Innovative Branding for Alcoholic Beverages

alcohol brand innovation

Did you ever think there would be a time that a hard seltzer would outsell craft beer? Last year, White Claw hard seltzer surpassed every alcohol beer on the market. It’s tempting for other brands to produce a me-too product. It’s better to understand why an innovation succeeds than simply copying it. A deeper understanding of consumer motivations and their brand interactions across several categories – what we call an interaction field – will result in more disruptive, relevant, and sustainable innovation.

White Claw’s communications try to make it clear that they are THE beverage of choice for younger drinkers. But their success isn’t only the marketing – it was really the market insight.

White Claw catches several waves of shifting consumer mindset. It mirrors the move in soft drinks from synthetic fizzy drinks to carbonated water. It uses natural fruit flavours, and it’s low in sugar.

It’s effective. It has hastened the decline of alcopops and it has taken share from light beers. According to IWSR, by the end of 2019, hard seltzers were already larger in terms of volume consumption than the entire vodka category in the US[1].

The trends towards simple, healthy, natural and light are already well developed in food and fashion. White Claw’s success is aided by these adjacent categories. The messaging and social reinforcement that will come from other brands – as well as customers and influencers – in advocating these attributes across categories – will make White Claw feel like the drink of a generation.

These interactions between categories and consumers in forming and reinforcing trends are one aspect of what we call ‘Interaction Fields’. Multiple touchpoints, across multiple brands in multiple adjacent and non-adjacent categories define modern customer experience and shape perception. Successful brands must be distinctive but they cannot stand in isolation.

Now, nearly every big-name beverage brand has launched, or is planning to launch, their own hard seltzer. When a new sub-category emerges, it’s understandable that established brands would respond with me-too products. It’s a predictable move but, in a category that is often rife with clichés, this is itself also a cliché.

Emulation is not innovation. Businesses and brands should aspire to lead. Just copying White Claw is looking at it through the wrong end of a telescope. The business innovation challenge is not ‘how do we make a similar product?’ but ‘how do we develop a similar level of insight-driven innovation?’

A Sea of Change in the Beverage Market

According to WiseGuyReports, the global market for the alcoholic beverage market is expected to grow at 4.09% (CAGR ) over the next six years. The array of choices available to today’s consumers makes it much harder for alcohol brands to fight for their attention. People live their lives differently today than they did even ten years ago. They’re checking out the labels and making sure the ingredients used to create the product don’t conflict with their ideals.

Crafting an effective alcohol brand experience for customers involves building interaction fields that speak directly to them, finding opportunities to add or create value at every point in the customer journey. There should 360-degree engagement between the brand, the customer, and other stakeholders. How can a brand consistently bring value to customers and to its broader ecosystem? Thinking of brands as a platform for interaction, engagement and experience should be at the top of everyone’s mind when crafting strategies for alcohol brands.

This kind of platform thinking helps brands create a consistent architecture for sensing and learning about the needs of customers. Considering the entire interaction fields between consumers and brands allows businesses to innovate beyond products to create entirely new categories of customer experiences.

Let’s look at how interaction fields work and then examine some different ways of applying this approach to create new and stronger brand connections in line with the social, cultural and market trends shaping the beer, wines and spirits (BWS) sector.

What Are Interaction Fields?

Think of interaction fields as a way of encompassing an entire experience ecosystem for consumers. Each interaction should build equity for the brand and create value for the consumer and do the same for ecosystem partners and adjacent businesses. Thinking in terms of creating and shaping interaction fields helps marketers see beyond their latest communications strategy and to encourage, enable and equip consumers to build their brands into their lives.

You see all the potential links between customers and the different ways they interact with the world. More importantly, you gain a better understanding of their needs within the current marketing environment, which helps you create more agile business and brand strategies.

The consumer should be the key consideration in any interaction field. However, interaction fields also help you see the connections between brand products, vendors, and even those producing the raw materials. Interaction fields describe how your own commercial network can meaningfully combine with your consumers’ social, family and digital networks. Value may be realised in transactions, but it is created, shared, and sustained through interactions.

Three Essential Elements of Interaction Fields

  1. Data Insights

It’s important to know who’s buying your products and their reasons for choosing you over a competitor. Data gathering helps you understand important details about consumers. Qualitative tools like focus groups always help, and quantitative surveys and data analysis of consumption patterns and purchase behaviours are an invaluable part of classic marketing.

With interaction fields, the approach to data can be broader in three important ways. The first is essentially a form of ethnography. Understanding social behaviour of consumers helps to identify new opportunities to innovate at different points in the value chain or with different experiences by identifying new usage occasions, locations, social rituals and purchase habits.

Secondly, interaction fields consider other brands and businesses that connect with consumers alongside your own, and this can surface new opportunities for partnerships or new platforms for delivery. Research therefore encompasses much more than simple usage and attitudes towards one brand in particular, but a wider understanding of a set of brand relationships that are important to consumers.

Thirdly, interaction fields recognise that consumers are not ‘dumb targets’ of marketing. Instead they are active participants in a network of relationships – contributing and sharing insight and content that, when listened to attentively, can create new opportunities for innovation or to deepen brand relationships and engagement.

  1. Customer Experience

Use the information collected through your analytics efforts to understand how to improve and personalize the alcohol brand experience. Create different concepts to test with a brand’s target audiences. Understand the differences in what customers in different brackets expect when it comes to engagement. How can you demonstrate to them the positive impact of the product in their life? That should be a top concern of all alcoholic or non-alcoholic beverage brands.

The information collected on the behavioral patterns of consumers helps you understand the impacts of your products in the lives of customers. Use that data to inform future campaigns for new or revamped products. Your interaction fields should incorporate the marketing channels best suited to connecting to your audience. That should help in focusing efforts on spaces more likely to encourage customer engagement.

  1. Market Strategy

Your alcohol market strategies should tell customers exactly where you stand when it comes to issues important to them. Values matter. It makes a difference to customers when trying to decide which alcohol and non-alcohol beverage brands fit their lifestyles or belief system. Make sure to expand that level of engagement when creating a brand architecture for related products.

For example, Red Bull has taken its energy equities and built up a strong association with sports and extreme activities. That kind of market segmentation could be essential when it comes to crafting innovative new marketing strategies that tie a brand’s products to experiences that engage an audience.

Don’t limit your interaction fields to digital spaces. Use your knowledge to add depth to all aspects of marketing. That includes setting up alcohol marketing events or other off-line efforts to interact directly with customers.

Having a better understanding of customers and their interaction fields allows beverage businesses to come up with ideas that lead to true brand innovation in the alcohol market.

The questions you should ask as you build out your brand as an interaction field include:

  1. How can you continually make your business valuable to each new customer?
  2. How can you influence partners within your brand ecosystem to buy into your vision?
  3. How can you successfully create value within that ecosystem while generating growth?

We call this approach to creating interaction fields ‘platform thinking’. It creates a brand space which welcomes customers and partners, and which is engineered to create value through interaction.

Six Strategies for more radical innovation

  1. Enlarge “Share of Life” From Product to Solutions

An interaction field should help you see potential ways your brand brings value to customers. That means knowing what that audience experiences each day. Your customer research should give you the minutiae of their lifestyles, key to avoiding the mistake of building marketing campaigns based on outdated assumptions that miss their target.

Alcohol brands must establish the role and worth of their products in a customer’s life before successfully selling them on the benefits. As you think through how your product figures into the day-to-day routines of customers, avoid hasty expansions that take your brand from its roots. The key is to keep your product consistently relevant in the lives of your target audience.

One example of this is the explosion of ready-to-drink (RTD) products taking over the craft beer market. A segment that used to be dominated by the presence of 750ml bomber packaging has shifted to 4-pack tallboy cans. The lightness and convenience of cans over glass bottles makes them a prime choice for consumers to take with them on hikes or other outdoor activities.

It’s much easier to take a canned beverage into a park, pool, or other public areas versus a wine bottle. Wine, cocktails, and hard seltzer are just some of the drinks that now come in a can. If you’re a brand looking to move away from glass bottles, focus on showing your customers how their lives would be better because of that move. Demonstrate the ease of using cans over bottles and how they provide the kind of instant satisfaction expected by today’s consumers.

  1. Strengthen Your Narrative by Competing on “Purpose”

What does your brand want to accomplish beyond hitting your target KPIs? You need to tell your brand’s story in a way that speaks to their values. How is your brand doing a better job than the competition on issues like the environment? Interaction fields can provide clarity on staking out your purpose in a way that’s distinct from other alcohol brands in the market.

For example, environmentally conscious customers want clarity on the term conditions under which  brands operate. They’re thinking about things like getting rid of excess packaging and reducing the use of single-use products, like plastic water bottles. Brands should make sure their advertising reflects the ways they keep the environment in mind for the production and distribution of their products. UK Supermarket Sainsbury’s has committed to halve plastic packaging by 2025[2]. Brands that don’t respond to this will soon like sit on their shelves looking like they’re from a previous era.

If you’re still converting to more environmentally friendly products, don’t be afraid to say that. One way of connecting to customers is by showing your willingness to listen to their concerns and change any practices that could be potentially harmful to the environment. Are you open to alternative packaging that’s more eco-friendly like aluminium cans or paper boxing?

Focusing on sustainability also provides an opportunity for alcohol brands to display their dedication to using sustainable packaging materials for the long-term benefit of our planet. Use your consumer research on this audience to anticipate questions customers might have on various topics like alternative packaging. That helps your marketing team prepare campaigns that speak directly to that audience concerned.

  1. Create Solutions Relevant to a Specific Segment

“The world is polarized and averages are truly meaningless. The task of CPG companies and brands is to stay relevant by still keeping a certain critical scale.” – Alan Jope – CEO Unilever

The risk with all ‘me too’ product-led innovation is that, whilst there’s merit in getting a slice of the pie, the pie itself isn’t getting any but your product portfolio is getting increasingly unmanageable.

To succeed, global brands must achieve sufficient margin and/or volume. Some niche products simply don’t scale. Relentless product variants can clutter a market rather than serve it. The challenge is how to achieve segmentation at scale.

One answer is premiumisation. Even during economic uncertainty, premium alcohol brands can deliver affordable luxury. In fact, economic uncertainty may even encourage some consumers to keep affordable premium brands as a treat when cutting back elsewhere. Estimates show that the sales of premium spirits like tequila, vodka, and whiskey – priced at $25 and up – have increased by 12% over the past 12 months.

A related strategy is to associate a premium alcohol brand with gifting – so that a relatively expensive bottle of something becomes the gift of choice to people when they get their new home, promotion, engagement or addition to the family. These examples are a different take on segmentation from targeting smaller and smaller niches – they are about making really specific brand associations yet connecting them to what are actually fairly universal experiences. It is thanks to De Beers’ marketing that we link diamond rings to getting engaged[3].

Segmentation here is not necessarily about smaller and smaller target groups, but instead about increasingly precise specificity of the brand.

In this way, premiumisation can deliver margin and still drive volume. But to create new associations, new opportunities and even new drinking occasions requires two things: Firstly, a comprehensive understanding of how consumers engage with their world of brands – their interaction fields. Secondly, an ability to think laterally about all the possible brand partnerships and adjacent categories that can be enlisted to create a meaningful new drinking occasions.

One category outside beers, wines and spirits is leading the way. Coffee has achieved a kind of mass-connoisseurship that alcohol brands should study closely for inspiration for bar and in-home premiumisation. Coffee lovers all over the world  visit their local coffee shop for a cup of pour-over coffee, even though it might be double the cost of a regular drip coffee. For home brewing, they buy single origin, whole-bean coffees that often retail for more than twice as much as the traditional mainstream brands.

  1. Stimulate Disruptive Alcohol Brand Innovation

Innovation should start from the ground up. Avoid the temptation of slapping a fresh coat of paint on a rusty old marketing campaign. Look at the partnerships you’ve formed with other partners. What potential changes could you implement that help you push beyond an incremental mindset?

Today’s alcohol brands must have the flexibility to shift with the current times. Look at what’s going on in the world today. Where does your brand fit into the lives of customers navigating an abrupt shift in what is considered normal? Open for innovation at every point in the customer journey and your value chain from the outside and inside, by initiating the right partnerships externally and making your company receptive for change internally. Keep the following concepts in mind as you work through creating your interaction fields.

  • Brand Architecture — Organise all related products, services, and brands in a way that shows you the distinct ways components connect to an audience and each other. Use that to gather information on consumer preferences.
  • Marketing Planning — Let the data gleaned from your interaction fields inform how you establish marketing goals and implement different strategies

Don’t limit yourself to what’s worked in the past. You should consistently update and refine the interaction fields for each segment to stay up to date on what consumers desire now. It also gives you insights into what they may need in the future, which helps keep your brand relevant to current and new customers.

We’ve seen these kinds of changes pay off with the growing popularity of low-alcohol and no-alcohol beverages on the market. There’s also been a shift toward reducing the amount of sugar contained in various products. Many brands also focus more on incorporating natural ingredients into their beverages to appeal to health-conscious customers.

Lighter wines with less sugar and calories are another way of appealing to consumers looking out for their health. An example of this is FitVine, a brand of wines focused on serving an audience looking for products with low sugar, carb, and calorie content. Michelob Ultra now offers a macro light lager that appeals to customers with an active lifestyle.

Beverage brands should also try thinking up new flavor combinations and healthier recipes for their products. For example, the Briska label in Sweden came up with a cider with a high fruit-juice content that combines mango and apple flavors. Another new emerging trend is sparking cocktails to draw in customers looking for new non-alcoholic beverage options.

  1. Make Your Employees Part of Something Bigger

Empower your workers by allowing them to contribute to the way you come up with interaction fields. Fresh eyes encourage novel ideas and could push you in directions you might not have considered with your standard marketing team. Establish an environment that makes the best in the field want to be part of the experience. Stop and think about how your company measures up in the following areas:

  • Employer-Value Proposition — How trustworthy is the appeal of your brand to potential employees? Would top talent be proud of being associated with your company?
  • Capability Assessment — How ready is your organization to adapt quickly to changes in customer preferences?
  • Employee Engagement Initiatives — How is your company going about staying connected to individual employees and their future career goals?
  • Agile Digital Transformation — Have you put in the work to make your company technologically and culturally ready to compete in the digital age? Are you able to engage directly with customers in ways that drive growth? Are you prepared to use next-generation technology to fulfill your brand’s vision?

One example of building up your beverage brand’s employer-value proposition is through charitable contributions to causes important to your workers. Take the time to ask them about where they would like to see improvements in their local community. They can give your company ideas on different events to sponsor that work to make a difference in the lives of residents in need.

The Brewdog brand created a charitable foundation in the UK to help fund various philanthropic endeavors around the goal. They direct funds to initiatives selected by their workers. Campari UK joined forces with The Drinks Trust to help hospitality  workers suffering due to the coronavirus epidemic by creating the Shaken Not Broken Fund. It supports employees in hard-hit fields like bartending, serving, dishwashing, and restaurant management. William Grant & Sons have created #standfast to support the on-trade[4].

Happy employees create a more harmonious workspace. Ask workers where they’d like to be five years from now and help them find a path toward achieving that goal. That could be through initiatives like tuition reimbursement or providing an opportunity to receive additional training in a specific field.

You want people at all ends of the company with the capabilities needed to deliver on the ideas produced through your interaction fields. It also encourages an atmosphere of platform thinking throughout the organization. Invest in committing to agile digital transformation to improve the technology at your company and help employees be more efficient in completing their job functions and satisfying your customer base. The more you invest in building up these areas of your company, the more likely you are to attract the talent needed to promote continued success.

  1. Enable Constant Two-Way Consumer Communication

The value of your brand depends on the perception of consumers. You should look for different ways to encourage connections with your audience through innovative marketing for alcohol brands. Let’s examine some concepts that help in that effort.

  • Customer Experience Design — How easy is it for consumers to navigate your website or take advantage of a recent promotion? Track the journey customers take when interacting with your brand, both online and in stores.
  • Customer Relationship Management (CRM) Tools — Make sure you have architecture in place that gives you a 360-degree view of everything from your most successful marketing campaigns to data analytics on optimal marketing channels.
  • Marketing Funnel Optimization — Find out what’s most successful in encouraging customers to follow the path from an initial contact to a conversion.

How convenient is it for consumers to receive your products? Does your website provide a way for customers to find a convenience store that delivers to their doorstep? Does your marketing tunnel include linking up with subscription services that allow customers to subscribe to regular deliveries of your products?

Don’t limit yourself to the traditional retail model when it comes to getting your beverages to consumers. For example, Drizzly is a two-sided market that connects retailers with interested beverage drinkers to have drinks delivered directly. They also opened up a new monetization channel by charging participating retail stores a membership fee versus collecting an additional fee or taking a cut of sales to customers.

Get Help Building Better Alcoholic Branding Strategies

Vivaldi have helped some of the world’s most forward thinking businesses create innovative brands and experiences for today’s consumers. If your brand or business is looking to develop more radical approaches to innovation, let’s start a conversation. We’ll look at how platform thinking might work for you, and work towards creating a dynamic interaction field for your consumers.