Product Managers Know Kids Want Some Buzz With Their Soda

Why just drink soda when you can get soda with a kick?
Why just drink soda when you can get soda with a kick?
Image Credit: Person-with-No Name

Product managers who are responsible for selling alcohol are in a bit of a bind these days. For some reason, perhaps because of everyone’s health kick, sales of alcohol have been declining over the past few years. Today’s millennials are just not buying as much beer, wine, and hard liquor as their parents once did. This news is sad for alcohol product managers. However, there is some good news for them. It turns out that some of the fastest growing alcohol drinks in the U.S. are called “alcopops”. The product development definition for these drinks defines a strong, sugary alcoholic soda that is targeted towards younger drinkers. Could these be the products that alcohol product managers need to save their market?

Say Hello To Alcopops

Product managers who work at the big beer companies have seen this trend coming and are taking steps to prepare to benefit from it. Over at Diageo, their product managers have launched a product called “Smirnoff Ice Smash”. This product is fruit-flavored and contains 8% alcohol by volume. They had had a lower-alcohol line of products called Smirnoff Ice, but sales of the new Smash product have grown by 400% over the past six months. This product is the most successful product that Diageo has launched in the U.S. despite the fact that their customers tend to be shifting towards healthier drinks.

The Diageo product managers believe that there may now be two different types of customers: those who reach for a healthy drink and those who are willing to reach for a Smash. Studies have shown that these types of drinks appeal to consumers who are 21-27 years old. Additionally, millennials of both genders appear to be driving sales. 24oz versions of these drinks are now available at gas stations, pharmacies, and delis. Seasonal versions of the beverages have sold so well that they have been turned into full-time offerings.

This new type of drink appears to be creating a new type of market. It turns out that sales of alcopop products that contain 6% or more alcohol content grew by 4.7% to create a US$1.14B market last year. Addressing this market would look good on anyone’s product manager resume. This values come from a study of grocery stores, convenience and liquor stores. At the same time, sales of alcopop products that contained less than 6% alcohol declined by 3.6%. At the same time, there was a 0.2% decline in the sales of beer. Sales of wine rose by 2.1% and spirts grew by 3.1%.

How Product Managers Plan On Providing Sodas With A Buzz

So what is it about these alcopop beverages that young people seem to like so much? Alcopops as a whole contain less alcohol than both wine and spirits; however, they contain as much alcohol (or even more) than beer does. The largest group of consumers that are buying the alcopops are millennials. The reason that these products are being bought is because health and wellness is not necessarily a trend for all customers. Product managers believe that for some customers, when they go to certain events (parties) they want to consume products that have a higher alcohol content – it’s during this time that they don’t worry about calorie content.

Product managers are in the process of introducing alcopop beverages that are targeted at customers who are seeking a stronger flavor. The products are being made available in 7-Eleven stores and other such chains. The selling point for these products is that they offer the customer a way that is both cheap and convenient to get a buzz. These types of drinks are often taxed as though they were beer instead of wine or spirts. This is despite the fact that they are often stronger and they may contain spirits.

Product managers are using alcopop beverages to attempt to lure customers back to beer who may be considering defecting to either wine or spirits. The arrival of another new type of drink, spiked seltzer, does not seem to be affecting sales of alcopop. The spiked seltzer drinks are targeted at more health-conscious customers. What product manager are discovering is that high-calorie alcopop beverages and low-calorie spiked seltzer drinks are often being drunk by the same customer, just on different occasions.

What All Of This Means For You

You would think that being a product manager who was responsible for managing drinks that contain alcohol would be a great job to have. I mean, everyone likes to drink beer, wine, and spirits, right? Well, it turns out that in the health conscious age that we are now living in, being a product manager for alcohol products is turning out to be a tough job and sales have been slipping for the past few years. Product managers have been searching their product manager job description to try to figure out what to do. However, lately there has been a bright spot in this market that product managers are starting to get excited about: alcopops!

The new breed of product, alcopops, is different from other beverages. It contains roughly 8% alcohol and is fruit flavored. Millennials of both genders are driving sales of alcopops. There appear to be two types of customers, ones who are watching the number of calories that they consume and ones that will reach for an alcopop if it is available. As sales of beer start to decline, sales of alcopop products are starting to take off. Alcopop products appear to be what millennials want to drink when they are at a party and they don’t care about calories. Alcopop products provide their drinkers with a cheap and effective way to get a buzz. Product managers are trying to get alcopop products to lure customers back to buying beer. Another new product, hard seltzer has also arrived on the market, but it appears to be targeted towards a different customer.

If there is one thing that product managers do not have any control over, it’s consumer tastes. In the world of alcohol beverages, beer and wine used to rule the market. However, as consumers started to watch their weight, beer sales have been declining. The arrival of alcopop products have provided consumers with a new way to get the alcohol that they crave in an even sweeter format. Product managers need to carefully study this market and determine exactly what flavors their customers are looking for. Taking the time to understand when customers are going to want to drink the new alcopop beverages will be key to long term success in this market. Product managers have a lot of work to do in order to find out how they can benefit from the new market that alcopop products are creating.

– Dr. Jim Anderson Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: What do you think would be the best way to distinguish one alcopop product from others that are on the market?

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What We’ll Be Talking About Next Time

If there is one job that most of us would agree that we would not like to have these days, it’s any job in which we would be going up against Amazon. They have spread into so many different areas that it is becoming harder and harder to avoid competing with them. However, there is one product manager who works at an independent bookstore that has found a way to not only survive, but also to thrive even as they sell to the same customers that Amazon does.