP200,000 – is being made available for select spirits start ups and Diageo would expect an equity stake alongside the option to purchase the business in the longer term.

The potential consequences of such schemes – especially in the context of a rapidly depleting M&A pool and the rising wave of micro-distillers and brewers – are beyond seismic and could signal a watershed moment for the way brands are acquired, nurtured and succeed or fail in the future.

Beyond the cacophony of analysts debating the pros and cons of vodka’s latest dessert-flavoured expressions, positioning, gender and alternative financing will formulate the alcoholic drinks industry’s medium to long term prospects.

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