22 Feb, 2024
20-21 March 2024
10 April 2024
4 March 2024
Whatever product you’re pitching, and to whom, as any good marketer will tell you it pays to understand the dynamics of the market you’re operating in so you stand the best chance of meeting the needs and wants of your buyers and closing that deal and making that sale – and so it is when it comes to pitching your distillery products in a UK restaurant or bar business environment.
Perhaps we need start with ensuring perceptions actually reflect reality because, when it comes to selling alcohol, it’s probably time to shed any misconception that all Brits are inveterate boozers: change is happening across the nation and across the board with some 20% of the population now drinking no alcohol at all (Mintel), a figure that rises to 33% for 16 to 24 year-olds.
When it comes to spirits in particular, but as with all other alcohol categories, people are generally drinking less, so that not only has there been around a 20% fall in overall consumption across all categories over a number of years, but today actually less than half the population (48%) is drinking any spirits at all (WSTA) – and this in spite of the fact that there are now more distilleries than ever before (361 in 2018, according to HMRC).
Yet some categories are bucking that trend – indeed it’s really mostly about gin, which is also largely responsible for an actual increase in the volume of spirits sold, this having risen by just under 4% in the last year, as well as the considerable increase in the number of UK distilleries – indeed, gin sales now account for close on 15% of every UK pound spent on spirits.
What’s also happening within each category sector is a clear movement to drinking better, even if less in quantity terms, so sales values are rising, even if volumes may be falling.
The key to business in each and every alcohol category, including spirits, is being driven by increased consumer interest in craft products generally, the ingredients used, their provenance, the production methods and the skills of the distillers to produce products that are both innovative and distinctive, satisfying a consumer thirst for premium products that say something about the consumer as much as the producer.
This strong trend is confirmed by Bibendum’s new on-trade report, which states that the main forces in the on-trade currently can be summed up by the words “indigenous” and “diversity”, with provenance in particular becoming as important as it is to wine drinkers – over half of consumers wanting to know where a drink comes from – which goes some way to explaining why over a third of consumers say they would like to try drinks from places that are renowned for what they produce. Another clear trend from the same report is interest in – indeed, a clear preference for – more floral flavours.
Whilst the sales of gin have been exceptional, it doesn’t have the market to itself: although tequila is starting from a much lower base, here too it’s about premiumisation, especially 100% blue agave tequila (all tequila comes from Mexico, but there are differences in ‘terroir’ depending on which region the agave is grown). In fact with an almost a 50% year-on-year growth by some brands, this even beats that seen for gin. Rum, too, has seen a 25% volume and 33% value growth over the last 5 years (against gin’s 300% increase, from £500 to £2 billion). Again, it’s very much about premiumisation and an emphasis on the country of origin, with older, darker, smoother expressions in demand but, importantly, also flavoured rums.
Whisk(e)y sales are also being influenced by the consumer search for premium products that are unique, innovative and exciting, with distillers using different distilling methods and a range of different finishes to produce more flavour profiles.
It’s not quite the same with vodka, with volume relatively flat, although it retains its position as one of the nation’s favourite spirits, and, whilst the story remains one of quality, interest is certainly being piqued by the latest distiller innovations in the use of botanicals and natural fruit essence infusions to produce new tastes.
We’ve touched on the main spirits categories, but, particularly in a restaurant environment, we can’t omit mention of cognac, which is of course about high-end expressions, but there’s also another driver – the cocktail scene.
The bar and restaurant market continues to play a large part in driving all spirits sales, with premium cocktails being served up to satisfy the consumer interest in new, exciting and different tastes. According to Pernod Ricard UK, there are now over 9 million cocktail drinkers in the UK, the sector worth £500 million in on-trade terms, up a third in only 2 years.
I’ve spent little time referring directly to restaurants and bars because the consumer dynamic is what’s important overall: by the very nature of what are consumer-facing, consumer service-oriented businesses, these have to reflect the needs and wants of their customers if they’re going to stay in business. As such there are any number of pointers in the market data and consumer research findings as to what restaurants and bars will also be looking for in terms of any approach from a distillery.
There’s one other important dynamic that distilleries will need to take account of in any pitch, and that’s No-Lo. The growth of low and no alcohol products is being strongly driven by consumers not only wanting to drink less alcohol overall, but to choose lower-in-alcohol products as an aid in achieving this aim: as such, it’s really not surprising that alcohol-free spirits, like Ceder’s and Seedlip, are seeing such significant growth figures, and neither restaurants or bars, or their distillery suppliers, can ignore this growing category. In fact, it could be said that this is the other side of the consumer coin: just as consumers are choosing premium spirits and cocktails so that they know they’re drinking something special, exactly the same applies to the no and low alcohol sector – as Mintel’s latest report sets out, expenditure on experiences rather than possessions continues to gather pace with 65% of adults, rising to 72% of Millennials expressing the former choice.
I suggested at the beginning that a successful pitch to any business needs to be about showing the distillery understands the market and has the products to meet consumer needs and wants: the spirits market in all its forms is hugely competitive, and not just in product, but pricing terms too, and the restaurant or bar has many sources of supply… if you want to be taken seriously, then your offer simply has to reflect those needs and wants and match the overall market dynamic.
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