Focus - Flavour revolution spurs Diageo cocktail culture
Diageo's J&B Manhattan to launch in Spain
A new generation of flavourings is helping Diageo's scientists to match the quality of bar drinks with pre-mix cocktails that target a consumer shift to at-home consumption in recession-hit Western markets.
So-called "ready-to-serve" (RTS) cocktails are dominating Diageo's research and development agenda as it looks to maintain sales across Europe and North America by reaching out to stay-at-home consumers.
The drinks giant is this month introducing bottles of J&B whisky Manhattan in Spain and Pampero rum Mojito in Italy and Portugal, following up on a spate of RTS cocktail launches across key European markets in 2009.
For the handful of scientists at Diageo's R&D centre just outside London, the mission is simple: mix cocktails that can continuously beat a 'best-in-class' bar serve for 12 months and that can turn a profit.
Fresh ingredients are out, because they rot too quickly, so the company's testing lab is littered with pots containing every flavour from wild strawberry to orange zest to toffee. Leave your cocktail shakers at the door, this is all about pipettes and measuring cylinders.
Product innovation manager Fionnola Geaney said that technical advances by flavour companies have laid the foundations for Diageo's RTS cocktail strategy.
"We have seen massive improvements in the last few years," Geaney told just-drinks during a visit to Diageo's R&D site last week. "Ten years ago, we would never have thought about doing anything that would be better than what you could get at the bar," she said.
There are, however, still gaps in the armoury. "A stable citrus flavour is the Holy Grail," Geaney said. "Every single layer is volatile. Even when you buy a cocktail with fresh lime at the bar, by the time it's at your table, layers [of flavour] have disappeared."
Work by Geaney and her colleagues could prove crucial to Diageo's sales performance in Europe as the region faces the threat of double-dip recession and the possibility of economic stagnation for the next few years.
Diageo has built closer relationships with retail chains, such as Carrefour, Tesco and Metro, in order to prop up sales by reaching the growing number of cash-strapped consumers choosing to drink at home instead of in bars.
"At-home drinking is something that we can own in a much bigger way," said Diageo's president for Europe, Andrew Morgan, in a conference call last month. "We are not prepared to accept that we can't grow our sales in Europe in the next few years," he said.
The RTS cocktail market is likely to play a big part in the company's plans, as it will for several of Diageo's rivals.
"In the last year, there has been a big increase in the amount of innovation around the RTS area," according to a IWSR/just-drinks review of the global ready-to-drink beverage and RTS cocktail markets.
"This has been marked by the arrival of new flavours and new packaging concepts," said the review, published on just-drinks yesterday (5 July).
In this, the final part of just-drinks' review of 2010, Olly Wehring takes a look at what made the wine headlines this year....
Our penultimate part of the 2010 review of the year affords our spirits commentator, Richard Woodard, to look back at the last 12 months for his specialised subject....
With the end of the year looming, just-drinks is running a series of 'Top Tens of the Year' in the run-up to Christmas. Here are the ten most read interviews on just-drinks in 2010....
With the end of the year looming, just-drinks is running a series of 'Top Tens of the Year' in the run-up to Christmas. Here are the ten most read comment pieces on just-drinks in 2010....
Speculation has started circulating this week that Diageo may be looking to snap up Turkish spirits company Mey Içki from private equity firm TPG Capital. While Diageo won't be drawn on the rumours, a...
French luxury goods giant LVMH Moët Hennessy Louis Vuitton has upped its stake in rival Hermès International, although Hermès family shareholders remain determined to block any possible takeover attem...
With the end of the year looming, just-drinks is running a series of 'Top Tens of the Year' in the run-up to Christmas. Here are the ten most read news stories on just-drinks in 2010....
- Focus - Pernod's YTD Performance by Region
- Comment - Will We Understand the Language of Rum?
- Focus - Heineken's Q1 Performance by Region
- just On Call - Pernod shifts Scotch focus in China
- just The Preview - Pernod Ricard's Q3 & YTD
- CFO of Diageo's United Spirits stands down
- Pernod Ricard sees YTD recover as sales increase
- Remy Cointreau US head to step down
- BrewDog launches GBP25m crowd-funding attempt
- Africa "subdued" but Heineken sees Q1 rises
- Global Tequila insights - market forecasts, product innovation and consumer trends research
- Global rum insights - market forecasts, product innovation and consumer trends research
- Diageo plc (DGE) - Financial and Strategic SWOT Analysis Review
- Bacardi Limited - Strategy and SWOT Report
- ALDI 2015: Radically transforming Anglo Saxon grocery markets