Ignite

News and views for Cognosis clients

Dear Martin,

In the past decade premiumisation has been a major driver of value- and profit-growth. In the drinks industry, it’s likewise buoyed champagne, wine and beer. An estimated 60-80% of spirit sector value growth since 2001 has been driven by the premium dynamic.

We have asked ourselves: How well will premiums withstand recession? And when recovery comes, will it be ‘business as usual’, or should we expect a reshaping of the premium sector?

Our analysis suggests some big changes--not only in spirits but in premium brands generally. Rebounding consumer confidence won’t reignite the patterns of the past. The rate of premiumisation will reduce and the rules of premiumisation will reshape. We've identified '5 Futures for Premiums' post-recession--these apply to all premium brands.

Most clients we speak with are unclear about which scenario is likely to play out. Do you have a view? Are you planning accordingly? If you'd like to explore how these scenarios might play out in your business, give us a call.

Richard Brown, Managing Partner

Issue

30 / 10 / 2009

Five Futures for Premium

Based on analysis, consumer insights and client discussions, we see a range of premium scenarios

BOUNCEBACK

Economy recovers, GDP recovers and premium brands rebound strongly. However, appetite for 'irrational exuberance' will be held in check.

AUSTERITY AGENDA

Economic, social and political pressures conflate to form a future in which ostentatious ascetiscism gains ascendance.

LUXURY SHAME

Affluent consumers feel it necessary to conceal or play down premium purchases because of social pressure and rising unemployment.

NEW PLAYERS

Fresh waves of newly affluent consumers wanting to 'play' in the luxury playground who are pre-disposed to overt overstatement.

What scenario is your business planning in? Where do you see the key challenges for your business growth over the next 2-3 years?

Download a copy of Cognosis' 'Five Futures for Premium' >>

Increased government regulation & an anti-alcohol media agenda will inevitably impact the drinks industry. But most companies have done little to understand these implications or plan for the future. Why is that?

Cognosis' 'Dark Marketing' experience in the tobacco industry reveals a call to action for drinks players

With the impending regulations & restrictions on drinks brands’ ability to communicate to their audience, drinks companies need to ensure that their messaging is developing strong, memorable personalities in consumers’ minds. Before the restrictions of Dark Marketing are established, companies should introduce below-the-line campaigns to familiarise target audiences with that style of marketing. Furthermore, drinks brands should take a proactive approach to combating the binge drinking issue by promoting ‘intelligent enjoyment’ in their advertising messaging.

What implications will increased restrictions have on your business and your advertising messages? What processes do you have in place to identify changes in the industry and plan accordingly?

We are currently researching the links between alcohol consumption trends and government restrictions across 20 different markets. We are also discussing this topic with industry leaders and clients. Contact us to discuss and share your views.

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Cognosis News

Cognosis strengthens Board following growing success in 2009. John Hosking promoted to Partner.

We're delighted to announce that John Hosking has been promoted to Partner-a position he will hold alongside current Partners Richard Brown, Michael Laird and Mark Mathews.

During the four years John has worked at Cognosis he has played a key role in driving Cognosis' growth in the drinks and consumer goods sectors, managing key clients such as Diageo and InterContinental Hotels.

'John has contributed strongly to our growth since joining and exemplifies Cognosis' 'Whole-Minded' approach. We are very pleased to welcome him to the Board. His skills in leadership, strategy and change ensure that we enter 2010 with an exceptionally strong team.'
Richard Brown, Managing Partner at Cognosis

Please help us in congratulating John on this impressive career accomplishment.

Click here to read the full press release>>