Diageo toasts Internet of Things with innovation cocktail

Profile picture for user jtwentyman By Jessica Twentyman January 7, 2015
Summary:
In a brave new world of smart, connected products, even a bottle of whisky needs to up its game, says Venky Balakrishnan, global vice president of digital innovation at drinks giant Diageo.

diageo liquor
Attendees at this week’s Consumer Electronics Show (CES) in Las Vegas have been bombarded with examples of how everyday household objects, from washing machines to smoke detectors, are getting smarter by the day.

Here at diginomica, we’ve yet to hear of a smart drinks cabinet that can provide cocktail recipes based on its own contents - or helpfully put itself on lockdown past a certain point in the evening - but there’s probably one out there, and if there isn’t, it can’t be far off.

Either way, it’s now both technically and economically feasible to add processors and sensors to almost any item and connect it to the Internet of Things.

And in this brave new world of smart, connected products, even a bottle of whisky (or gin, or vodka, or brandy) needs to up its game, according to Venky Balakrishnan, global vice president of digital innovation at drinks company Diageo.

Balakrishnan leads the company’s Diageo Technology Ventures group, which is dedicated to unearthing new innovations and unlocking new growth opportunities for the £10.3 billion ($15.5bn) company, responsible for brands including Johnnie Walker, Smirnoff, Tanqueray and Guinness. The Internet of Things is just as a big focus for his group as it is for manufacturers of domestic appliances for the smart home, he says:

Our products may have fewer moving parts than a washing machine. They may be made to traditional recipes that in some cases go back centuries. But if you look at the context in which they exist - on a supermarket shelf or behind a bar or in a home - they’re increasingly surrounded by technology.

With the Internet of Things, every product needs to rise in intelligence to match the smartness that surrounds it. So we might make a traditional object - a bottle full of liquid - but that object exists in a very digital world.

Every day, he says, Internet users run millions of online searches on Diageo brand names: to investigate ingredients, compare prices or research suitable mixers. Somewhere between 50% and 60% of these searches take place within a few feet of where the product is purchased, he says:

Within close proximity, there’s a huge amount of digital interaction going on and digital information being consumed - so the marketing, branding and information about a product can no longer be confined to the actual real estate of the bottle itself.

Cheers!

In other words, by researching and experimenting with new advances in retail technology, image recognition, printing and data analytics, Balakrishnan and his team aim to connect physical bottles with the digital world, building a layer of data and services around every product sold.

This, in turn, will help the company track a bottle through the supply chain, capture data about the person that buys it and their shopping habits, tastes and preferences, and tailor marketing messages and offers accordingly.

cocktail glasses
A good deal of Diageo’s work in this area is focused on platform the company calls +More. It’s built on technology from British start-up Evrythng, which includes Samsung and Cisco among its backers.

Its cloud-based software, the Evrythng Engine, enables companies to connect physical products to the Web and assign a profile to each product - the ‘intelligence’ that allows a manufacturer like Diageo to track inventory and interact with purchasers of a specific product, if they’re willing to engage.

Other technologies and approaches are used, too, says Balakrishnan: what’s important is that the company grants him and his team a great deal of freedom when it comes to finding ways to use cutting-edge technology to tackle real-life business issues.

We try a lot of things. We have multiple irons in the fire, and multiple experiments against the same outcome. How can we leverage big data analytics? How can we build this smart infrastructure around our products? What about robotics?

We can only take the guesswork out of all of this by trying stuff, getting our hands dirty, learning stuff and taking those learnings forward.