Robert Novick is the founder of New York-based consultancy Zero to Sixty Beverage, which provides strategic sales advice across premium alcoholic and non-alcoholic beverages. This comment article was initially posted by Novick on LinkedIn. Head here to add your comments.
‘Stop being poor.’
That’s my reaction when people ask me why premium non-alcoholic drinks cost as much as drinks that contain alcohol.
Well … not really. But maybe. Sort of. In a way.
A major mistake I see a lot of non-alcoholic brands make is to start rationalising their pricing based on input costs and premium ingredients and yield loss due to dealcoholisation processes and the like.
Nobody cares.
Anybody who views the primary value in a beverage as its alcohol content is never going to value a non-alcoholic beverage in the same way. The fault here is trying to defend pricing to someone who is not your customer, and will likely never be your customer. It’s a waste of your time and theirs, because you think you’re having the same conversation.
But, you’re not.
A large part of this phenomenon stems from people drastically overstating the size of the perceived market for premium non-alc beverages. By and large, the people who are currently experimenting with premium alcohol alternatives are not people who are consumers of commodity beverage alcohol.
There’s a chance that they eventually will be, but if you’re spending time and money trying to convince someone of the viability of your entire category, then that’s a grim return-on-investment as there’s a vanishingly small chance that person will convert to a customer of your specific product.
The typical consumer of premium non-alc in the on-premise tends to also consume … premium alcoholic beverages – a shocking revelation to be sure. Not only do consumers want to drink better when they do drink alcohol, but they also want to drink better when they are not.
My advice? Know who your customer actually is, know where they eat and drink and know how much they like to spend, then target them with intention.
