Next month sees Just Drinks’ sister company, Arena International, host the ‘Spirits Strategies & Innovation‘ conference in London. Ahead of the two-day event, we hear from one of the speakers, Tom Stannard, the global head of ‘New to World’ innovation at William Grant & Sons.
Just Drinks: What’s the history of the NTW innovation division within William Grant?
Tom Stannard: ‘New to World’ is relatively recent – I’m only five months in the role, having worked on innovation with William Grant for four-and-a-half years.
About five years ago, the business made the decision to invest in creating new brands to help unlock new consumer opportunities. In that time, we went through a period of ‘test & learn’ – rapid creation and understanding existing market opportunities and whitespace category opportunities. We launched nine brands within that first chapter, which was about understanding the universe of innovation when it comes to new brand creation.
There are two elements to my job: The first is backing the big bets that we’ve created and ensuring they’ve got market runway over the next five years. An example of this is our Discarded brand. The second part is to identify new whitespace opportunities for the future.
JD: Where does the process of identifying a new brand opportunity start?
TS: The great thing about innovation is it can come from anywhere. I’m a firm believer that there shouldn’t necessarily be an overly formal process. Of course, there needs to be a category opportunity that we identify with data. Even more importantly, there needs to be a consumer mega-trend that the brand is responding to. The first port of call is, where’s the opportunity to challenge or disrupt – an established category or an emerging category? Also, what is that consumer mega-trend to turbocharge a new brand’s chances?
In Discarded, we’ve got a premium vermouth [launched in 2018], a premium rum [in late-2019] and a premium vodka [from June] – all categories that are growing. The consumer megatrend that turbocharges our chances here is that the age of disposability is over. We have a zero-waste platform that can take you in any direction when it comes to categories.
Establishing a really firm human truth is the beginning. That then provides the ability to play in strategic categories.
JD: What does ‘test & learn’ mean?
TS: Once we’ve identified a category opportunity, we then work collaboratively in-market on consumer research and get to the stage where we want to test. We identify a key route-to-market, whether it’s an off-trade partner, an on-trade account or a major city, then we get some KPIs together. We’ll give it nine months of testing and be really focused in terms of execution. Every month, we’ll get a report, based on those KPIs. At the end of that process, we’ll get an outcome, which will be either this test has passed, passed with modifications required, or it hasn’t performed well.
The goal of innovation is, of course, to go from beta to alpha. We want to be able to launch these products and succeed. But, 90% of innovation fails. We don’t want to fall at the first hurdle. At the same time, we want to be acutely realistic. listen to what consumers are saying and understand whether an opportunity needs optimisation or we shouldn’t continue with it. That hasn’t happened but, at the same time, we’re ready for every eventuality.
JD: What’s the threshold for moving from beta to alpha?
TS: It’s really difficult to say. It depends on how the test is set up – Is it a big-scale play that involves an off-trade partner, or a small-scale on-trade test in ten or twenty bars? Ultimately, the definition of success is to demonstrate both consumer and commercial appeal.
JD: What kind of NPD hasn’t passed your threshold?
TS: That’s more about a philosophy. We’ve adopted a ‘fewer, bigger, better’ approach, where we really back the big bet, To get to the big bet, you’ve got to have a cutting floor of bets that haven’t necessarily succeeded – and that’s totally normal. The majority of the work takes place on concept development and ratification. With that, you learn a tonne. Philosophically, exploration can stop and never see the light of day because of consumer testing.
Innovation is hard when it comes to supply chain: When you’re testing and learning, you’re creating relatively small batches. Everything that you’re learning from a supply chain point of view is incredibly new to the organisation and exploration can stop or be delayed because of a supply chain issue.
There are two pathways: Is this a viable concept for consumers and is this a viable concept for production? There have been times when either of these have come into play to stop an exploration. But, that’s a good learning.
JD: Outside of William Grant, what spirits NPD have you been impressed by?
TS: I really like the way that Compass Box offers something more curated – it puts consumers in charge. I like when you’ve got an established category and something reframes the way that consumers can pick and choose according to their needs.
No- & low-alcohol is also a big whitespace opportunity, so hard seltzers like White Claw are doing well. A huge trend is emerging in terms of mixing spirits with seltzers.
I’m also enjoying the entrepreneurs who are giving established categories a reframe, such as Irish whiskey and craft distillers. Everything is stacked against entrepreneurs, so I love that heart and drive to create, disrupt and challenge.
JD: What are you working on at the moment? Is ‘sustainability’ your NPD watchword?
TS: My focus is on amplifying the Discarded brand from a sustainability standpoint. The business is doing fantastic work in this area. Sustainability is a blanket theme that everyone needs to react to in a compelling and robust way. From a ‘New To World’ perspective, Discarded is our platform.
My feeling is, when you’ve identified a big bet, you have to double down. Where innovation fails is if you’re too broad-brush. Focus brings real clarity for the proposition to consumers and for brand growth. So, that’s the focus for the short to medium term.
Tom Stannard will be presenting at the ‘Spirits Strategies & Innovation’ conference in London on 20-21 October. For full details of the event, click here.