Diageo Opens a Data-Based 'Collaboration Center' to Keep Pace With a Changing Alcohol Industry

Staying on top of what shoppers want is a difficult task for any corporation, but spirits maker Diageo hopes its latest investment will help it do just that. Today, the London-based company behind Smirnoff, Crown Royal and Don Julio is unveiling a new facility dedicated to examining consumer behavior and generating industry insights to better position itself for the future. The Diageo Collaboration Center, a 17,000-square-foot space located on Diageo’s campus in Stamford, Connecticut, is open to business partners ranging from retailers to distributors to agencies. "We see the opportunity to take all of the incredible resources we've developed over the last five to 10 years, in terms of understanding consumers and shoppers, and bring them to our customers, distributors and agencies in a way that stimulates a lot of great innovative thinking," Steve Wallet, Diageo’s vp of category development, shopper marketing and ecommerce, told Adweek. In addition to looking at syndicated sales data and loyalty card information, Diageo's research efforts involve custom analysis, a shopper panel comprising 6,000 members and in-store video tracking technology that studies what consumers do and how they spend their time in a retail environment. The Collaboration Center, which took two years to build, is situated next to Diageo’s North American innovation lab, where employees test and develop new products. For visitors who can't attend the new facility in person, Diageo is also offering a virtual experience. Industry trends One change in the alcohol industry is the rise of ordering booze online—an option that has grown in popularity during a year of quarantine. While digital sales captured just 1% of all off-premise alcohol volume in the U.S. in 2019, that figure is expected to hit 7% by 2024, according to research group IWSR Drinks Market Analysis. In February, Uber purchased alcohol delivery service Drizly for $1.1 billion, adding another dimension to its expanding food-delivery business under Uber Eats. “We see no signs of slowing down for alcohol ecommerce,” Scott Braun, CMO of Drizly, told Adweek. “At this point, we are attracting three times as many new consumers to Drizly on a monthly basis than we were pre-pandemic.” Wallet noted the desire for convenience, as seen in the spread of ecommerce, has improved Diageo's access to data. "The ability to interact and retarget consumers has really improved over the last year," he said. Another shift for the industry involves what people are drinking. Demand for hard seltzers and ready-to-drink cocktails has boomed in recent years, leading Diageo to acquire vodka-based beverage brand Loyal 9 and tequila-infused Lone River Ranch Water earlier this year. U.S. retail sales of hard seltzer jumped 160% to $4.1 billion in 2020, while canned cocktails rose 79% to $664 million, according to figures from NielsenIQ. With bars, restaurants, arenas and night clubs either closed or running at limited capacity during the pandemic, alcohol companies have lost traditional avenues for getting their products to consumers, hurting income. Diageo’s total year-over-year organic revenue during the second half of 2020 was largely flat, up 1%. In North America, where the majority of shoppers tend to buy spirits at supermarkets and liquor stores, sales were up 12% during the same period.