Intoxivation ? Reveries

The African market is spurring innovation at Diageo, reports the Economist (7/14/12). As a category, the drinks business isn?t exactly known for innovation, in fact it is ?one of the world?s most conservative? businesses. ?Wine drinkers value ancient vintages. Regulars ask the barman for ?the usual.? Brewers tussle mightily to increase their market share by a single percentage point.? But in Africa, which is growing fast (2.3 percent per year), and whose ?median age is a youthful 19.7,? some ?60 percent of ? drinkers slake their thirst with homebrew rather than branded booze, so there is plenty of room to upgrade.?

Diageo CEO Paul Walsh sees a great opportunity to increase ?the company?s sales in emerging markets and has set sights on the African market, in particular. But because of local regulations, competition from other ?global giants such as Anheuser Busch and SABMiller,? and an African perception that Western drinks are ?bland,? Diageo is set on introducing new products. Among them is an apple-flavored drink called Snapp, ?a tipple for women in their 20s (a group brewers are desperate to woo because they don?t drink as much as young men).?

Also in the offing is Orijin, ?designed for the emerging middle class ? Diageo noticed that a new drink ? wines mixed with spirits and flavored with herbs and spices ? had taken off in the Caribbean. It also noticed that middle-class Africans had a penchant for products that project pride in African traditions. It put the two trends together and invented its own ?traditional? African drink.? Most successful is Senator Keg, a cut-price beer, for which Diageo actually got a tax break from the Kenyan government because it is a safe alternative to existing options that have proved lethal. Diageo?s goal is to increase its sales in emerging markets from 40 percent today to 50 percent by 2015.

Source: http://www.reveries.com/2012/07/intoxivation/

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