Now that economists are revising post-pandemic growth forecasts upwards for most major economies, suggesting that there are fertile conditions for beverage brands to get back on track - which beverage brands will do more to get ahead of the pack on the recovery curve?
The last 18 months have been an opportunity to reboot and rethink for drinks producers. Some changes have been forced and driven out of pure necessity others have been an acceleration of already conceived future plans.
It has felt like being sent on a strategy simulation course with the focus on disaster scenarios but for most it has been for real.
For the more cautious there can be some comfort in the likely return for the on trade and travel retail business as if it had just been on an extended break, but for those more hungry for brand growth there are some pandemic prompted initiatives that can be double downed on to accelerate brand value.
Here are a few that we think will be growth drivers for 2021 and beyond.
Direct to consumer
For many, it has been a scramble to get the logistics in place to enable products to be purchased directly to consumers' homes especially internationally, either from a brand site or through a third party. There will be no turning back and watch out for the brands that don’t just see this as an emergency distribution channel but use the opportunity to build new closer and informed relationships with their consumers. Now the logistical basics are in place, expect drinks brands to accelerate their expertise in marketing to the ‘at home’ purchaser and consumer through new product formats, subscription services, and tailored product or learning delivery.
Technology
We can’t fail to be aware of the role that technology has played in helping us all continue to do business with each other. So, let’s keep that belief in technology being a force for good. It doesn’t just live in the future, but it is happening right now, so marketeers can put this to the front of the agenda in exploring the ways that they can enhance consumers' brand experience and facilitate purchase using technology. Now is the time to revisit your customer journey map and examine it through the eyes of a 25-year-old; where are the touchpoints? where you are out of date?
Being really Big
The Brand Finance Alcoholic Drinks report focuses on the top of the pyramid of brands by value but compared to other sector reports it is unusual to have so many of the top players that are not truly global brands. Not the place to have the debate about what constitutes a global brand, but it is certainly the case that all the top brands here have room to grow, geographically at least. Most have regional strengths or powerhouse markets but not a complete global size 10 footprint.
Moutai who top the Brand Finance Spirits 50 2021 ranking, have, according to The Spirits Business, 107 overseas distributors in 64 countries across 5 continents. In 2019, they generated around US$370 million from these international markets out of their global revenue of US$40 billion. The last year has thrown everything up in the air so maybe it is time for the big to challenge themselves in what they are prepared to do to get bigger.
Outside of spirits, global brands use other business models to build volume without losing value, and maybe now is the time for a major spirits brand to bottle locally or build a franchise system. Can we put a value on production provenance, and for consumers is it distinct from brand provenance?
Sustainability
The other of the two existential challenges that are facing businesses in 2021. Most will have got past the naïve belief that climate change is something that we can pay lip service to and as long as we tidy up our act a bit and have a good policy statement for shareholders, we will be ok.
Now, look out for the brands that will not only genuinely address their shortcomings to reassure consumers but will proactively find ways to delight them by taking the lead in specific areas.
These brands will embrace the mindset that having a sustainable strategy and being profitable are not mutually exclusive and that sound genuine. Sustainable credentials are a source of competitive advantage. The challenge will be to isolate which of the UN’s 17 Sustainable Development Goals will be the most impactful in terms of growing brand value. It will be as important for marketers to add a sustainable mindset to their repertoire of skills as it is to have financial acumen.
Declutter
For those who have accumulated tail of brands through acquisition or innovations is time to swing it or lose it. I worked for a global business that had 1000 trademarks and actively invested in five of them, which was a good focus strategy but meant we didn’t have a plan for the other 995 brands. Occasionally a hopeful buyer came knocking and more often than not we held on to it because ‘it is a nice little brand, and I am sure we could do something with it’. It may well have been, but we never did.
Emotion trumped the reality. If only in the spirit of reusing and recycling then please examine your tail, what can you use for testing new initiatives, which ones can you put a value on and pass on to some passionate entrepreneurs with some cash who might make a living out of them. The benefit will be a clearer focus on your portfolio tasks, maybe some cash to reinvest, and freedom from the niggling ‘I wonder if conversation’.
