The Losh Cause – Seeking inspiration
Chris Losh believes that in comparison with many other consumer goods markets, inspired innovation is in short supply in the drinks industry, because of its emphasis on production and a failure to think "outside the box".
Innovation is often the application of something so blindingly obvious that it makes you wonder why no-one did it before. Take the iPod. It's basically a pricy MP3 player but because it's white when all the others are black, and because it's more expensive, it marks out the carrier as someone who's serious about their music. Cue instant Generation X kudos and emotional bond between purchaser and product.
The drinks industry, though, is very bad at such iconic moments of inspiration. Partly because the number of labels available is far larger than in, say, the world of computing or stereos, which makes it tough to make an impact, but partly too because it has been obsessed with production rather than delivery. It has also been particularly poor at thinking outside the box and challenging convention.
Admittedly, much of what people buy into in drink is the idea of tradition, whether it's whisky or wine, and it's harder to challenge convention when you have centuries of brand image. But too often this obsession with heritage is suffocating rather than enlightening.
Alcoholic drinks don't have the inherent obsolescence of, say, IT or electronic goods, and perhaps that's why as a category it's been so poor at hooking in younger drinkers, who are happy to buy one year and discard the next.
Yet what I always think of as mayfly brands - here today, hugely profitable for a short while and then disappearing without trace - can earn as much money in a few years as bigger brands do over decades. Look at Smirnoff Ice et al.
There are, of course, plenty of paradoxes in the way consumers approach drink. They find it confusing, but don't want to be talked down to; they want heritage but not stuffiness; they want education, but nothing too geeky; and they want the illusion of buying a Ferrari when paying Buick money.
But it's a measure of the drinks industry's failure to engage that neither side really understands the other. Consumers are as confused as they ever were, and the brand owners seem no nearer to truly understanding their market. All of which perhaps explains why the Western European wine markets that were booming are now grinding to a halt. Like an ill-suited marriage, after ten years, both parties simply ran out of things to say…
As Alex Anson of UK drinks retailer Thresher puts it: "The wine industry has given up on trying to recruit new customers into the market. We are not seeing anything new on our desks from wine at all."
So what's gone wrong? After all, the caveats mentioned above have always been there, and the lack of energy in the category wasn't so marked a few years back.
The answer might just lie in the consolidation of the supply chain. Very big companies tend to be innately cautious, out of direct contact with the consumer and, crucially, slow. The internet has revolutionised the way younger consumers act, with decisions taken in seconds. It's the reason wine brands like Stormhoek (created in the blogosphere) have been successful. They connect emotionally and directly with their target drinkers, adapting themselves overnight if necessary.
And while consumer behaviour has been moving in one direction, corporate structures have been moving in another. Big companies, wedded as they are to focus groups, market research, meetings and final decisions taken by a central core of managers whose main aim is to avoid getting fired and who never meet a 'typical consumer', simply lack the energy and speed of thought to function. The consumer wants jetskis, the industry is giving them oil tankers.
No, the hope for any innovation, such as it is, must lie with driven individuals in smaller companies. The Sydney Franks and Robert Mondavis of this world: people who broke every rule, but who saw something that evaded everyone else.
It's a sobering thought, but if the giants in the drinks industry had been responsible for their birth, Grey Goose would probably be called something like Petrovka, Mondavi would be told to keep making jug wine. And the iPod would be just another black MP3 player…
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