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| This January I thought I would try something new, so I bought myself three bottles of non-alcoholic spirits. As well as satisfying my own curiosity, I thought it would help me stay a little ‘drier’ slightly longer during lockdown than might otherwise be the case. I am fascinated by innovation, the origins of great new products and services, and the people who bring them to market. Trying something new or different is often at the heart of many such success stories, along with a single-minded determination to pursue an idea and turn it into a commercial success. The non-alcoholic spirits sector is a case in point. In a little over five years a whole new drinks category has emerged, with consumers now willing to spend significantly more than they would for a bottle of vodka or gin on something without a drop of booze in it. The Everleaf cost me £18.00, the Lyre’s £23.50 and the Seedlip £26.00. Arguably it all started in 2015 with Ben Branson (no relation), his family farm in Lincolnshire, a disappointing mocktail experience and a book called “The Art of Distillation” published in 1651. And so Seedlip was born, at least according to the company’s own mythology. Where they led others have followed and there are now 42 UK-based non-alcoholic spirit brands (Source: DV Hot Brands Market Survey 2020). |
| I think this tells us as much about so-called Big Business as it does about these beverage pioneers and their bottles of innovation. I call it “the curse of incumbency”. For all their new product development teams, marketing resources and research budgets, it was not the big drinks companies that developed this new category. One can imagine that Diageo thought it was a sprits business, while Coca-Cola was too busy carbonating and Britvic concentrating on, well, concentrates. Trapped by their own or other people’s definitions of “what these businesses do”, and constrained by their existing products and ways of doing things, large organisations can find it challenging to take the bold steps that are required to drive innovation. It is why Tesla is worth nearly nine times more than Ford & General Motors combined, while Airbnb is worth four times as much as Hilton & Intercontinental Hotels combined. And, famously, why Blockbuster turned down the opportunity to buy Netflix. Investors and business owners alike need to be forever alert to new opportunities and guard against the curse of incumbency. Otherwise, like Diageo which has now bought Seedlip (Source: diageo.com, 7th August 2019), the only alternative may be to acquire, or be acquired, to survive. |