So once the Olympic flame is extinguished, the fireworks have disappeared into the ether and TV schedules return to normal, what next for pubs?
One area of significant growth in both the off and on-trades, bucking the trends in falling sales is Premium Bottled Ales (see the BBPA statistics for sales declines). Marston's have just published their Premium Bottled Ales Report 2012 and huge like for like, year on year growth.
So what lies beneath this rare success story in the age of double (or is it triple) dip recession? Well the first thing to note about the report is that it is aimed primarily at the off-trade and the growth in this sector is 11% in the UK (16.4% in Scotland and 80% for flavoured beers), which the authors say is due to Premium Bottled Ale (PBA) satisfying "consumer demand for authentic, crafted products" :
The greater consumer appeal for PBAs has been driven by a higher perceived level of product quality and value delivering an ‘affordable treat’, with appeal based on:
· More taste and flavour than other beers (63%*)
· Authentic crafted product, rather than manufactured commodity (37%*)
· Produced by regional and local brewers rather than multi-nationals (36%*)
*Source: Marston’s Drinker Survey Nov 2011
This has led to some 455,000 extra customers to the PBA off-trade market and a loss of 160,000 customers from the standard ale off-trade market. Surely if supermarket shoppers are switching in such great numbers it only behoves the pub trade to capitalise on these changing tastes and ensure a wide range of PBAs are available when supermarket shoppers go out for a drink, in this case familiarity does not breed contempt.
It recommends that in order to further grow the off-trade market that retailers should adopt some key strategies, which, if savvy on-trade operators were to adopt (or at least adapt) could deliver significant returns not only in terms of PBA sales but increased customer foot-fall.
The Marston's report reckons that there are £20millions of lost sales in the off-trade due to "out of stocks" - so a key recommendation pubs could adopt is to ensure that stocks reflect customer demands (although any competent on-trade operator knows this already).
The report goes on to say that there are 10 "drive brands" that deliver 45% of total space yet only use 20% of shelf space. It recommends single facings - something a pub may not be able to do if the demand is for chilled beer - but attractive, back of bar displays of single facings might work. A pricing policy of "multi-packs" on a selected range increase the "weight of purchase" (i.e. these shoppers spend more overall)... something pubs can definitely do.
The report recommends that more shoppers (in the case of pubs customers) can be encouraged by concentrating on " flavoured and lighter, golden beer styles" that are attractive to a younger and female biased clientele. According to the report flavoured beer sales grew 57% and golden beers grew by over 20% in 2011.
It goes on to talk about dual sited displays and such but seems to indicate that stocking key brands will "signpost" this for customers and the use of cross category linked promotions. In the case of pubs this could easily be food-matching opportunities. (The report lists the top 20 selling PBAs, including the average off-trade price to help you assess where your pricing might comfortably sit to make then sufficiently attractive to your pub customers,)
Something pubs have known about for a long time is how important engaging with customers by having staff well-trained in product knowledge and able to recommend products to customers (food matching and for the "experimenter" type customers) is to building sales. At the very least, if you don't run to a full printed PBA menu, make sure your team know what they are selling, the style of beer, the taste, the origin and use some chalk-board space to create some tasting notes/beer of the week etc.
Lastly Marston's is recommending to its off-trade retailers that they, in effect, ditch poorer performing categories and products to make way for an expected growth in the PBA market. The report's authors are of the opinion that legislative change (such as the mooted Minimum Pricing for alcohol) and tax policy (the continuance of the duty escalator) will see brewers reducing ABVs and concentrating on flavour. (The report cites market research that 40% of consumers would choose a weaker beer in the afternoons and weekday evenings.) So dig out those stock reports and make some intelligent choices about what isn't selling, have a "sale" to get rid of it and replace it with what consumers seem to want i.e. PBAs.
The supermarkets are often blamed for the decline of the pub trade, so why not cash in on all the hard work and expense the off-trade and brewers are committing to growing this sector by making sure you have a wide range of PBAs available?