The liquor industry is experiencing 3 seismic changes
In an international, incredibly broad industry, it's hard to know which trends are causing seismic shifts, and which are just blips on the radar.
So, Business Insider turned to Gilles Bogaert, CFO of Pernod Ricard, the parent company of brands including Absolut and Jameson.Here are three trends you need to know about that Bogaert believes are truly changing the liquor industry:
1. 'Home-tainment' is a new way to drink.
While restaurants and bars have historically dominated the spirits market, Bogaert says that in 2016, the focus is on discovering new moments in which consumers are drinking.
"At the end of the day, we [aim to] accompany the good moments of life with consumers," says Bogaert. "People, more and more, want to have good moments with their friends at home."
For Pernod Ricard, the challenge goes beyond providing the correct beverages for the opportunity.Succeeding in "home-tainment" means "not only bringing our bottles there," says Bogaert. The company is looking into helping organize parties and using social media as a medium to share photos from moments spent entertaining at home.
2. Consumers are getting more savvy.
In recent years, sales of Pernod Ricard's Absolut Vodka has dropped in the US, while Jameson Irish Whiskey has thrived. The reason for one brand's slump and the others' success is, according to Bogaert, how customers interpret the authenticity of the two brands.
While Jameson's Irish heritage has been front-and-center, Bogaert acknowledges that Absolut's marketing in the US got "maybe too emotional," losing its focus on the actual quality of the product.
Now, the company is refusing to make the same mistake again.
So, instead of releasing new, out-there flavored vodkas and whiskeys, the company is promoting authenticity and quality. Absolut recently release 'Oak by Absolut,' vodka made in oak barrels, as well as Absolut Elyx, a "handcrafted luxury" vodka. In October, the vodka brand revamped its bottle branding for the first time it debuted in 1979 to emphasize its authenticity, heritage, and quality .
The quest for authenticity also shaping acquisitions. In late January, Pernod Ricard acquired a majority stake in " hipster-favorite " Monkey 47 gin, despite already owning mainstream gin brands Beefeater and Seagram's.
3. E-commerce is essential.
When asked what he thinks is the top change shaping the liquor industry today, Bogaert had a surprising answer.
"The digital revolution," he says. "It fundamentally changes the way we interact with the consumer, it changes the way marketing is done, and it can bring us a competitive advantage if we move ahead of the others"
More immediately, social media and online marketing give the company a direct line to customers. Pernod Ricard can quickly respond to consumer habits and concerns, as well as meeting consumers where they already are. That, according to Bogaert, is an even bigger shift than any drinker's preference for whiskey or vodka.