I recently read a LinkedIn post by Cheryl Buckingham which made me think about the ongoing debate about the authenticity of Spirit drinks/ brands and their content.
The challenge of being able to trust the authenticity of the alcohol product you are purchasing or consuming is particularly high, especially in emerging markets such as Russia (see copycat brand photo on the left) and China – see also news report link below. This is one of the key reasons why the Global Travel Retail (GTR) channel is sought after by consumers from those markets – it is all about trust!
The second challenge being posed on alcohol refers to the information being available about the product itself. My own personal opinion is that any relevant information on alcohol products should be made available to consumers. A good example of this has been taken voluntarily by Diageo via their responsible drinking website: DRINKiQ
The type of information shared with consumers by brand owners would include alcohol content (% ABV), allergens, nutritional information and any other information required – such as an explanation on ingredients for Scotch Whisky (such as the extract from DRINKiQ) below.
By law, Scotch Whisky must be wholly matured in Scotland, in oak casks for a period of not less than three years and to which no substance other than water and spirit caramel has been added. Caramel has traditionally been added only to adjust the colour of the batched product to match the standard of the specific brand.
The debate taking place amongst European politicians and bureaucrats is about how to have this information available to consumers in the European Union. One potential suggested solution (which would be made mandatory if legislation was put in place) is for nutritional information to be available on the label, on the language of the country where the product is being sold. This is not a very practical solution and does not recognise the operational challenges of how alcohol products are produced and distributed across the whole of Europe. It also does not recognise the GTR channel, its international consumer base and the value it brings in making authentic products accessible to a number of consumers.
Diageo’s DRINKiQ website solution could be extended onto the label as technological solutions are developed. A potential simple action is for a QR code (below) to be added to the product label linking the consumers to information available online by brand owners with the option for different languages and updates/ additional information to be more easily added.
Another option which works as a more advanced form of QR code, includes those being developed on Johnnie Walker with the use of RFID (radio frequency identification) and an interactive smart bottle concept. This option provides additional consumer benefits – from a higher engagement/ interaction with the brand, to a greater degree of trust on the authenticity of the liquid inside the bottle. The technology allows to track the bottle across the supply chain and also to check if the factory seal has been broken.
The debate rages on – at least in the European Union – and politicians will continue to discuss the topic. For reference if interested in exploring this further – here are some additional links and information on the topic.
The EU initiatives on alcohol include:
- European Commission’s report on alcohol labelling and information to consumers
- EU Action Plan on non-communicable diseases
- Draft Council Conclusions “Towards a EU strategy on the reduction of alcohol related harm”
Below is the position by Spirits Europe and also ETRC – both of whom represent certain stakeholders in the Europe region – such as brand owners or the actual GTR industry.
Case study: New EU law on food information to consumers (FIC Regulation)
– The new EU Regulation 1169/2011 on the provision of food information to consumers, applying since 13 December 2014, has caused significant problems for the food and confectionery categories in the DFTR (Duty Free Travel Retail) channel.
– The key issue for DFTR has been the requirements by some Member States to label products sold within their territory in the national language(s). While this has some merits for the domestic market, it simply does not suit the specificities of the DFTR channel, both in terms of the consumers involved and the business
environment. Even worse, these requirements do not increase consumer information in the channel, since most passengers come from other countries and don’t speak the local language.
– The outcome of full compliance with the legislation will be the fragmentation of the offer, logistical cost increases and the withdrawal of products from the smaller markets, resulting in less consumer choice. This would have cascading effects on airport income, airline fares and European connectivity.
– The European Commission is due to publish a report on the application of the FIC provisions to alcohol beverages. While ETRC is satisfied with the current exemption of alcohol products from these provisions, as an organisation representing retailers, ETRC does not concern itself with whether alcohol beverages should or should not carry extended information on the label. Retailers receive the products from producers on the basis that all relevant legislation has been complied with.
– However, should it be decided that the FIC Regulation applies to alcohol beverages, ETRC strongly urges regulators to recognize the specificities of DFTR, and allow for the required information to be provided in new and innovative ways not necessarily on the label.
Note: All views on this post are my own and may not necessarily reflect the views of my employer. Others quoted on this post were used for context only.
This blog was originally published in September 2015 on LinkedIn