As pubs, bars and restaurants reopen for inside service, CGA’s ‘Rebuilding Brands in the On Premise’ webinar revealed what drinks suppliers can do to capitalise—and how the BrandBuilder service can help.
With more than two thirds (71%) of consumers first trialling new drinks there, the On Premise remains the leading place to establish brands and build equity for supermarket sales, CGA’s director of consumer research and marketing Rachel Weller said at the webinar. With that in mind, here are some of the key consumer dynamics to watch as the market settles into a new normal.
1 A strong return
CGA’s research shows that footfall and drinks sales are returning faster than they did in the first major unlocking of hospitality in July 2020. Nearly half (44%) of consumers in England visited the On Premise in the first week of outside-only service from 12 April, and 81% plan to be back by June, when all restrictions are due to be lifted. While poor weather has dampened sales lately, consumers have clearly been eager to get back. “It’s been a really encouraging start,” said Rachel Weller.
2 Local habits
In the short term at least, consumers are likely to stay local when they drink out. More than a quarter (28%) plan to visit venues close to home more often than they did before COVID-19—more than twice the number (12%) who plan to do so less often. While city centre footfall will bounce back in due course, brand distribution and activation strategies will need to have a very local focus for now.
3 Changing occasions
COVID-19 has also triggered big changes in drinkers’ venue habits. The widespread closure of the late night bar and nightclub sector over the last 15 months has benefited pubs and restaurants, and while the mix may return to previous patterns as venues unlock, some changes may be permanent. This will have implications for brand-seeding strategies. “Consumers have become accustomed to different occasions in different venue types, so it will be interesting to see if higher tempo occasions that have previously been synonymous with bars continue to play a bigger role in pubs and restaurants in the future,” Weller said.
4 A celebratory mood
After so long in lockdown, four in five (78%) consumers say they are likely to drink out more often or as often as they did in 2019. As they celebrate reopening, many of them will be very open to new brands and experiences. “There’s a great consumer mindset for brands to be tapping into,” Weller suggested.
5 Treats and trade-ups
Returning consumers will be ready to treat themselves, with half (52%) planning to choose high quality items, either as a one-off or a matter of course. This will help to extend the long-term trend of premiumisation in the On Premise, and opens up some big opportunities for premium drinks brands. But with some people hit hard financially in the pandemic, it will be important not to neglect the value end of the market too. “We’re seeing a polarisation among consumers… knowing where your brands fit into occasions and the need states they meet and what drives consumers to choose them over others will be key to staying ahead of the curve,” Weller said.
6 Successful categories aligned to consumer need states
CGA’s reopening research has shown that the most successful drinks categories are those that complement the new occasions and needs of returning consumers. For example, sales of cocktails and draft beer have started strongly after consumers returned to them after months away. “Consumers were drawn to categories that they had found difficult to replicate at home,” said Philip Montgomery, CGA’s director of client services, UK and Ireland. Categories like world lager meanwhile have appealed most when consumers are out eating, followed by relaxed and quiet drinks.
7 Brand performance is about more than just quality
Case studies from CGA’s BrandBuilder service show that perceptions of high quality in a drink aren’t enough to win market share. Equity scores, trust, frequency of purchase, recommendations, innovation and the ethics of a brand all influence performance, as does good service and reliability of delivery. “A consistently great beer serve is an operational priority—you are only as good as your last pint,” Montgomery said.
8 Loyalty is a big challenge in spirits
Consumers’ interest in new brands is particularly apparent in spirits, which can make it difficult to drive loyalty. Nearly two thirds (63%) of spirit drinkers say they like to experiment—a figure that has risen by seven percentage points in just a year—and the biggest reason that brands lose their spend is that they are moving on to new choices. BrandBuilder shows how generating good word of mouth and optimising brands for social media—including through theatre and ‘Instagrammability’ of serve—can help to keep fickle consumers loyal to a brand.
9 Bar tender advocacy missed during COVID-19
Staff recommendations and education about drinks have always been an important influence on drinkers’ choices, upselling and brand reputations. The need for table service has temporarily made it harder to deliver that, and operators and suppliers need to work together to replicate this sales mechanic. Digital menus are an important platform for this, especially for the 18 to 34 year-old age group, which makes up nearly half (45%) of those who now prefer to order drinks through their phone when they are out.
10 Opportunities in planning
Concerns about safety and the availability of tables has led many consumers to put more thought into their drinking out. Nearly half (46%) say they are more likely to plan in more detail than they did before the pandemic. While spontaneity will return, for now drinks suppliers have an opportunity to tie their brands to pre-booking processes and sell in advance—not just driving volume but shaping activations and building equity too.
CGA’s BrandBuilder service evaluates drinks brands’ health in the On Premise, and can help businesses attract new consumers, increase frequency of purchase, build brand loyalty and grow market share. It combines CGA’s market-leading consumer research with sales and distribution data to provide detailed analysis of brands’ strengths, weaknesses and opportunities. To learn more, contact Rachel Weller at rachel.weller@cgastrategy.com.
