The cost of living crisis could encourage fewer visits but better products
PUB and bar customers are said to have been trading up for some time now, with premium products – whether it’s beer, cider or spirits – accounting for the majority of growth in on-trade drinks sales.
This ‘less but better’ approach to hospitality has reportedly seen many consumers visiting premises less often but willing to spend more on those occasions they are out in the trade.
The pattern is said to have continued in 2022 as venues fully reopen and customers return to hospitality.
“Premiumisation is a continuous trend as consumers recover from the impact of the pandemic and look to make the most of their nights out,” said Johnny Dennys, head of brand and trade marketing at Mast-Jägermeister UK.
“As consumers are returning to the on-trade, they continue to look for brands that offer a sense of discovery.
“Consumers are becoming more adventurous in their drink choices, stepping outside of their comfort zone to enrich their experience.”
Gavin Millar, UK brand ambassador for Don Papa Rum, agreed, saying premium spirits have been “performing exceptionally well in the Scottish on-trade”.
“I believe this is due to the guests having a greater knowledge of the spirits industry and a wide range of choice in every category,” said Millar.
“This is also a testament to the variety that Scottish licensed premises have been offering.”
And it’s a trend drinks companies said they expect to continue as the cost of living crisis bites in the latter part of the year.
“The cost of living is having an effect on all aspects of our spending, and this is translated into our drinks of choice,” said Millar.
“Guests are choosing quality with their hard-earned money, whilst they may not be having as many drinks, they are certainly having higher quality spirits.”
That was echoed by Wil Pugh Williams, national sales manager for rum distributor Spiribam.
“We anticipate that, in tightening their belts, consumers will visit the trade less but will look for more fulfilling experiences when they do so, seeking a more diverse and premium offering,” he said.
Dennys at Mast-Jägermeister UK said that, as the cost of living continues to rise, “consumers are likely to pick and choose when and why they go out”.
“Consumers want to have the best experience and choosing a premium spirit is an affordable luxury,” said Dennys. “Consumers are looking for brands with provenance and a strong heritage.”
Highlighting the range in menus and chalkboards will be key to raising awareness of the products a venue is stocking, said Jennifer Runciman, head of category development for the on-trade at Diageo.
“When it comes to merchandising your range of spirits – visibility is key,” said Runciman.
“We suggest including costs clearly on menus and any promotions that are on offer are written on chalkboards, shared via social media or included in brochure holders that can be placed on tables.”
And Pugh Williams at Spiribam advised licensees to engage with brand owners and suppliers “who can offer category insight and expertise”.
“Spiribam UK, as a leading premium rum specialist, provides support on the ground to help train licensees, optimise their range and advise on pricing with a view of maximising sales,” said Pugh Williams.