Why Pernod Ricard has its eye on the multi-billion-dollar IoT opportunity with its connected cocktail maker
A tech conference and FMCG business might seem like an odd fit but for Pernod Ricard being at the Consumer Electronics Show (CES) in Las Vegas is a “no-brainer” in its bid to gain a larger share of the at-home drinking market.
Its connected cocktail maker was the crown jewel in its presentation there, and far from being a marketing gimmick Pernod sees a genuine business goal for the tech. “Today most of the [alcohol] consumption is happening at home for our products so we hope to increase our market share with this,” explained Alain Dufossé, managing director of Pernod Ricard’s Breakthrough Innovation Group (BIG).
Why Pernod Ricard has its eye on the multi-billion-dollar IoT opportunity with its connected cocktail maker.
The “this” he refers to is Opn, the name given to the connected cocktail maker that originates from the ‘Gutenberg Project’ - the codeword for its 'bar-at-home' trials - which began three years ago.
Looking like a connected bookshelf, Opn consists of a tray that links six cartridges, each filled with one of 29 Pernod Ricard brands, to an app that tracks how full each is and displays what cocktails can be made with the amounts available. So, if someone likes fruity cocktails, for example, the app can recommend a selection before going through a step-by-step guide on how to make it, all the while learning about the types of cocktails and brands a person prefers to personalise recommendations.
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This feature becomes even more interesting from a marketing perspective if that chosen cocktail has, say, Martell cognac in it, arguably a brand the average person might not have thought to try.
Whether Opn can introduce people to new spirits will become clearer once it’s assessed the 150 tests that have been conducted over the last few months in France, Spain, Germany, Russia and the UK. A larger trial launches in Paris later this month, with 200 people set to take part. All insights gathered during this trial period will help inform tweaks to the design, business strategy and the marketing for 2018’s prospective launch date.
“We know who isn’t the target for Opn; those that don’t host, who drink mainly wine, beer or champagne and they don’t live in a city or have connected devices,” said Tristan Capelier, Opn’s project lead at BIG. “We don’t know who will it will target specifically but that’s why we do the pilot so that we can define and understand who are audiences and what they like.”
Given it is yet to put Opn through its paces, Pernod Ricard was tightlipped on how much either the dock or cartridges will cost as well as how it might be sold in case things change. However, during the trial Capelier said that people can order new cartridges, which are recyclable, and have it at their door in an Amazon-style delivery box “in 30 minutes to an hour”. A home delivery service provider has been brought on board to fulfil that claim.
By selling the cartridges, it paves the way for Pernod Ricard to have a more robust e-commerce strategy, one that isn’t dependent on supermarkets to generate any sufficient scale. While they are mindful of the potential of e-commerce, alcohol producers to date have waded warily into the space, mindful of upsetting retailers, while they have struggled to create a compelling reason for why someone would want to buy their alcohol online in the first place.
For Opn, the reason comes back to Dufossé’s observation that more people are drinking at home: “Making cocktails at home is something a lot of people are interested in but they don’t always have the knowledge or the time to assemble what they need,” he continued.
“Clearly this ecosystem is really designed around taking the pain out of doing that. Our initial insight was that people don’t want to have a device like a Nespresso machine that makes a Negroni or a Cosmopolitan at the push of a button. It takes all the magic out of making cocktails for people and so our view was let’s come up with something that doesn’t compromise our spirits.”
A three-year development process is testament to the complexity of this vision, with the inner workings of Opn going through a radical overhaul even though its outward design has remained relatively unchanged since its debut. From finding the right recyclable, waterproof material for the cartridges to designing a pump that can work without a battery and goes against how spirits are usually poured by pulling the liquid down instead of up, it’s unique design is part of the reason BIG aren’t worried about imitators.
“We’ve bet on the interest of the individuals to get involved in making cocktails rather than them making everything so simple that it takes out all the magic,” said Capelier. “Now, there are lot of businesses trying to crack this area as seen by Suntory taking a stake Bartesian, a Canadian startup that makes at-home cocktail machines. They aren’t Opn in the sense that everything is so simple that it takes out all the magic.”
A site will run alongside the app and the product, showcasing videos and tips from influencers picked to help people put on a dinner party, spanning food enthusiasts to DJs.
Time will tell whether drinkers share this belief but the potential for Pernod Ricard is clear; according to research from Statista, in 2020 the value of the global smart home market will reach $43bn, nearly triple its value in 2014. Indeed, there are other projects currently being worked on by BIG to break into this market in the hope of creating new moments for people to drink its brands.