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Spirits are leading the charge in the off-trade. But if you’re a retailer, how do you maintain the momentum and what can you learn from your cousins in the on-trade? (Yes, I know, it always seems to boil down to what those flashy relatives are doing with their sparkly bars, but we know that the off-trade matters just as much!)
Firstly, keep your eye firmly on staying in front of the current trends, rather than following them. For example, if people are drinking less, offer them the opportunity to drink better, and position yourself to offer premium options in each category. Take time to talk to a range of producers, not just the big guys, and keep a close eye on what’s happening in the on-trade. Likely as not, it’s a damn good predictor of what will hit the off-trade.
Next, think depth as well as breadth within each category that you stock. What do we mean by that? Let’s take rum for instance – make sure you’re not offering all your range at the same price point; rather opt for different trends, styles and price points covered to offer the consumer choice. Of course, this requires a degree of bravery from your buyers. At a time when many are focused on Brexit, tariffs and production, we need to move the conversation on from price: ultimately just promoting premium brands is a short-term solution.
Looking at spirits for 2020, for me tequila, vermouth, rum and what I think of as proper gin are showing promise. We’re seeing strong signs of an acceleration in the growth in demand for tequila at the quality end of the market, as people are now finding it a very rewarding category. There’s also a lot of noise about vermouth, as the on-trade apply their creativity to this versatile liquid, particularly to support lower ABV drinks. This is reawakening interest from consumers, seeing that they can create simple serves at home. Rum continues to look very promising for 2020, but be aware that some of the niche categories such as mezcal may not offer what most retailers need. I’m also anticipating a resurgence in interest for quality, proper gin as there starts to be a back lash from the sugar loaded, artificially flavoured and coloured gins that have been trending recently.
But beware. There are a number of challenges for the off-trade. Too many buyers are focusing on price and that leads to some poor offerings. Currency fluctuations and tariffs on bourbon coming into the EU are making those prices look even higher. Coupled with this, people are drinking less, but the reaction to this shouldn’t be to price your products highly without any real justification, as this does the category no good at all. No-one what to spend over the odds for something that doesn’t deliver: it just puts consumers off.
The category is seeing ever increasing consolidation by the big owning groups; it’s also seeing a proliferation of brands flooding the market place, making competition even tougher in a declining market for alcohol consumption which is starting to focus on lower ABV solutions. I think consumers are looking for products that offer value at any price point, and they’re willing to spend money on getting something that piques their interest and offers a sustainable and ethical brand story.
So, what else can you learn from your on-trade counterparts. For my money, a massive focus on education is key, so that you can really communicate with consumers about their choices when they’re considering a retail purchase. We also see the on-trade consistently being a bit braver with their ranges, to offer quality at a number of price points to help move consumers up the quality ladder.
Consumers are looking to the off-trade to push the boundaries. What are you going to do to provide them with quality, genuine brands that they can enjoy at home?
Anytime you want a brainstorm your spirits strategy, we’re up for a natter. Don’t forget, Mangrove UK is the home of over 30 uber drinks nerds – over 30 specialist spirits professionals, mixologists, sales and brand experts with extensive experience in both the on and off trade UK spirits market.