Diageo’s drinks factory
DEEP inside a large warehouse on an industrial estate in North-West London is a full-sized supermarket, a pub, and a cash-and-carry. And none have ever served a single customer, writes RupertSteiner.
The dummy stores are part of the research and development arm of drinks giant Diageo, which uses full scale replicas to simulate how its products look in different environments.
The maker of Smirnoff Vodka and Guinness opened the doors to its innovation centre yesterday as it announced a raft of new products backed by a £10m marketing budget.
It will start selling Guinness Golden Ale next month along with a Cider infused with Pimms, a strawberry flavoured Pimms and Captain Morgan White Rum.
New ideas such as this are the lifeblood of the FTSE 100 firm’s future growth.
In the UK products hatched by the innovation centre accounted for just 3pc of sales five years ago but grew to 14pc last year.
Louise Robinson, head of innovation, says this will grow to 20pc by 2018. The state of the art R&D centre in Park Royal, London, is what Diageo uses to showcase its products to supermarket customers such as Tesco and Sainsbury’s.
By demonstrating how products look on the shelves, complete with promotional signage, it forms the basis for a negotiation on price.
Diageo pays to place its products in a premier position at the supermarkets.
It even has virtual reality software which recreates the inside of a supermarket beaming the image on a giant screen.
Customers can simulate what it would look like walking into their grocery store and move products around into different positions in real time. This has cut the time it takes to agree deals from 10 weeks to two weeks because buyers used to have to physically recreate the various scenarios.
Robinson said: ‘The birth of an idea will come from spotting a new trend such as the popularity of elderflower and then establishing how that could be translated back to one of our brands. We then get inspiration in one of our labs “stretching and screening” ideas and once we have what we call a gold standard it goes to commercial who work out how to make it financially viable.’