The company’s chief innovation officer talks about the new pocket-sized Scotch ‘Hipster’.
Scotch whisky is a serious affair. You don’t expect to see it at some humdrum party or get-together. You can only expect to see those sleek bottles at a glittering event which the crème de la crème of the society grace. The event you’ve always aspired to get invited to. But, that was yesterday.
Times have changed and Diageo India, the alcohol beverage major, recently introduced ‘Hipster’. It is a portable Scotch whisky in a pocket-sized format. The company calls it a ‘disruptive innovation’.
We (afaqs!) caught up with Nitesh Chhapru, VP, marketing and business innovation, Diageo India, or simply its chief innovation officer, to talk about this new offering that’s a world away from the image people have of Scotch whisky.
What were the boardroom discussions that led to the introduction of the Scotch ‘Hipster’?
We do a lot of occasion-based marketing and the insight we gleaned was about the under-penetration of Scotch whisky. There are two factors which drive these brands: price and occasion. Because only the big bottles are available, their prices are on the higher side and, therefore, the highest levels of penetration was observed at special formal occasions.
We aimed to tap into the casual, lively and spontaneous occasions. But, it wasn’t practical with the big bottles and their pricing. In a casual setting, consumers look for style, and in the world of alcohol beverages, a packaging format like the hip flask works best. It is the kind of solution that can help us penetrate the category further, and that’s how we landed on this idea.
Who is the main audience for the ‘Hipster’? Is it the millennials?
Yes, they are, and we (Diageo) want to get our regular consumers, who’d never imagine Scotch whisky outside a formal setting, to consider them in more casual settings. Our communication is around the bottle that is designed to induce style and spontaneity, and we wish to build on it.
What are the ‘casual’ occasions you’re referring to?
We have an occasion-based framework. Casual here can range from something as basic as two friends catching up after work on a Friday evening, to few friends meeting each other at one of their homes.
It can also mean a small get-together to watch a live match together, like the Indian Premier League (IPL) finals. At these occasions, we want people to consider the new hip flasks...
People have tightened their purses. As a ‘premium’ product, are you worried?
I’d mention the ‘lipstick effect’ (coined in 2001 by Leonard Lauder, chairman of Estée Lauder), where people, during economic gloom, postpone luxury spending, but invest in small everyday treats and indulgences. L'Oréal sales surged in the first half during the 2008 crisis. Small everyday treats actually see a benefit, thanks to the ‘lipstick effect’, and history has proved that.
In-home consumption has increased, but bars and restaurants have also started opening now. Your communication will be aimed at which of the two (or both)?
The Coronavirus pandemic and the subsequent lockdowns were a dynamic and unpredictable situation. Yes, we’ve seen an increase in in-home consumption. I will say that our focus point is a canvas of occasions that’s in-home as well as out of home… We have a gamut of occasions, and most companies are working through dynamic data and trying to understand it real-time by keeping ears to the ground.
We’ve seen the government open (‘unlock’), and now it all depends on how consumers will react and spend their money.