As 2014 gets under way, it’s increasingly clear that the delineations among adult beverage categories are no longer, well, clear. Indeed, the blurring of the lines among spirits, wine and beer products is becoming more pronounced as more category-blending products hit back bar and retail shelves.
But the core of suppliers’ “hybrid” strategy is to expand in a slow-growth environment by gaining new occasions and consumers, often by poaching one or both from other categories. These products tantalize consumers, particularly Millennials, with unique flavor experiences. They also seek to break down the barriers amomg categories, introducing consumers to categories they might not otherwise try.
Most hybrid products are overt in going after another category’s franchise or core occasion: Courvoisier Rose blends Cognac with French wine grapes, enticing wine drinkers into the Cognac category. Skyy Infusions Moscato Grape combines vodka with the grape varietal popular with Millennial and urban consumers, looking to take share and occasions from nightlife brands. Malibu Red combines rum and tequila, tapping into the expanding tequila fan base.
While some hybrids actually blend two types of adult beverages, others look to incorporate the flavors and attributes of one type of beverage into another without combining products. Late last month, Pernod Ricard made a play for the wine consumer when it launched Malibu Rum Sparkler, which combines Malibu rum and coconut water infused with bubbles and packaged with a cork. MillerCoors has affirmed that it’s targeting spirits drinkers with Miller Fortune, launching this month. The super-premium brew’s packaging echoes that of spirits bottles, and the 6.9% ABV beer delivers complexity akin to that of brown spirits. Some marketing images portray it served in a rocks glass. Miller Fortune has been described in the press as “bourbon-like” and “bourbon-flavored”; MillerCoors has refuted the notion that Fortune is infused with spirits.
Product innovation drives growth; the New Product Tracker, part of Technomic’s DRINK online tool, recorded more than 680 new introductions and line extensions in 2013, and more than 50 in January this year. More hybrids are undoubtedly in the pipeline for this year, and product innovation is likely to drive excitement for consumers and the trade alike. However, just as we’ve warned of flavor fatigue, we caution that marketers need to be wary of confusing consumers. Today’s imbiber is fairly well-versed in the range of adult beverage products—our consumer insights show that approximately one-third of consumers feel confident in their knowledge of spirits, wine and beer varieties. Even so, education is required to provide clarity around the product and appropriate applications. While the unique aspects of a hybrid might drive trial, unmet expectations or applications that simply don’t work for the liquid will result in a negative experience and will steer consumers away from purchasing the item again. In a slow-growth environment, it’s only effective to take share if you can hold onto it.