By students, for students.

Diageo’s opportunities in 2013

In Management, Marketing on December 29, 2012 at 6:31 pm

Guinness is Diageo's leading stout

Diageo has proven itself an exemplary brand builder and agile innovator, remaining curious despite controlling many heritage brands. HBR looks at future opportunities in the alcohol industry.

Female drinkers: Diageo already markets to women with the Baileys brand, but – with women spending £10bn a year on drinks – more can be done to break with the past of male-dominated pubs. Men are currently more likely to reach for a high-calorie Guinness or tin of Red Stripe. Diageo’s gender focus is revealed by the brand characters of Johnnie Walker and Captain Morgan. Despite the huge barriers to bringing beer to women, Diageo should compete with Carlsberg’s Eve.

Low-alcohol: Mintel has highlighted lower-alcohol wine as one of the few segments of the category which was showing significant year-on-year growth. Diageo could profit by focussing on this segment if they could overcome three obstacles: extra production costs, taste and packaging. Leveraging scale of production offers a way to reduce the cost placed on a buyer considering low-alcohol options, while marketing celebrating difference in taste could help turn consumer perceptions. Low-alcohol options could be further differentiated by packaging as Mintel also found screw tops, boxes and pouches were also growing in popularity.

Matching trend: The shift from on-trade to off-trade has been accompanied with a rise in consumers looking to match their food and alcohol. This comes as a consequence of eating at home, without the recommendations of a sommelier or wine list. Diageo should move to perform this role within the home, targeting consumers in supermarkets. Partnerships with the food industry could be mutually beneficial as cross-promotional recommendations read: ‘Perfect with Guinness!’ or ‘Great at BBQs!’

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