Consumers demanding more bang for their buck in bars
HAVING premium spirits brands on the gantry and offering quality long mixed drinks and cocktails has never been more important as the shift towards entertaining at home continues.
That was the message from spirits firms contacted by SLTN last week, who said it’s not just other bars that operators have to compete against.
Cheaper off-trade prices and the availability of pre-mixed cocktails in off-sales and supermarkets, coupled with the impact of the downturn on consumer spending, have prompted many to swap nights out for nights in.
But spirits companies reckon the on-trade has an ace up its sleeve: the ability to offer drinks and cocktails of a standard and quality consumers can’t recreate at home.
It’s a strategy pursued by Smirnoff and Gordon’s owner Diageo, which joined forces with soft drinks giant Coca-Cola Enterprises last April as part of a new drive to help the on-trade create quality long mixed spirit drinks all year round.
National commercial development manager David McGowan said the scheme has paid dividends.
“There’s no doubt consumers have become more discerning with what they spend and, therefore, they want better value for that,” he told SLTN.
“People are defining value by the overall experience so it’s important suppliers like us help operators raise standards.
“We’ve seen a typical swing of between 6% and 7% in sales in outlets where the retailer delivers a consistent quality spirits serve. Given the profitability spirits tend to have in the overall drinks mix it can have a favourable impact on turnover.
It’s all very well having premium spirits on the back-bar but you need knowledgeable staff to sell them.
“Consumers are going out less but they’re prepared to spend more for a quality premium drink.”
It’s a view shared by Andy Gemmell of Maxxium UK, whose spirits portfolio includes Stolichnaya vodka, Brugal rum, Sauza Tequila and No 3 Gin.
“I think there’s a bit of rebellion – when people go out I think they want to spoil themselves and just say ‘stuff it’,” he told SLTN.
“In times like this, and when alcohol is much cheaper in the off-trade, bar owners have to up their game and serve quality drinks.
“It’s not even just competition from other bars now: bar owners need to give people reasons to come out of the house and reasons to return.
“It’s all very well having premium spirits on the back-bar but you need knowledgeable and trained staff to sell them and serve quality drinks.”
The firm behind Absolut vodka and Havana Club rum is also emphasising the importance of the serve when it comes to premium spirits.
Through its recently-launched Premium Edge initiative, Pernod Ricard UK aims to help operators boost sales of premium spirits through four concepts: make it available, make it easy to find, make it compelling and make it great to drink.
On-trade support includes back-bar advice, trade education, advice on up-selling and ongoing support based on research and consumer insight.
Nick Yates, channel director for on-trade spirits at Pernod Ricard UK, said Premium Edge is designed to help licensees realise the “sizeable profit opportunity” premium spirits present.
“With more than £1 in every £3 spent on spirits being spent on premium spirits in the on-trade, it is important to stock premium spirits,” he said.
“With half of all spirits drinkers willing to pay more if an upsold offer is made, staff training can make a big difference to profit margins – staff that are able to create a perfect drink every time will encourage longer stays, trial and repeat visits.”
Simon Green, marketing director at Global Brands, said consumers are “looking for more from their night out”.
“The structure of the on-trade is changing and visits to pubs and clubs are becoming more occasional,” he said. “Consumers’ expectations are higher and people are spending their cash more wisely.
“To maximise this opportunity, outlets need to premiumise their drinks offering.”
Over to you, bartenders.