Pour it up: What new products mean for the spirits industry
A machine that creates jello shots. A jello shot that doesn’t need refrigeration. Powdered alcohol.
When it comes to the alcohol industry, startups and products stand to create attention, which could lead older brands to step up their game.
Michael Stone, founder and CEO of Beanstalk, a global brand extension and licensing agency that works with clients like Diageo, discussed how the alcohol industry might want to brace for new products and startups.
Stone says, "10 years ago you had to rely on advertising, and how do you launch something new in the spirit category when you’re competing with advertising dollars of the giants in the industry?"
Now, social media has paved the way for easier product launches, and it’s forcing big companies to pay attention to new startups with innovative items. He mentioned some of Diageo’s new flavors as an example.
“As a result of that, you see more new, innovative things coming down the pike, and the big companies are taking notice," Stone says.
The art of making a jello shot becme high-tech recently, with a potentially game-changing product called Jevo.
The machine can produce 20 shots of alcoholic or non-alcoholic gelatin in just 10 minutes.
Food Dive noted last month it could only be a matter of time before it received backlash among concerned consumers, though to party-goers and college students, it could prove the perfect idea.
Beyond drinking for fun, a potential health care version is still in the works.
"Now we can have medications in the mix and it's easier to consume," the entrepreneur Jeff Jetton behind Jevo told the Portland Business Journal. "That’s when you start looking and seeing that it’s bigger than Jell-O shots and college kids."
Bombshell Brands formed about a year ago to launch Hot Rabbit — translated from the French term "Chaud Lapin" — a citrus-based wine product that tastes like vodka, according to the president and CEO of Bombshell Brands, Justin Near.
The product is shelf-stable and made from a proprietary blend of gelatin. It doesn’t require refrigeration, lasts for at least two years and remains in gelatin form at room temperature up to around 110 degrees before it liquifies.
"We created a custom cup that we own the tooling for," Near said. "What this allows for is people just to be able to squeeze the bottom and the product comes out of the cup."
Because it’s a citrus-based wine product and not hard liquor, it is less limited in terms of distribution — it can be sold in many more retail outlets.
Potential backlash, like Palcohol?
Despite the backlash around Palcohol, Near isn’t worried.
Each individual cup is 50 ml, and its alcohol by volume is only a little more than what a glass of wine would be. "When people hear shots they think very high alcohol levels, and what we did with this was we went with the 10% by volume," Near said. "Each one of our shots is only 20 proof."
While Food Dive has taken a deeper dive into Palcohol, the controversy surrounding the product has yet to settle down.
The Alcohol Tax and Trade Bureau (TTB) recently approved the product, but some states have outlawed it and many more have proposed bills this year. Palcohol founder Mark Phillips wants to soon start selling the product.
Food Dive caught up with TTB spokesman Tom Hogue regarding the approval process for new products. The organization reviews labels to make sure they do not mislead consumers.
Hogue said out of 142,434 label applications in fiscal year 2014, the organization approved 126,030. That’s a little under 90%. Hogue notes that not all approved products actually go on sale.
Hot Rabbit is currently available in Michigan and is approved in a number of other states. Near said of the approval game, "a lot of times, it’s simply just a process."
New products a threat?
Is Palcohol a threat to larger companies? Not as Stone sees it.
"While it does have a market — those who are traveling or packing up a car for a tailgate or any other activity in which space constraints are an issue — I do not see it taking traditional hard liquor’s seat at the table or really threatening hard liquor companies," Stone says. "It’s limited to a very narrow occasion."
Regarding Hot Rabbit, Jevo, and new products like them, he says, "(Millennials are) going to respond to things that they can take pictures of and share with their friends."
While these new companies may not necessarily be an immediate threat to a large company’s revenue and finances, it is in terms of being seen as innovative and reaching a target demographic, Stone added.
Editor's note: Think there are other products and startups we should keep an eye on? Shoot us an email at [email protected].