Dispense innovation brings sales

What have the Grolsch swing-top bottle, Magners and Guinness Extra Cold all got in common?

When they were first launched, they were all examples of dispense and serve innovation that drove brand or category growth in the on-trade. Developing new ideas in how drinks are served helps brand owners to get their brands to stand out and helps retailers to drive footfall.

A current example of this is Pepsi Xtra Cold. Consumers, publicans and Pepsi all gain from this new idea.

Consumers get a better-quality, more consistent, extra cold cola. New technology means the drink is actually mixed in the cellar, avoiding the inconsistencies that came with conventional systems, which involved mixing the syrup at point of dispense.

The licensee gains from higher sales of Pepsi - test market results report a six per cent growth in cola sales at pubs that used the new system. The benefit for Pepsi is not only the better-quality drink and happy publicans but also the launch of Pepsi Max into the on-trade. I predict that Pepsi Xtra Cold will be a success story.

There are two main types of dispense innovation…

Serve innovation ​

Examples of serve innovation include Magners (cider over ice), Corona (the lime) and John Smith's Extra Smooth (the creamy, longer-lasting head). As soon as one customer starts drinking these types of brands, other customers follow.

When I was skiing in France last winter a big group of us wanted a jug of beer to share. What we were offered was a 'beer giraffe' - a three-litre cylinder of beer on a stand with a beer tap, and we served ourselves at the table.

And then we had another one. By the time we left, four or five other tables had followed our example.

Serve innovation spreads like a virus.

Dispense innovation​

Dispense innovation is where existing brands are served better. Extra cold lager, the success story of the draught lager market in recent years, is a good example. Consumers get their lager colder; publicans like the simplicity and the interest that condensing fonts can bring; and brand owners get their brands served at their best.

Examples of dispense innovation can be found among suppliers and pub companies.

Diageo understands its potential. Twenty years ago, industry-watchers said that the spirits category was dying. But Diageo and other spirit companies have changed this, focusing on a Perfect Serve utilising the right glassware, longer measures and sundries.

JD Wetherspoon is one pub company that embraces dispense innovation.

The draught wine often found on its bars, served from a lager-like condensing font on the bar, is jaw-droppingly different when you see if for the first time.

Judging from reported sales, draught wine is already a success story at the managed chain.

Cardinal works with many brand owners when they introduce new brands on trial, measuring consumer and trade reactions.

We know from extensive experience that the most appealing ideas are those that offer something compelling.

Often this appeal is how the new brand is dispensed or served.

The lesson is clear. Dispense and serve innovation is a great way to attract consumer interest. n

Martin Dinkele is a senior partner in Cardinal Research, a brands marketing and retail development agency which conducts licensed trade research on behalf of drinks companies, brewers, pub groups and industry suppliers​