Why Aussie drinks companies should keep an eye on Amazon

Bain & Co's Yngve Andresen is predicting Amazon Australia boss Rocco Braeuniger will move to include alcohol in the online retailer's offering.

Braueniger was director of consumables at Amazon Germany, where alcohol has been a strong performer on the site. Amazon’s alcohol sales grew by 230% in Germany in 2017 according to research firm OneClick Retail.

Andresen was guest speaker this morning at Crown Melbourne for The Drinks Association's Network breakfast, discussing "Amazon is here – what’s next and what should Australian consumer goods companies do?"

He said Amazon would have the ability to be more agile on pricing than a retailer such as Dan Murphy's because it wasn't relying on updating its cost offering in bricks and mortar locations. 

Amazon finally arrived in Australia at the end of 2017 – to a muted reception. Andresen notes that while the initial launch might have been rushed and under delivered on expectations, it is poised to present the biggest retail disruption in a generation during 2018 and beyond.

Andresen's presentation explored the impact of Amazon on the Australian retail and consumer goods landscape long term and how Australian consumer good companies can adapt.

Andresen is a Partner in the Melbourne office of Bain & Company, where he is a member of Bain’s Australian Retail & Consumer Products leadership team, and the Asia-Pacific leadership team. He has more than 15 years consulting experience predominately in the retail and consumer goods sector working across a range of food, beverage and discretionary categories. 

He has also worked extensively with major grocery, wholesale, apparel and department store retailers in Australia, Asia and Europe. He specialises in customer strategy, large-scale growth and cost transformation, and mergers and acquisitions.

Drinks companies jump on board with Amazon

Andresen offered examples of ways drinks companies have been interacting with the platform.

Diageo, for example, has just launched 'Happy Hour' on Amazon Alexa-enabled devices, targeting the "at-home bartender".

By asking Alexa to "open Happy Hour," consumers access three key elements: 'Mix-It-Up', which explores what users are in the mood for and then suggest the perfect drink recipe for the occasion; 'Cheers', which offers a myriad of reasons to say "cheers", even specific to the day it might be; and 'Find a Bar' , which recommends a bar nearby to enjoy a Diageo cocktail.

"Making drinks for friends should be fun and stress-free and we're thrilled to introduce a skill that encourages responsible creation and enjoyment of cocktails in the home environment. Amazon will be the home of Diageo's interactive voice technology, and this experiential skill is built in a manner that easily allows for ongoing updates. We're looking forward to sharing new interactive elements in the coming months," commented Devin Nagy, Director, Technology and Emerging Platforms at Diageo North America.

Pernod Ricard meanwhile launched ‘What Cocktail?’ in December, which is compatible with the e-commerce giant’s brand new Amazon Show device. The skill is voice-controlled and guides consumers on what cocktail to make based on what ingredients they have at home, as well as for specific occasions such as Christmas or Halloween, and will also suggest “hacks” to add flair.

“Experimenting with smart technology is just one of the ways we are continuing our mission to shape the nation’s drinking experiences and we’re incredibly excited to be driving further innovation within the cocktail world,” said Sille Opstrup, head of digital for Pernod Ricard UK.

“Voice-activated products are changing how we interact with technology, and with voice-led searches already up to three times quicker than text-searching, and with experts predicting 50% of enquires will be made this way by 2020, now is the time to start connecting with audiences using this platform.”

Amazon is also believed to have undertaken initial talks with some Australian drinks companies about potential collaboration.

Andresen said Australian drinks companies should "plan for UK levels" of growth on Amazon, rather than Canada, where investment hasn't been as strong due to its proximity to the US market.

Alcohol sales on Amazon skyrocketed by 96% in the UK last year, with 34% of beer drinkers regularly purchasing online. 

Here are some photographs from this morning's event: