Guest Blog Q&A: Raise a glass to London Olympics 2012
Gulnida Toichieva, owner of Snow Queen Vodka, speaks to Quest about the alcoholic drinks industry
The Beers, Wines & Spirits sector is expected to fare well this summer as the nation prepares for sporting events and celebrations; do you feel that this is due to clever marketing or simply by a desire to celebrate by cash-strapped consumers?
This year we have the Euro 2012 football and the London 2012 Olympics. Clearly, having the Olympics in London should lead to a greater level of interest among the British public than having it abroad and the British tradition of watching sporting events with company over a few drinks will obviously lead to an increase in sales of alcohol related products. I’m sure there will be an increase in sales across the board regardless of ‘clever marketing’. Such strategies will undoubtedly sway customers towards one product or another but it’s also worth remembering that there is a level of brand loyalty out there which will also be a factor in determining the breakdown of market share.
You have worked in the industry for a number of years; how have you seen the UK market change over recent times and why do you think these changes have occurred?
Regardless of the state of the economy, there is a clear trend that customers are still upgrading to super-premium authentic products such as Snow Queen. There are more and more alcohol related products available to the British consumer and they are willing to experiment more and more with purchases to ascertain their preferred brand. In the capital, there is already a wide range of high end quality beverages available in bars and shops. There is a clear shift from quantity to quality and we are now seeing this trend develop outwards from London to high quality venues across the country. This is a trend I expect to see continue in the years to come as the customer becomes more educated and experienced regarding the products available to them.
Retailers are increasingly galvanising the alcohol industry as shoppers are encouraged by discounts offered by major grocers; what affect is this having on the drinks industry as a whole?
I am sure this is a problem for the entry level alcoholic beverages as it must be pushing their margins to a minimum. I suspect the larger companies with very high volume brands are able to offset these lower margins and consider the discounts as marketing exposure. If I was controlling a smaller lower priced product, I would be very concerned as it would be nearly impossible for a new brand to enter the market under these circumstances. I have not seen as much discounting with super-premium products such as Snow Queen and I do believe the customer is somewhat less price-sensitive at the higher end of the price spectrum.
What are your thoughts on the government’s plans to introduce alcohol minimum pricing and how do you think this will affect the retail industry?
This is very bad news for the cheapest products on the market as they are using their lower price as their principal marketing tool. Of course, if they are forced to raise their price up towards their nearest price competitors then the discount incentive is diminished and there is less motivation for a customer to purchase their product. The minimum pricing will have the added effect of making it less expensive (proportionately) for customers to trade-up to premium products which over time will assist the growth of the premium and super-premium sectors.
What qualities do you think are necessary to succeed within the alcohol industry?
Giving advice is always very difficult. For my part, I believe that the secret to success in any business is an exceptional quality product and strong united team of responsible professional people. This combination gives you guaranteed success.