Innovation Drives Adult Beverage Sales

My colleague Eric Schmidt and I spend a lot of hours tracking brand performance, and while the spreadsheets sometimes blur before our eyes, the brands that always pop out are those notching significant gains. What makes those brands pop and their sales soar? Simple: innovation.

Being innovative today means more than launching a new flavor or redesigned label. Today’s adult beverage consumer is savvy, sophisticated, demanding and easily distracted. It takes more than a pretty bottle or yet another new flavor to capture their attention and their dollars. Granular understanding of your target market is step one toward innovation; step two is identifying the emerging trends, step three is creatively applying new and unique formulation, production, packaging and delivery options.

Step four is to let go of fear of failure. As the adage goes, you never know until you try.

Here are a few cutting-edge wine and spirits products and trends that we see driving volume through innovation:

Unoaked wines—Sure, unoaked Chardonnay is the latest craze and worth investigating by both suppliers and operators. But Constellation took it to the next level with the launch of Simply Naked last summer. The line includes Pinot Grigio, Chardonnay, Merlot and Cabernet Sauvignon, each fermented and aged in 100% stainless steel. The process speaks to Millennials’ interest in simple production processes and flavor authenticity, and the label’s straightforward single grape graphic underscores that positioning. And the price point is attractive. That triple play led the brand to move more than 150,000 9-liter cases in just six months in 2011.

Corn whiskeys—No matter what you call them—white lightning, moonshine, white dog—corn whiskeys scream authentic Americana. The beauty for the producer is the fast pace of production; the appeal to the consumer is the throwback-to-a-different-era vibe and the opportunity to taste the flavor nuances in the base ingredients through the raw spirit. Corn whiskey as a category grew 60 percent last year, and we see both on- and off-premise retailers clamoring for more to satisfy curious customers.

Flavored vodkas—Don’t stop reading! I’ve been covering and tracking this business for two decades and I’ve never seen more innovation in vodka flavors than I see out there right now. Sure, the flavor parade keeps coming, and there are plenty of me-too entries, but with everything from teeth-numbing candy shop varieties to bacon and smoked salmon, retailers and on-premise operators can craft some seriously unique vodka lists. What’s more, by marrying culinary trends and processes into the production, suppliers can explore new opportunities in flavored vodka (and other spirits, for that matter). We see flavored vodka’s share of total category increasing yet again this year.

Wine on tap—Not just for beer anymore, tap systems for wine are popping up in restaurants and retail outlets. And it’s not just the no-name wines coming out of the taps. Production of keg wine is under way at a number of wineries whose names might surprise, such as Au Bon Climat and Qupé. I visited hot spot Paris Club in Chicago last week, and selections from Stone Wolf Vineyard in Willamette Valley were on tap. Across town, Tavernita offers a dozen wines on tap. And it’s not just bars; retailer Whole Foods recently launched its “Old Schoolers” program in its Austin store. Customers buy 12-, 32- or 64-ounce reusable jugs that can be filled by a bartender in the bar area in the back of the store. Winemakers not considering kegging some selections may miss out on a great new delivery format; tap wines spark guest curiosity, reduce waste on several fronts and streamline handling.

These are just a few of the innovations we see translating into or potentially driving real volume and dollar gains. We’re always on the look-out, so let me know what you are doing or what you see out there that is sparking consumer interest through true innovation. Contact me at dcrecca@technomic.com.

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Donna Hood Crecca

A veteran of the foodservice industry, Donna Hood Crecca leads the firm’s Convenience Store Practice and is active in its Adult Beverage Practice. She develops research-based insights and recommendations for leading and emerging supplier and operator companies to enhance their go-to-market and product development programs and strategies.

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