COMMENT: Diageo looses its edge
Diageo's withdrawal of Gordon's Edge ready-to-drink (RTD) cocktail highlights the difficulties of entering this market with a new product. The previous success of RTDs based on vodka and peach schnapps suggests that consumers would also be open to the idea of gin-based drinks. However, sales were disappointing and Diageo has decided to cut its losses.
The use of a well known, high prestige spirit such as Gordon's indicates an attempt by Diageo to take the RTD cocktail up-market as the 'alcopop' market is currently seen as being aimed at teenagers. Manufacturers want to target older and more sophisticated drinkers with higher incomes. Gordon's Edge marketing depicted suave, elegant partygoers and was clearly aimed at this demographic. However, the product failed to make its mark as it did not offer anything new to these consumers.
Smirnoff Ice and Archers Aqua offer new and interesting ways to drink the base spirit. Gordon's Edge however was pretty much your standard gin and tonic. A time-honored way of enjoying gin, Gordon's Edge did not give the consumer a pressing new reason to drink it - why not order a gin and tonic exactly to one's taste?
The RTD market is extremely competitive and even established brands have to continually refine their marketing and advertising in order to be sure that they are staying relevant to consumers' desires.
Gordon's Edge was not correctly positioned in the market and consequently did not attract a core group of consumers. By contrast, Archers' RTD is firmly targeted at 18-24 year old women, and has carved out a secure niche in the market.
Diageo claims that the reason for weak sales was, in part, the possibility of increased tax on RTDs in the UK's recent budget, which it says made publicans and off-licenses uncertain. Far more of the responsibility, however, lies with Diageo's failure to provide a core group of consumers with a reason to buy their product.
Related research: Datamonitor, "Young Adult Consumption Behaviour" (DMCM0352)
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