We hear a lot about the changing consumer, but what exactly are they changing too was what Alex Ririe of The Collaborators looked to answer during the recent One Step Beyond webinar.
(You can click below to watch the full recording of the One Step Beyond webinar)
Consumer. Innovation. Technology. Strip back the last year of Covid-19 and all the disruptions, lockdowns, opportunities and challenges it has brought and these are the three factors that have driven the bulk of business decisions made since the pandemic struck in the first quarter of 2020.
Quite in what order, and to what degree those factors have been important to you, will have determined how your business has responded to Covid-19 and what sort of position you are now in to capitalise once the economy fully opens up again.
But then that is easier said than done. How do you know how well your business has reacted if you only have your own figures to go by? How do you even measure innovation and technology in your business in the first place? What yardsticks do you use?
The One Step Beyond events are designed to answer some of those questions, or at least help you know where to look, and what to benchmark yourself against. To do that we work with our partners to create the right level of content, using insights from experts who sit mainly outside the drinks industry, to give an insider’s view on how other sectors are talking and selling to their consumers through innovation and technology.
Partners that include the Wine & Spirit Trade Association, Pix, the new breakthrough wine discovery and search platform, brand owners Freixenet Copestick, and design and branding experts, Stranger & Stranger. Together, in 2021, we will work on hosting a further three webinar events, and a live event in the last quarter of the year.
Lockdown trends
The first One Step Beyond webinar looked to do two things. Analyse just what have been the big changes in consumer behaviour during a global lockdown, and how has data and technology changed the way of doing business for us all, now and in the future.
Over the coming weeks we will be sharing insights from each of the sessions that included:
- Paul Mabray, chief executive: ‘2021: The Golden Age of Wine Online’.
- Michael Becker, chief executive, Identity Praxis: The Phygital Economy – factors reshaping today’s marketplace and how to engage and serve the future personal data empowered, digital savvy, ‘phygital’ individual’.
- Lucy Auld, marketing director of Freixenet Copestick and Kevin Shaw, founder, Stranger & Stranger: Debate on the changes in consumer behaviour and expectations and the big challenges and opportunities for brands in tackling them.
First up we turn to Alex Ririe, director of strategic brand consultants, The Collaborators, and what she sees as the key macro consumer trends impacting the drinks industry and how businesses need to respond to them.
In a nutshell they are:
- Virtue of values: where consumers are looking for brands with a genuine purpose.
- Climate diets: changing how we live our life to help the planet.
- Health and wealth: putting our bodies and our minds first in how we work, live our lives and the products we buy.
- Living our life online: how lockdown has pushed us even more online and living in a parallel digital world.
Whilst these are not new trends in themselves they have each become more entrenched during Covid-19 and the wine industry, claims Ririe, “is not doing enough to respond to them”. “It is really going to be critical to the future of wine to do something about them,” she adds, however “melodramatic it might sound”.
Across the board consumers are willing to “make sacrifices for the greater good” when it comes to what they put in their bodies and spend their money on, she explains. “They are ditching things that at some point in their lives they would never have imagined they could live without.”
But what, she asks, is the wine industry doing to make itself appealing to this ever increasing consumer group? If it doesn’t wine runs the risk of losing consumers to other products that look like wine or “serve a similar purpose or occasion…and do it better”.
(Click her for Alex Ririe on why drinks industry needs to attract consumers looking for brands with a purpose)
Take the “Virtue of Values” issue. Consumers are voting with their feet and wallets towards brands and services they can trust and believe in. Edelman research, says Ririe, says people are now more trusting of certain businesses than they are of their government and that half of consumers want to see brands getting involved in at least one social issue that does not directly effect their business.
Crucially, she says, this can’t just be seen as a “marketing bolt-on, but needs to be leadership driven and part of the [brand] culture in order for it to become a competitive advantage”. “It’s about action, not declaration.”
Having a purpose as a brand or a business is now key for overall success, says Ririe
Done well and it can have a real impact on the business’ bottom line. She points to Kantar research that shows brands that are recognised for their high commitment to social issues (a ‘purpose’) have grown more than twice the rate of others. Look at what the likes of UPS, Google, WalMart, Nike have done.
It’s how smaller, what she calls “challenger” brands have been able to come into product categories and take on the category leaders. Be it Brewdog in beer, Tesla in cars, Tony’s in chocolate, Tito’s in vodka. Now all established brands in their own right in those sectors.
It’s why we are seeing so many brands in other sectors look to acquire B Corp certified status, the increasingly international business standard for the actions they are taking to be fully sustainable and environment business through their supply chain but also with their people too.
This is now filtering down to consumers with Ocado introducing a “B Corp Aisle” that allows its shoppers buy products they know come from B Corp approved manufacturers and suppliers. But of the close to 4,000 businesses, across 150 industries, and 74 markets less that 1% are from the drinks sector, stresses Ririe [Concha y Toro has this month announced it has acquired B Corp status].
Tackling the climate
The key area where the drinks industry, and particularly wine, can make a big step change with consumers is around climate and the increased desire amongst people to do what they can to help the planet – 64% of Brits want to reduce their carbon footprint, according to YouGov, she says.
Key to that is making changes to what we eat drink and adopting “climate diets”. As an industry the drinks sector needs to be aware that major FMCG manufacturers, noticeably Unilever and L’Oreal, have pledged to put the carbon footprint of each of their products on pack in the coming years. The government is set to start consultation on carbon footprint labelling as part of its environmental drive.
As a result we’re going to see consumers scrutinising labels and packs even more for what they can tell them about their carbon and environmental impact, she adds.
(Click here for Alex Ririe on the options for drinks brands & wine to use technology for more sustainable packaging)
Which raises the issue of whether the wine industry should be putting the vast majority of wines in a glass bottle. Even some of the alternative formats, like cans, have issues of their own, with the average can having double the carbon footprint of a plastic bottle, claims Ririe.
“We have to expand our definition of what wine is,” she adds and look to champion areas of wine that in the past have been looked down on, like Piquette, the low alcohol wine alternative that is made from adding water to left over grape skins.
Wine can, as always, take inspiration from other drinks categories, with Ririe picking out Bespoken Spirits which uses new technology to speed up the barrel ageing process to just a few days – and remove the loss of spirits through the ‘Angel’s share’.
It might sound “horrifiying” to the spirits purist but means it can offer almost endless variables of spirit styles for customers all looking for their personal – or bespoke spirt – whilst making big environmental savings at the same time. Its view is that it can use “sustainable science and technology” to “re-imagine and replace antiquated wasteful barrel ageing processes”.
“Isn’t it time the wine industry makes a virtue out of things that might have previously been dismissed? It is time for Tetra-Pak to finally take off.”
Spirits, beers and some wine brands are looking at non glass packaging formats, says Ririe
She points to the Just Water brand that is made from 100% recyclable packing made from paper and plant based plastic. Or Johnnie Walker whisky that is launching a plastic free paper bottle this year. In wine there is the Frugalpac bottle that is made from 94% recycled paper and a food-grade liner for the wine to sit in. At 83g it is also five times lighter than the average glass bottle.
Then there is the increasing return to re-use schemes and services where drinks containers can be re-purposed – like with Borough Wines’ bottle return scheme that it is now offering the on-trade where it will collect bottles and then re-supply them. Potentially up to 30 times per bottle.
The Loop re-use scheme works with major brands, such as Haagen Dazs, Ariel and Nivea, to create branded products where customers can order refills or re-use the packs. It has now noticeably signed a partnership with Tesco.
Health is wealth
The drinks industry still needs to do more around the growing trends of health and wellness. Yes, it has responded with a wide range of low and no and skinny products, but she feels there is room to be more innovative.
The key here is that ‘wellness’ means lots of things to different people so there are lots of options to take. For wine it could just be a change in the way you talk about wine.
Look at what Cameron Diaz has done with her so called “clean wine” brand Avaline. It is still made in largely the same way as so many other wines, it has just been positioned differently – using “marketing spin” to “play to wine’s strengths in the context of wellness”.
Yes, to the wine trade it is arguably “a bit disingenuous” in the way it talks about the brand, but the key is it’s using language that consumers understand and relate to.
Sufferfest beers are tapping into the desire to look after ourselves physically but also enjoy ourselves at the same time
Other drinks categories are using the lack of sugar as a selling point – which has been common in soft drinks for some time – or the fact it is using healthy botanicals and herbs in the product – like Sufferfest beers aimed at runners and athletes as it is full of potassium, electrolytes and magnesium and beer pollen.
Wildlife Botanicals is a 0.5% abv English sparkling wine that claims to be “bubbles with benefits” that is “infused with an uplifting elixir of vitamins, minerals and botanicals” that make up 15% of your daily recommended amount.
Then there is the growing number of drinks that claim to have taken the alcohol out and replaced with adaptogens and CBD-based drinks to give you a natural healthy lift – take a look at what Three Spirit Drinks and Edi Spirits (Endorphin Dealer Institute).
Ririe also pointed out what she describes as “debit, credit” drinks that are good to drink after a workout, or yoga. Like 26.2 Brew from Boston Beer Company made from Himalayan sea salt and coriander and 120 calories. Or digital detoxes that are taking place online or wine retreats that offer wine tastings alongside spas and yogas and wellness classes.
Life Online
(Click here for Alex Ririe on DTC retailers and brands that are offering a next level of service and offer online)
Finally Ririe tackled what she billed as our “life online” which we have all turned to like never before in the last year. She says that whilst direct to consumer is a great new opportunity for brands and products, it is also a big threat to wine and spirits in restaurants and hospitality as we have all become so much more used to having prepared food delivered to us. How does the drinks industry fit into all of that?
The best DTC brands and retailers are offering far more than just their products to buy online. Like Move in the US which is billed as an ‘artisan’ site that is very open and transparent about each of its suppliers, how they make their food and drink and how much they get paid. Each brand comes with its own mini documentary about how it is made and the people behind it. Each member has a personal shopper to help you pick out the right products and explain them more to you.
She also picked out Bubble “The Transparent Food Marketplace”, which specialises in ethical and wellbeing products, and takes this personalisation approach to the next level. It allows users to shop “with a purpose” and for very specific needs be it around diets or values or supporting black and diverse producers. It has its own wellness experts who “curate their selections”.
Taking online to the next level
The opportunity for restaurant operators and brands is how they can use technology and argument reality to take their offer and level of service to another level online. She points to how Domino Pizza is now allowing customers to create an augmented reality image of what their pizza is going to look like before they order. Tiger beer created a virtual street for its Malaysia customers where you could have your own avatar walking along and choosing food and beer from AR food and beer stands and have it delivered.
They might look good but you can’t eat them. Augmented reality brings food to Instagram…
Finally she says the world of DTC has now got to the stage where people are spending serious amounts of money to buy products that only exist in a digital world. Check out Fresh Hot & Delicious augmented reality restaurant that offers digital desserts on Instagram.
Someone in the US, she says, has just spent $500k on a virtual house. A designer collection of digital furniture sold within 10 minutes of it going on sale. Closer to the high street and Gucci is allowing users to create their digital pair of trainers that you can ‘wear’ in your digital world.
Now clearly these a long way from what me might to order from a winery, or through Deliveroo but it illustrates how fast and how far we are all now living our lives online and it won’t be long before someone creates a virtual vineyard or wine store, says Ririe.
- If you would like to follow up with Alex Ririe on any of these trends and how The Collaborators might be able to help you with your brand or business strategy then you can do at her email her at alex@thecollaborators.com and then on social media at @alexririe, @thecollaboratorsuk and its website, www.thecollaborators.com.
