Pub18 and the expanding alcohol-free drink market
Club Soda was at the Pub18 exhibition last week. We’ve attended this event before, but this time we were also invited to host a panel discussion on alcohol-free drinks for pub landlords and managers.
Pub issues of today
We were pretty excited to follow on after several sessions that touched on the new and emerging trends in the sector. The “Publican panel”, where three pub managers discussed the big issues of the trade, chaired by Robyn Black, editor of Inapub raised the big issues of finances. With rents, utility bills and wages all going up, and the sugar tax on the horizon too. But the three publicans also all agreed that non-alcoholic drinks are definitely a growth area, one saying now is the “right time for alcohol-free drinks”, with consumers getting both more demanding and knowledgeable.
Mark Fowlestone from Multiply shared his research in “Last Orders at the Bar: Turning Millennials back onto the On-trade”. Mark’s research confirmed many of the same trends and findings we have discovered in our work with pubs and bars too. Among other nuggets, Mark talked about the trend towards healthier and lower-alcohol drinks, importance of providing experiences (including entertainment and food) rather than just booze, the central place of digital (think “Instagrammable” and connecting over several social media channels at once). His white paper is worth downloading – whether you are a customer, drink producer or venue. We think these trends nod towards an exciting evolution of our social spaces.
“Increase your revenue: The expanding alcohol-free drink market”
We wanted to mix things up a bit in our session. We know we don’t have all the answers, but feel privileged through our Guide, the Festivals and on-trade workshop in November to have started to see things from a number of perspectives. And we see a number of blockages that need to be navigated to meet consumer demands. So we brought pubs and drinks together, to share with the audience what the issues are.
Club Soda view
Laura, who was chairing the panel, introduced the panel members and the topic. She discussed what we have learned in the last three years, talking to customers who have decided to cut down or quit alcohol, but also from building our “pub guide for mindful drinkers”, the Club Soda Guide.
We see the trends to drinking less are cross-generational – it is just the motivations and demands that are slightly different. But either way, venues need to equip themselves with the right knowledge to upsell – you need to know about calories and ingredients, be ready to answer questions about ABV and sugar. Then you can begin to switch from a cola or lemonade to a 0.5% beer as a healthier choice.
Choice is also key. You would not have just one veggie dish on your food menu, so why would you only have one adult alcohol-free drink? Customers want drinks that are sippable (drinking slowly rather than quenching thirst), where they can match their drinking buddies in rounds. A fruit juice just does not meet that need. Or they want a drink that is sessionable – lower ABV so they can last the whole night. Pairing with food is also important – a zero proof cocktail may serve as an aperitif, but you want something that complements the meal once you sit down to dine.
A big problems to providing all of this is the sluggishness of the wholesale chain. There is little wiggle-room on the volume of stock they want to shift. Whilst we meet many venues who want to stock some of the new products, they are thwarted by the newness of this market and lack of listings with wholesalers. The education piece for venues is also different, and again for small producers training staff is difficult to scale.
Venue view: The City Pub Company
Gemma Catlin from the City Pub Company, a chain of over 30 pubs, said the company had done a lot of work on their low and no alcohol offering, and “not just bog standard soft drinks”. Their range has grown threefold in a year, is still growing, and they’ve also experimented with creating their own drinks. She also noted that their alcohol-free beers now outsell many full-strength craft beers.
Gemma also acknowledged that the limited range available from the major wholesalers is a problem. But she noted that only five years ago they would only offer a very limited range of gins, whereas today it is easy to put together a gin list of 50 brands from a single wholesaler. So change is possible, and can happen quickly when the supply and demand grow.
Drinks producer view: Double Dutch
Double Dutch produces tonics and other mixers in many flavours, also very enjoyable on their own. Company founders, twin sisters Raissa and Joyce De Haas talked about the changing customer tastes on soft drinks: lower sugar content, new flavours and combinations of flavours. They also noted the growing popularity of lower ABV cocktails.
Slow-moving wholesalers are an issue for new and smaller drinks producers too. Joyce and Raissa called it a “chicken and egg” situation: to get a new drink into a wholesalers list you need sufficient demand from venues – but to have that demand you need to have your drink available from the wholesalers. Double Dutch got around this issue by gathering together a number of venues who were keen to stock their drinks, and convincing a wholesalers to take them on.
New ideas from the audience
To finish the event, Laura invited the audience to brainstorm ideas, by asking them to imagine that a pub could not sell any alcohol for a weekend, but was still required to earn the same amount of revenue. How could they increase their sales or non-alcoholic drinks?
After a frantic five minutes of small group discussion, the ideas that were shared included prosecco shandy (perhaps more a low-alcohol than a non-alcoholic drink?), offering a bigger variety of tea and tea drinks, noting that “tonics aren’t just for gin”, and organising a non-alcoholic beer festival.
The final question from the audience was about the pricing of non-alcoholic drinks. The quick answer is that many of them are made by small producers, in small quantities, and therefore their unit costs will be higher than those of more mass-produced drinks. We know this is a complex issue, and we will return to it in more detail later.