Benefits of diversification in spirits industry

The global chief marketing officer at Bacardi explains the opportunities that lie in diversification for drinks brands in the post-pandemic world

John Burke Bacardi

The pandemic impacted the beverage industry in different ways. As people spent more time at home, the hospitality sector ground to a halt, while off-trade sales in supermarkets and fine-food retailers soared. Prior to the pandemic, only one per cent of spirits sales happened online. Now, digital sales across the Bacardi portfolio have grown by triple digits. 

Speaking generally, as consumer behaviour shifted rapidly last year, the industry landscape transformed, and beverage brands were met with a challenge: to diversify their offering to keep up. Of course, during these difficult times, many brands also felt compelled to offer support to their local communities. 

At Bacardi, we're always adapting to changing trends. So when at-home cocktails and buying spirits online took off, we quickly accelerated our e-commerce business. We also diversified our products to cater to emerging at-home needs. 

This is exciting, in part, because presenting your products digitally allows virtually infinite shelf space to display them. And near-infinite shelf space provided us with a bounty of opportunity – plenty of room to create, test and refine new products. 

Catering to changes in taste 

Our latest trends report found that one in five people in the US are creating cocktails at home; in the UK, one in five are entertaining on the domestic front. We expect both these trends to continue through 2021, and beyond. 

At Bacardi, we've already made many moves to respond to shifts in the retail climate, and to changes in consumer behaviour and appetites.  

For example, in response to the at-home drinking trend, we reactively launched Grey Goose espresso martini kits. We also activated a personalised labelling service with Bacardí Carta Blanca, so as to render its bottles perfect gifts to send to friends or family. Such agile responses are critical for the future of the drinks industry. 

Digital destinations for drinkers and drink-makers 

Additionally, to address the pain points of making cocktails at home (from a lack of ingredients to a lack of confidence), we launched a new platform, Mix Lab.  

Mix Lab hosts a growing community of cocktail lovers. It offers ultra-personalised recipe recommendations and easy-to-follow video tutorials made by bartenders. It also serves as a place for drinkers to purchase products, and for bartenders to both showcase their expertise and build their reputation. 

In short, it’s a one-stop shop. 

For us, though, Mix Lab isn't about driving sales. Rather, it’s about building a digital destination to appreciate cocktails, where we can recreate the magical connection between bartenders and the people who love their creations. 

When drinking establishments do open up again, they’ll be greeted by better-informed drinkers, which is good news for bartenders, as aficionados make better appreciators. 

Our relationships with bars and bartenders remain vital to us; we are committed to facing the current challenges together. Last year, we launched #RaiseYourSpirits, pledging $3 million to support our partners in the bar and restaurant industry. And we see Mix Lab as another way to provide bartenders with tangible support, and this was the driving force behind its development. 

We wanted to give people who work in the bartending industry a new platform to feature their mixology skills and grow an engaged following – by developing a direct connection with the people who drink their cocktails. 

Building an app like Mix Lab means constantly looking for ways to improve and opportunities to innovate. Right now, for example, we’re exploring a virtual tipping functionality. This lets users show appreciation for the cocktails they craft by tipping the bartender who created the recipe, via the app. 

We're also in the process of beta testing a new app specifically for bartenders called Freepour. This app is designed to equip bartenders with the tools to advance their career in the digital space. It also provides training and education to help them back into work when the world opens up again. 

In today’s climate, diversifying your brand, while exploring how to best match your products with tech is the key to reach and engage audiences. To me, while challenging, these changes are also exciting. 

As we emerge from the global pandemic, we’ll take the valuable lessons we learned about digital space with us, shaping all our brands for many years to come.

22 March 2021