By James Atkinson
Diageo’s unprecedented decision to display a predetermined price on the packaging of a new line of Smirnoff-branded wine coolers has not found favour with retailers.
Launched in late December, the Smirnoff Coolers Limited Edition range comprises three flavours: Electric Citrus (lemon flavour); Berry Fusion (raspberry flavour); and Passion Twist (passionfruit flavour).
They are available in packs of four for a recommend retail price of $14.99, which is clearly marked on the product’s exterior.
While Coca-Cola recently launched price-marked 250ml coloured cans, the practice is never before seen on alcoholic beverages in Australia, Porter's Liquor general manager Giuseppe Minissale told TheShout.
“In the long term, if this becomes the norm then they would be setting the margin expectations per SKU and the bigger customers would get a better margin at that price,” he said.
“Nobody’s given me the justification on why they’ve decided to put a price point on it.
“Imagine if it was on a core product you had to range. That would cause a lot of consternation and concern,” Minissale added.
A Diageo spokesperson said: “We know shoppers perceive price marked packs as a message that conveys extra value, which supports shopper confidence, especially for limited edition offers.”
“The decision of final price sits with our customers and any price we suggest is recommended only.”
But this argument was rubbished by another banner group boss, who challenged any marketing department to convince a consumer they should pay a higher price than what has been pre-labelled.
“Rest assured this banner group will not be accepting any pre-merchandise priced products,” he told TheShout.
Smirnoff Coolers wine-based
The Smirnoff Coolers are in fact wine-based, which is another first for the vodka brand in Australia.
“Smirnoff is a brand which is very popular with light pre-mix drinkers, particularly during the summer months,” the Diageo spokesperson said.
“We therefore felt it was the best brand under which to launch this exciting innovation to the Australian market.”
“This is not the first time we’ve launched a non-spirit based pre-mix drink under the Smirnoff brand. For example, in North America, Smirnoff Ice is a malt-based drink.”
The spokesperson said Smirnoff Limited Edition Coolers are available in independent retailers nationally.
This pre-packaged price maintenance is probably the worst thing that can happen to our Industry. I am almost sure Diageo has not got any retailer involvement. Retailers have enough trouble now trying to make margin to survive. I strongly suggest that Diageo researches their NPD through retailers before dumping it on the market. Not a great start for Diageo in 2015!
Couple of things on this product specifically,
I would never accept a pre-packaged price product,as suppliers don’t care about or know a retailers overheads. I decide the price in my store,not the supplier.
I think the consumer will feel duped when they realise that they are buying a wine based product and not a spirit based product (vodka -which smirnoff is synonymous with)
Diageo generally treats the independent channel as collective idiots.
I vote this product Smirnoff fusion cooler by taste, looking for an exciting new drink we found it in the Thirsty camel in Cowra whilst on Holidays and we have been searching for it ever since. It was refreshing and tasty.
Looking forward to seeing it coming to a shop closer to our home
I can see why retailers have a problem with Smirnoff on this one. On the flip side, I totally understand their reason for doing it…
Its a new product, that has the potential to be massive for Smirnoff, but the premix drink niche is a tough one to crack, people have their favourites and it can be hard to sway them en mass to a new line.
Smirnoff wants these priced to walk out the door. pricing them so attractively is going to make people want to try them, and after doing just that I think Smirnoff is on to a winner.
Great to see that the product didn’t make out into the trade.But then again who isn’t surprised.When was the last time a Diageo rep walked into a independent retailer.