Once upon a time, seemingly aeons ago, wine bars and cafes were exotic things in Australian cities. These days, however, you can hardly walk down a Sydney or Melbourne street without smelling the aroma of organic, single-origin, fresh-roasted Ethiopian coffee beans coming from yet another ultra-hip cafe; or marvelling that yet another boutique wine/gin/whisky/beer/vodka/pick-your-poison bar has opened.
This is what happens in sophisticated, cosmopolitan consumer cultures. Tastes refine as incomes go up and culture shifts. Where dad might have been happy with a Crown Lager, his son now prefers a Pirate Life IPA. Aunt Mildred reached for a bottle of Beefeater Gin for her nightly G&T, whereas her niece Bernice would think nothing of splashing the cash for a bottle of dry gin from trendy Tasmanian spirits maker Hellfire Bluff Distillery.
The alcoholic beverages industry has recognised the global impact of this growing sophistication for years, particularly through the growth and globalisation of wine drinking:
Premiumisation is arguably the most significant trend influencing the global alcoholic drinks market. Generally most regions and markets worldwide have seen consumers trading-up to higher-value products, across a wide range of categories.
Driving this trend in more developed markets such as the United States (US) and Australia has been increasingly astute consumers keen to explore unique and interesting products. In developing markets such as China, premiumisation has been largely due to the emergence of an aspirational middle class seeking to assert their status.
You can see the same process in foods and across all sorts of other consumer product sectors. Organic single-origin Ethiopian coffee has not displaced Nescafe 43. And beers like Crown can still be found in pubs and bottle shops across the country. But population sizes have increased and tastes have diversified and broadened. There’s a place for both mass market brands and niche boutique ones in developed markets. And there are more developed markets now than ever.
What’s changed is that it’s no longer just businesses or brands with mass market clout that can make a go of international markets. Two forces have worked in tandem to open up many more international markets to many more products: increased trade liberalisation and the digital revolution.
Smart and nimble smaller businesses can steal a march on their corporate cousins by identifying markets around the world that contain enough people with the right tastes or preferences to whom they can sell their product. Then, with the use of clever and targeted marketing, these businesses can find and talk to people more likely to become consumers of their product and possibly even brand loyalists.
This is something marketing guru Seth Godin has talked about often, and especially in his book Tribes: “Now, the Internet eliminates geography. This means that existing tribes are bigger, but more important, it means that there are now more tribes, smaller tribes, influential tribes, horizontal and vertical tribes, and tribes that could never have existed before.”
Communities where people who share the same values, aesthetics and life experiences have proliferated online, and these tribes are global. Those hipsters drinking single-origin coffee could be in New York, London, Melbourne, Seattle, Tel Aviv, Helsinki, Singapore and many other cities around the world.
Shared cultural values are important. Hipster culture is an obvious example of this, but far from the only one. In terms of consumer goods and services, children’s and baby products, health and wellness, and homewares and furnishings are all examples of sectors that often transcend national markets and can provide international markets that enable brands to achieve exponential scale. The successful brands are the ones that can galvanise and lead a tribe to follow them.
It’s important, of course, to drill down and unpack what a foreign market might actually look like for your business. When we talk about places like the US, China or India, we’re talking about countries with massive populations, which always sets the entrepreneurial pulse aflutter, but how many of those millions or even billions of people could you really sell to?
In terms of consumer products, are you looking at sophisticated urban markets, suburban families, or rural dwellers? Is the demographic profile you’ve established in your home market able to be replicated in these foreign markets, or do you need to rethink who would be interested in your product? These are questions any business looking to move into overseas markets would need to ask from the outset. But with the potential to grow and scale, these are questions well worth pondering.
More than ever, businesses can tap into international markets by cultivating communities of interest around their brand. Your tribe is no longer constrained by national boundaries; think digital, think global, and grow your brand worldwide.