The Big Interview: Karen Salters, SHS Drinks

“It reminds you that there’s nothing really new,” says Karen Salters as we move from library to laboratory, from the past to what might be the future, where she leads the quest to create the drinks that might catch the mood of the times, the imagination of the modern consumer.

As well as extensions to established brands, most recently WKD Purple, WKD Black and WKD Remix Apple Cut, this laboratory is the birthplace of original concepts such as Sorelle and Equator, respectively wine flavour and beer flavour zero-alcohol drinks. Not wine and beer with the alcohol taken out but drinks built, as it were, from the bottom up, using soft-drinks technology.

“I think we’re approaching alcohol-free from a different, a more positive angle,” says Salters.

Innovation like this is what has driven SHS Drinks since its foundation as Beverage Brands 20 years ago, and what has miraculously kept alive its most famous brand, WKD, a veteran of the alcopop wars that’s now the UK’s best-selling RTD.

And Salters has been there almost from the start. The daughter of the late Geoff Salters, co-founder of parent company SHS Group (the second ‘S’ stands for Salters), she was about to embark on a career with the BBC when she was asked to take responsibility for marketing at the fledgling Beverage Brands under its charismatic boss Joe Woods.

Salters worked on the company’s first acquisition Caledonian Clear, a range of flavoured waters she now believes was “15 years ahead of its time — and we didn’t have the resources to put behind it then”.

She soon faced a different kind of challenge. In response to the overnight success of alcoholic lemonades, Joe Woods came up with Woody’s, alcopops in different flavours.

As the media accused drinks firms of peddling booze to children and the Government stepped in, Salters was plunged into the deep end of the controversy. “The cartoon tree frog had to come off the label pretty quickly,” she says. In fact, to keep pace with changing regulation she spent £1.5m changing the label three times in a single year.

Testing the boundaries​

That must have steeled her for WKD. Launched on a low budget the following year, from the start the product’s risqué marketing tested the boundaries of what might be acceptable to a newly sensitised audience.

“We have always gone up to the line, and as the guidelines have changed, we have had to change, too,” she says. “It was a problem
from the beginning. We were on the back foot and had to spend a lot of time defending ourselves.

“But I believe there’s a myth to be dispelled in what the likes of the Daily Mail says about us. WKD is anything but cheap and strong. And if they’re not drinking RTDs it would be flavoured ciders.”

Salters takes the industry’s social responsibilities seriously and she’s been on the Portman Group’s council since 2004.

“I really enjoy it, but we’ve not been good at PR in the past and it’s an organisation that’s led the way on responsible drinking. It set up Drinkaware and if you take the latest Look After Your Mates campaign the strength of it is that it isn’t finger-wagging. It’s doing what the industry has always been good at — speaking to the consumer in the right way.

“And we recognise that any campaign has got to be digital. Young people aren’t watching TV any more. I think we have an issue, though, with age-gate verification on websites, and the likes of Google has to come up with a solution for that.

“And I hope that the relaunch of Hooch doesn’t reignite the Daily Mail scandals!

“We’ve got a lot to be proud of with WKD,” she goes on. “I was working on it from the start. We didn’t have the resources to throw at it like our competitors, so we had to think differently, to seed it outside the mainstream and develop the brand’s personality in the pubs.”

That early, patient work, along with the innovations that followed, is what lies behind the brand’s longevity, Salters believes. “When we started it in March 1996, WKD was a ‘fashion item’. We didn’t think it would last 16 years. But it’s still here — and it’s still a fashion item!”

Taxing times​

Sales have slipped slightly of late — SHS turnover fell 4.9% to £126.5m last year. “Taxation is driving people to spirits,” she says. But Salters has every confidence in WKD. Interestingly, she uses the older term FAB — flavoured alcoholic beverage — in preference to RTD to describe the category in which WKD sits, and it allows her to see a broader potential for the brand.

“People are drinking flavoured ciders, so there’s still a desire for that kind of product — and it doesn’t have to come from Sweden.”
Salters became joint managing director of the company in 2009 alongside Finn O’Driscoll, another long-standing SHS employee. Broadly, he takes care of the supply side, while Salters focuses on the sales and marketing.

They have sharpened up the operation’s public face somewhat by changing the name from Beverage Brands to SHS Drinks, a move Salters says has had some real practical value: “We don’t have to spend the first 10 minutes of every presentation explaining the company.

“And do publicans care what we’re called? They just want the brands. And it puts us in a better position to make acquisitions.”

Which is just what SHS Drinks has done. After adding to its portfolio the well known names of Shloer and Merrydown, last May it picked up Bottle Green soft drinks.

The latter brand has already played its part in another dimension of the company’s powers of innovation as it teamed up this summer with Diageo to produce a couple of new cocktails: Elderflower Cordial mixed with Gordon’s gin and the sparking Elderflower Pressé with Grey Goose and lime to produce La Grande Fizz, a favourite of Salters’.

“Elderflower is the flavour to be with,” she says.

But there’s more to these cocktails than playing with nice flavours. They result from SHS Drinks’ commitment to bringing the pub trade new drinks that will not only sell but are profitable.

“We’re always aiming to come up with a mix that will deliver margin,” Salters explains. “We’ve had on-trade customers in the laboratory here so we can develop drinks with them. Stonegate Pub Company, for instance, set us a challenge to create different cocktails and improve margins at its late-night venues.

“And we are learning more about drinks consumers through ethnographic studies, going on nights out with 18 to 24-year-olds, finding out why they choose certain pubs and certain drinks.”

Indeed, the typical WKD drinker has been distilled into a number of Facebook profiles, a clever idea that not only gives the marketers a quick and clear picture of who they’re aiming at but reflects the need to communicate with them digitally — something SHS Drinks is also working hard at.

For Salters this isn’t just a matter of building up brands. This strategy can help all pubs and bars get ahead of the game in these testing times.

“It’s hard work,” she says. “But you have to keep innovating.”