Close-Up: Live Issue - Is the alcopop bubble about to burst?(Diageo PLC launches Smirnoff Ice )

After initially targeting 18- to 24-year-olds, RTDs now need adult appeal, Rachel Gardner writes.

When Diageo launched Smirnoff Ice in 1999, the alcopop boom that had begun at the beginning of that decade was still at its peak. Less than six years later, the brand is in danger of losing its cool as the fashion for the alcoholic ready-to-drink variants continue to wane.

In the same way the lager brands Harp and Double Diamond defined the 70s, so alcopops such as Hooch, Two Dogs and Smirnoff Ice did for the 90s. They launched as crucial brand extensions for drinks companies as a means of growth to satisfy shareholders.

But evidence that the pounds 1.3 billion RTD sector was under pressure became apparent when Diageo withdrew Gordon's Edge, its gin-based alcopop, from shelves in 2003. Sales of Archers Aqua are down 31 per cent year on year, according to AC Nielsen, but perhaps most noteworthly, last year, Coors Brewers pulled the plug on Hooch, the iconic drink that kick-started the whole phenomena.

Diageo has desperately tried to inject new life into its market-leading Smirnoff Ice brand in a bid to woo drinkers back. Like many others in the sector, it has undergone a packaging revamp, as well as repeated changes in its ad campaigns, from 'how clear is your conscience' to 'lyriquid perfection', which included a cringeworthy television spot starring the former EastEnders actor Dean Gaffney.

Despite a pounds 6 million ad budget for the brand, sales figures reveal a 12 per cent drop in volume sales for Smirnoff Ice in the UK alone.

Last week, in a further development, Bartle Bogle Hegarty was handed the pounds 20 million global ad account for all Smirnoff-branded RTD products.