Author: GentlemanOfBeer

Customers are trading up. When money is tighter all round, regardless of whether we’re “officially” in recession or austerity or not, we save our cash for the little luxuries, and will spend more on fewer, better purchases. This reason alone explains why overall beer volume has been in decline over the past decade, but craft, since being included in both on and off-trade statistics (both covered by CGA and Nielsen), has seen year on year growth, at a higher price per litre than mass-market competition (macro brewer lager, or otherwise).

What your portfolio says about you:

As engaged buyers, managers and leaders, when was the last time you examined your portfolio? How many lagers, gins, ales do you have, and crucially, what’s selling and what isn’t? The trend for craft beer and premium gins (which both aren’t going away BTW), leads us all to think we should have a broad and complex set of bottles in our fridges and on our shelves – but how many are selling? And in what volume? How are those brands supporting you? Do you have POS, staff training, mixer matching experiences with your teams? And if not, why not?! Your direct or distribution suppliers should be falling over themselves to offer education and training support to you – and if they’re not, there’s plenty out there that are.

Ask yourselves these questions:

• What are my key ranges? – be it spirits, wine, craft beers, macro lagers etc.
• Look at the sales data – which is selling, which isn’t?
• What suppliers will offer support to turn brands around, or increase the already great volume you’re producing for them?
• What ranges do you not cater to at all? – Craft Beer is getting close to 10% of the market in the UK, 1 in 10 people will be looking for one as their first choice, and will be disappointed if they can’t have something akin to this category.
• What ranges are you over-catering to? Are their 10 premium gins on your back bar, but only 5 sell in any decent volume – can you change the others up? Can you remove them altogether and engage in other up-and-coming areas of the spirit world?
• Do you have a non-alcoholic option in all categories? Yes – it’s easier than ever to cater to customers who want to both have the same taste experience as their colleagues, friends and families, but don’t want to feel left out with, let’s face it the boring option of mainstream soft drinks.

Ultimately, trial and error will lead you to a better place – unless, that is, you think about engaging your consumer base – my final thought here is to go directly to the source. Not all consumer opinion is valid, but accept feedback on a wide enough range, and you’ll find some patterns in what you could and should offer.

As we raise our glasses to a new decade, it is a good time to take stock and consider the huge shift in consumer attitude which has heavily influenced the drinks market and will continue to into the 2020’s.

For 2020 and beyond the “tinny” is set to continue to expand its market share, alongside draft premixes, low/no ABV and BIG flavour beers, here are the top five drink trends that you need to consider:

1. No & Low Alcohol continues to gain market share and win hearts and minds. More craft and multi-national breweries are developing and bringing to market NA versions of their most popular brands – and we’ll start to see more penetration of the on-trade market with the bigger pub and bar brands feature a NA option on draught (taking the lead example of a small range of M&B and Heineken Pubs in 2018/19). We’ll start to see an increase in NA equivalents for spirits and finally decent wine options. As we raise our glass to a new decade, it is a good time to take stock and consider the huge shift in consumer attitude which has heavily influenced the drinks market and will continue to into the 2020’s.

2. Canned options and draft for all types of alcoholic drink out there and true dominance of pe-mix spirits and cocktails. Canned and draft wine will finally take off and the public perception of cans as a “less classy” option compared to bottles will start to shake partly due to the graphic design and typography on the cans.

3. Hard Seltzer – finally will explode here in the UK in 2020. I expect the bigger US brands like White Claw, Truly and Bon & Viv are likely to be launched in early 2020, likely into the bigger tied pub and bar groups in Q1 range reviews. “Hard” versions of traditional soft options will also start to appear – imagine hard coffee, sodas, juices, tonics – expect to see alcoholic versions of your favourite soft brands!

4. BYOB – Taking cues from the independent “craft beer” venues, the bigger chains will start to add take-away options for draught beer within their bars. Off-trade grocers like Waitrose have  already piloted this in Oxford, but the success of the scheme will see a roll out to other similarly demographic-led stores. The next step will be major bar groups trialling this in key high-footfall, affluent consumer bars for a potential roll-out later in 2020.

5. “Craft” Lager – Certain craft beer brands are all about lager – Camden and Lost & Grounded notably – but expect every major craft brewery to produce a lager product that can both entice the craft curious consumer who isn’t quite ready for pale ales, IPA and real ale. This will also provide a “trading up” step for customers used to buying from macro brands like Heineken and Carlsberg.

Key Opportunities for 2020

Ensure that there are Non-alcoholic options in your venue! The biggest start to 2020 will be all about communicating this offering for Dry January, and enticing consumers out of their homes – or convincing them that the NA part of the market will be more healthy. “Healthier” drinking will also lead into the Hard Seltzer craze, where often these beverages are 100 calories or less. Make sure you have a “premium/craft” lager option on your bar – consumers are increasingly trading up on their draught lager drinking.

Article originally published in Catering Today, Dec 2019.