The head of alcohol buying at the country’s biggest supermarket has called 2004 “possibly the poorest year on record” for innovation and is calling for new energy to be injected into the category.
Mark Murphy, category director at Tesco, told The Grocer that the industry was at risk of becoming boring unless there was more new product activity from drinks companies.
He said: “It’s been a dreadful year for innovation. I can’t think of anything of real impact for the whole year. If you think about the investment these companies make, to have nothing coming through in the pipeline is hugely worrying. I can’t remember in my career a year as bad as this for lack of new product development.”
Murphy challenged companies to find the “next widget”, which he said had been a brilliant concept.
The slowdown is attributed by insiders to the high cost of promotional activity, the decline in RTDs and concerns over the government’s crackdown on binge drinking and alcohol advertising. However Murphy, who said companies were promising a spate of activity in 2005, said: “I don’t think companies are spending any less on R& D this year, but they need to invest more time and energy, otherwise it will become a boring category.”
Innovations from the biggest companies have been largely brand extensions or new packaging formats, mainly from Diageo, which launched winter Pimm’s, Baileys for Coffee and Gordon’s Distillers Cut Gin.
Craig Evans, product manager at ACNielsen, agreed innovation had been sparse and said the emphasis had been on brand building. “The cost of above-the-line activity is so high that perhaps the money is not there. Shelf space is limited, so getting distribution for new brands can be difficult.”
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Claire Hu