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Gordon's Edge vs Gordon Brown

22-Apr-2003

Much has been written - on this website and elsewhere - about the continued success of the ready-to-drink (RTD) spirits sector, in particular in the UK. But this success has not been shared by every brand, and for every Smirnoff Ice there are many other products which do not survive.

One such brand is Gordon's Edge, a gin-based premix, which is to be withdrawn from the British market after failing to win over consumers. While the disappearance of another RTD brand is not in itself particularly surprising, what makes this withdrawal different from the others is the fact that it has been made by Diageo, the company which has arguably been the most successful at handling the UK RTD sector.

 

Diageo has been phenomenally successful with its Smirnoff Ice and Smirnoff Mule RTD brands, with only Bacardi Breezer, from Bacardi-Martini, able to rival this success. But while these vodka- and rum-based products have appealed to consumers, the gin-based one clearly did not.

 

Diageo has consistently said that Gordon's Edge was not performing as had been hoped, and the withdrawal is not, therefore, a huge surprise, but it does underline the difficulties facing companies wanting to launch successful products in this still dynamic market. The opportunities for growth are there, but in the RTD market more than any other, it seems, this growth is entirely dependent on launching the right product.

 

Among the reasons cited by Diageo for the failure of Gordon's Edge is the increase in taxes payable on RTD products since the 2002 Budget - another example of the UK Chancellor Gordon Brown seeing the drinks industry as a big earner without thinking about the long term consequences?

 

"We launched Gordon's Edge into a crowded market place at a time of uncertainty due to the duty-driven RTD price increases. Since that time, Gordon's Edge has not been distinctive enough versus other recent RTD introductions to meet the high rate of sale expectations set by Diageo," Diageo said in a statement.

 

"Therefore, we have decided to cease production of Gordon's Edge. This does not affect our commitment to the RTD category - we will continue to invest and innovate. Nor will it affect our investment on Gordon's, which is in great shape and continues to be an important brand for us."

 

Gin has in fact been a difficult sector to innovate in, and there are few truly different brands - although most of the major gin brands would argue that they each have a distinctive flavour. Allied Domecq recently launched a pear-infused gin, Wet by Beefeater, in the US, but that was not an RTD in the classic sense, although a smaller format version could be launched if the main brand proves a success.

 

Nor are rum-based drinks a sure-fire success, despite the performance of Bacardi Breezer. Diageo's own Captain Morgan Gold rum-based RTD was withdrawn from the US market last year after it failed to win over consumers there.

 

Diageo and Bacardi are the only two of the major drinks groups to have invested heavily in RTD brands in the UK over the last few years. As well as Smirnoff Ice and Bacardi Breezer, both companies have been successful with schnapps-based brands - Archers Aqua in the case of Diageo and Metz in the case of Bacardi.

 

Allied Domecq currently has no UK RTD brands, while Pernod Ricard's Hex brand was shortlived (although the newly launched Ricard Bouteille brand could cross the channel if it proves a success in France). Some smaller players, such as Red Square or WKD have also carved a niche for themselves in the UK, but it is still hard for companies, large or small, to make their mark, despite continued consumer demand.