For years consumer markets have been relentlessly commoditised by retailers who hold the power over the distribution, and who not unreasonably, have sought ways to divert the proprietary margins available from manufacturers pockets into their own. Short term thinking, but that seems to be the world we live in.
Largely retailers have won the game, and branded FMCG products are now becoming an increasing rarity, and mostly where they survive, it is on the back of trade deals and residual strength of brands built by smart and visionary marketing in yesteryear. In liquor there are still many brands, but unbeknownst to most consumers, many of them are just housebrands infused with the wine industry hyperbole that seems to be expected.
The impact on category innovation is yet to be really seen, but I suspect it will stumble further, as by my observation of the shelves, it has done over the past few years.
There however, is the schizophrenia.
Every now and again, a product emerges that runs against the trend.
Consumers are increasingly concerned with the integrity of the supply chains that deliver products to their mouths, so on the fringes there are some very expensive products, usually in alternative distribution that use long lists of adjectives to describe their products: organic, hand- made, all natural, crafted, you have seen them all. Occasionally they are genuinely ‘new’ products, but mostly they are better quality, low volume versions of the commodities available on supermarket shelves.Sometimes they work, and consumers pay a significant premium for the story that supports the claims, but generally the promise given by the adjectives is taken on trust by consumers.
Technology will increasingly have a role in this as magic like Blockchain emerges that can both guarantee the integrity of products supply chain, and make it absolutely transparent. Suddenly the hyperbole can be subjected to rational scrutiny.
In 2013 George Clooney and a few of his mates wanted their own brand of tequila. Why not, they can afford whatever they want, (but why Tequila??) anyway, the brand they chose and subsequently built, ‘Casamigos’ has just been bought by Diageo for $US1 billion, around 1.3 Billion Aussie. Not bad in four years!
I do not drink tequila, and the term ‘Super Premium Tequila’ seems to me to be an absolute oxymoron, although perhaps I am unduly influenced by one very bad night involving a bottle of the stuff and a lemon tree while at University.
For $1.3 billion I could be persuaded to give tequila a second chance. Is this growth and purchase of such a highly personalised brand another signpost that consumers are demanding a whole set of new experiences from the items they buy, or is it just something in the cactus?
