Producers Inventing New Products to Drive Sales

By: Tim Vandergrift

Innovative offerings can help you encourage trial and increase sales

The best way to add to the bottom line in your liquor store is to increase sales by getting customers to try new products. Displays, discounts, marketing, and promotions all do their part, but unless the bottles and cans on your shelves and in your coolers appeal to consumers, those strategies will have an uphill battle.

Fortunately, beverage manufacturers are keenly focused on increasing product appeal, investing significant resources to innovate their lines. It’s natural to think that after thousands of years of producing alcohol beverages people would have tried everything under the sun. But there is still room for crossovers and products that may be common in other countries or regions to make an appearance in our local markets.

New RTDs

The most obvious current innovation is hard seltzer. This category exploded on the scene with popular brand White Claw launching in 2016 and taking half of the North American market in less than three years. Mark Anthony Brands’ previous hit was Mike’s Hard Lemonade, and the company recognized that consumers wanted an easy-drinking carbonated beverage that was not only low-calorie, but also gluten-free. The last two factors helped White Claw’s sales grow in triple digits at a time when traditional beer and other RTD sales were growing much more slowly.

Another example of product innovation in the RTD category comes from an unexpected source: kombucha. Originally treated as a health drink, this fermented tea originated in China and spread across Europe in the late 20th century. After that it infiltrated the commercial market so effectively that it became a $2 billion dollar per year category by 2019.

For kombucha enthusiasts Jamie Kirwin and Valli Manickam, founders of Plenty Hard Kombucha, creating a low-alcohol, carbonated kombucha drink was a natural evolution. As always in health-conscious Western culture, consumers were looking for an alternative beverage that was low in alcohol and calories. Throw in the popular concept that kombucha can have health benefits and it’s easy to understand its appeal.

Plenty Hard Kombucha was the first in the category to launch in BC and they took that appeal and incentivized their offering by developing a premium product. Rather than add neutral spirits to a kombucha base, they chose to do a natural fermentation with 100% organic ingredients that are not only gluten-free but vegan friendly.

“We wanted to make a drink that reflected the core of kombucha’s appeal.”

“We wanted to make a drink that reflected the core of kombucha’s appeal: light and clean, refreshing and easy to drink,” explains Manickam. She adds that being a female-founded, owned and operated small business helped them appeal to the socially conscious side of the market as well.

Craft Breweries

A more local product innovation strategy comes from craft beer producers. Mostly small and nimble, these brewers are reinventing their product lines on what seems like a weekly basis.

One example is Steamworks Brewing’s first wine offering, Piquette Rosé. By taking pressed grape skins from BC vineyards and refermenting them into a low-alcohol, sparkling wine they not only extended their line, they introduced a product that was totally new to their market. Brett Jamieson, R&D lead for Steamworks notes, “Piquette is unpretentious and easy-drinking in a way that made us think of beer, and it’s a wine that would be totally appropriate to break out at typical social occasions.”

Other innovators in craft brewing have taken advantage of emerging product trends from around the world, producing new offerings like hazy IPAs and Italian Pilsners that have displaced more old-school pale ales and lagers. The last time beer producers pivoted this quickly was with the launch of ‘Lite’ beers in the mid-1970s. We have never seen so many new offerings come out so quickly.

Craft Distilleries

On the spirits’ side, Mad Laboratory Distilling is not only innovating with new products, expanding their vodka and gins with offerings like kombucha cordials, premixed cocktails, custom bitters, and specialties such as Raki (a Turkish spirit flavoured with aniseed, like Ouzo), this craft distiller is also offering new sizes and charity-connected releases.

“50ml bottles encourage trial.”

Scott Thompson, owner and distiller at Mad Labs acknowledges the effort needed to drive sales but notes that innovation breeds success. For size offerings, Thompson says that his 50ml bottles encourage trial and even though they are “a pain, and the margins [for us] aren’t great, it gives our stores a chance to test out a new product to see if there’s an appetite for it.”

Charity-connected special releases, while not strictly a product innovation, are a way of expanding that product’s appeal. Thompson says, “We worked with Rainbow Refugee to put out a special release of our Viking Vodka with proceeds going to them. This allows stores [and consumers] whose beliefs align with ours to make a stronger connection with the brand.”

Selling New Innovations

Getting these innovative new products into your store is just the first step. To sell them to your customers you need to cover the five factors that come with every product choice:

  1. Concept: Does the idea behind this beverage make sense to the customer? What makes an IPA hazy and why is that good? You only have a few seconds to get them to understand what the product is, and a vague concept will sink a sale, while a strong ‘hook’ can make it in one sentence.
  2. Application: Is the 50ml size perfect for trying out new cocktails with friends? Does kombucha’s vegan, gluten-free, low-ABV appeal to the health crowd? Will Piquette be great for patio days or fireside nights where heavier offerings might be too much. An easy-to-understand application can clinch a purchase decision.
  3. Price: This is trickier than most people think, as too high a price will push away consumers, but too low a price will have them doubting the value of the offering. Make sure to differentiate premium offerings with premium positioning on price to reassure people they’re getting a great product.
  4. Proof: Customers want to know that the product is a ‘real’ thing. By linking it to current users and existing sales in the market (“It sells really well in our pub” or “The restaurant down the street is pairing it with their charcuterie plate”) you can reassure them that they’re part of a group that can see the value of the new product.
  5. Sales Knowledge: You and your floor staff need to have tried the product and understand how it will be used. Your sales reps or the manufacturer’s marketing and promotions teams will be delighted to provide samples to your staff and give them the education needed to sell their products. Take advantage of their enthusiasm to generate your own, and customers will be confident to purchase these innovative new products.