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Diageo's "peak innovation" belies more selective approach to NPD - Focus

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Yesterday, Diageo presented some of its newer spirits and beer launches to the media in an innovation showcase at the company's London city centre headquarters. In a wide-ranging presentation, Diageo's global head of innovation, Michael Ward, talked about the importance of recruiting new consumers - and keeping current ones - through the group's product pipeline.

One of Diageos newest releases is the American sipping whiskey blend Cascade Blonde, which uses Tennessee water

One of Diageo's newest releases is the American sipping whiskey blend Cascade Blonde, which uses Tennessee water

However, despite innovation's crucial role in fostering growth, Ward, who has been with Diageo's product creation team for the past 15 years, said the company behind such recent launches as the Irish whiskey brand Roe & Co and super-premium Italian gin Villa Ascenti is today launching fewer new products than ever before.

Ward made it clear he doesn't mean that investment in innovation has declined. What he means is that Diageo is more "choiceful" in its number of launches. Maintaining that the Johnnie Walker owner is currently running at "peak innovation", Ward said Diageo is being more selective with the big, consumer-recruiting launches that are the mainstay of its product pipeline. That means releases such as Gordon's Premium Pink Distilled Gin, which came out in 2017, get the care and attention required of a showcase launch, and can be done at a scale that "really matters", Ward said.

"We have fewer of [these recruit launches] but we want them to make a bigger difference," the innovation head explained.

At the other end of the scale, with Diageo's so-called "disrupter" launches, the company is keeping its innovation efforts ticking over. These are limited-scale roll-outs for more experimental products - Ward called them the "yin" to the recruiter launch "yang" and he said they carry the seeds of the company's future growth.

"We are looking at the longer-term opportunities that maybe won't help us next term or next year but, in five or ten years' time, we will say, 'thank goodness we did that'," Ward said. "We want to plant a lot more acorns that can become oaks."

Below is a round-up of some of the newer releases that caught the eye at Diageo's showcase.

Cascade Blonde

This is a new blended American whiskey (see picture above) that Diageo has only released in Michigan and Texas, with distribution further limited to selected cities in those states. Described as a "day-time sipping whiskey" and using Tennessee water, Cascade Blonde is for outdoors drinking, with marketing redolent of camping trips to the Great Outdoors. The whiskey's cork stopper even doubles as a fishing float.

Baileys Delight

The 13%-abv Baileys Irish Cream extension was launched in Nigeria in April and according to Diageo, is specifically targeted at the African consumer. The expression is lighter than regular Baileys so that it can be more easily consumed without ice - a mainstay sometimes lacking in African bars. The extension also contains African honey "for a taste of home", according to Diageo.

Game of Thrones

Diageo's Game of Thrones tie-up has already thrown up some major launches for its Scotch whisky portfolio. Ward described the single malt range that used the various clan names in the HBO sword-and-sorcery epic as "catnip" for consumers as the branded products fly off the shelf. Last month, Johnnie Walker announced new Fire and Ice variants to add to the earlier launch of a White Walker edition.

The group will be keen to keep the partnership going, despite the final season of the series ending last month. Luckily for Diageo shareholders, numerous spin-offs are expected in the coming years that will keep the show's universe alive.

Diageo takes subtle approach to lower sugar amid "seismic shift" in consumer tastes


Expert Analysis

Gin & Genever (Spirits) Market in United Kingdom - Outlook to 2022: Market Size, Growth and Forecast Analytics

Gin & Genever (Spirits) Market in United Kingdom - Outlook to 2022: Market Size, Growth and Forecast Analytics

Gin & Genever (Spirits) Market in United Kingdom - Outlook to 2022: Market Size, Growth and Forecast Analytics is a broad level market review of Gin & Genever market in United Kingdom.

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