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Three PRs and a smattering of staff are waiting outside Diageo's high-security innovation lab in the wilds of Essex. There is a sense of anticipation, and the drinks giant's employees seem slightly nervous at the prospect of the press nosing around their inner sanctum.

Standing in a spotless lab reminiscent of a school chemistry classroom, Diageo brand innovation group director Steve Wilson explains how the company is finding ways of taking existing brands and making them accessible to new consumers - or to consumers in different drinking situations.

It has developed Baileys Glide, for example, to encourage drinkers of the cream liqueur to enter into the culture of buying rounds with friends. Baileys itself is drunk in small measures, meaning it doesn't last as long as a pint of beer or glass of wine. So Baileys Glide was created to 'lengthen' the drink - diluting its ABV from 17% to 4% to allow people to drink more.

This unusual factory tour is designed to showcase the fact that Diageo is not lacking in scientific know-how when it comes to creating drinks.

There is the Flavour Library - reminiscent of Damien Hirst's Pharmacy - with numerous chemical reproductions of natural tastes. There is the eerie red lighting, blue glasses and computers of the Sensory Booths, where 'supertasters' help identify flavour fingerprints for drinks. And finally, there is the Pilot Plant, with scaled-down versions of machines designed to produce small quantities of drinks so they can be tested.

In the Pilot Plant, Wilson points to a machine that takes flat beer and removes colour and flavour, allowing Diageo to add its own. "We can turn water into wine," he says.

Magical charm

Such mysticism is central to what Diageo is trying to communicate. When asked exactly what is added to Baileys to make Glide, Wilson refuses to answer. "There's a lot of value in the magic," he says. "We want to create an experience. Listing ingredients would ruin that."

So why was Marketing invited inside the factory at all? The answer is a newfound dedication to self-promotion. By its own admission, the company is keen to be more open with the press.

Diageo's PR agency Cohn & Wolfe, which organised the tour of the lab, has been briefed to "raise the profile of the Diageo brand". But one stumbling block is that the word 'Diageo' lacks personality.

It is one of those names - like Consignia, Centrica, Accenture and Ocado - that is deliberately meaningless, but as free of negative associations as possible.

Yet this is the world's biggest premium drinks business. Its GB arm alone boasted a turnover of £847m in the six months to December 2003, but its brands - some of the most famous names in the country, from Archers and Smirnoff to Gordon's and Guinness - completely overshadow the identity of their parent company. Which was fine. Until now.

Diageo head of brand communications Alicia Tetlow explains: "For the past five years we have been focusing on mergers, acquisitions and separating Burger King from the business.

"Now we have one name, one agenda and a focus on premium drinks. We want to be seen as one of the world's most respected consumer drinks companies - which means letting people know what we stand for."

In short, Tetlow wants Diageo to be famous for its innovation. So does this focus on brand mean we can expect to see it follow Nestle and Unilever by stamping its logo across its product portfolio? It seems unlikely.

"I'm not sure it's important for consumers to know about Diageo," says Tetlow. "I can't see there ever being a Diageo-branded product."

Cool culture

Indeed, stakeholders rather than consumers are the immediate target. Datamonitor analyst Tony Band thinks this is wise. "I don't believe that having a visible corporate brand matters in the alcohol industry. Consumers are very loyal to their drinks brands."

Band also believes that consumers trust the alcohol industry to be closely regulated, with strict penalties for companies that lie about the content of their drinks. So a corporate logo is not necessary to reassure drinkers that what they are drinking is of high quality. As long as the brand is deemed cool, that's enough.

This is a sentiment echoed by Wilson, who applies it to Diageo's approach to marketing products. "Before we spend lots of money, we need to ensure we have consumer buy-in - the cool dimension," he says.

Huw Pennell is marketing director of Maxxium UK, the company responsible for marketing a large portfolio of spirits brands in the UK, including Absolut vodka, Whyte & Mackay whisky and Cointreau liqueur. He believes Diageo is trying to highlight the level of innovation it has had to achieve to extend its high-profile brands.

Pennell is in favour of Diageo promoting its innovative image, because its size and clout means it acts as a positive influence on other drinks marketers. "If Diageo is trying to encourage innovation in the industry, it should be welcomed," he says.

More cynically, Band believes an innovative profile is crucial for Diageo because "it doesn't want to be perceived as a boring company in a declining industry - which is essentially what the spirits business is at the moment".

Critics question the longevity of some of Diageo's activity and how far it can push its existing brands. As Pennell says, the proof of how innovative it really is will be borne out by its long-term sales figures.

EXTENDING THE PORTFOLIO
Brand            Extensions
Archers          Archers Aqua
Baileys          Baileys Minis, Baileys Glide
Captain Morgan   Captain Morgan Spiced, Captain Morgan Gold (withdrawn
                in 2003)
Gordon's         Gordon's Edge (withdrawn in 2003)
Guinness         Guinness Extra Cold, Guinness Draught in bottles,
                Guinness Draught in cans, Guinness Extra Stout
Smirnoff         Smirnoff Ice, Smirnoff Black Ice, Smirnoff Mule

DIAGEO'S RESULTS

According to the company's half-year results, announced last week, Diageo's marketing spend on product launches in the UK fell by £11m in the six months to December 2003 compared with the six months to December 2002. Overall, marketing spend for Diageo GB in the same period declined by 5% from £84m to £80m.

Smirnoff ready-to-drink brands, including market leader Smirnoff Ice, fell 12% in volume sales and 20% in net sales. But its market share grew by nearly 3% to 28.4% of the category - an indication of the declining interest in pre-mixed drinks.

Diageo GB's overall turnover is up by 2% from £829m to £847m. Growth has been driven by a strong performance in wines; Diageo's Blossom Hill blends are now the biggest-selling wines in the UK.

Pimm's is another brand on the rise. A TV campaign focusing on its suitability as a summer drink helped push up volumes up by 34%. Guinness plans to increase its marketing spend in the second half of the financial year to improve performance in the on-trade.