Despite knock in confidence, consumers are still spending out in the on-trade.
Recent statistics from the ONS showed alcohol and cigarettes were the major drivers behind a jump in retail sales causing commentators to suggest consumers were staying in to save money. However, the latest on-trade and spend data suggests this isn’t true.
Despite consumer confidence falling to its lowest level in decades during May 2022 (-40), on-trade sales have been strengthening in April and May. CGA data shows average sales in managed pubs, bars and restaurants were up 1% in the seven days to Saturday 14th May compared to the same week for the drinks industry 3 years ago. Likely due to warmer weather, this represents the fourth week in a row sales have been in growth (the previous tracker showed an increase of 3% in the seven days to Saturday 7th May).
There is no escaping the impact of inflationary pressures as high inflation and rising costs means sales are still well below three years ago in real terms. What it does show is the dramatic difference sunny weather makes to drinks sales.
PROOF Insight have recently mentioned how important winning the garden is for both venues and brands. Contact us here for more drinks market research or bespoke activation ideas to help you this summer.
Source: PROOF Insight, CGA Drinks Recovery Tracker, The Morning Advertiser, The BBC
Hard Seltzer brands invest in growing presence at festivals.
White Claw Hard Seltzer has invested over £4m in a strategy to boost sales and cement their footing in the UK drinks market. This involves a presence at over 40 festivals across the summer including London’s All Points East, Parklife in Manchester, Love Saves the Day in Bristol and Boardmasters in Cornwall. As part of their activation strategy, they will have a 2-floor bar that will serve White Claw to festival goers.
The activation should not only grow brand awareness, but also encourage trial of the Hard Seltzer category, which at £13m, remains a small fragment of the market. RTD’s are the fastest growing drinks category in the on-trade right now with +£26m (+12.7%) growth vs pre-pandemic, taking the category to around £232m (from £206m pre-pandemic).
White Claw is not the only drinks brand or alcohol company investing to claim a share of this emerging category in the alcohol market. Diageo’s purchase of Far West Spirits LLC for an undisclosed sum to expand their portfolio in the hard seltzer drinks market. London based brand Bodega Bay launched a £400k crowdfunding campaign, adding to the £1.8m already raised taking their value to £7m. Meanwhile overseas, Anheuser-Busch announced more than $1bn investment in hard seltzer plants in the US and Molson Coors have pledged $100m by early 2022 to boost production of spirit and malt-based hard seltzers.
Source: The Drinks Business, CGA, Forbes, Yahoo Finance, PROOF Insight
Drinkers warned of a thirsty summer amidst strikes and bottle shortages.
Surging energy costs and supply chain disruption affecting the price and production of glass means German brewers face an acute shortage of bottles this summer, which drinks importer and wholesaler Dunns have stated will result in less variety of German beer available on UK shelves and a price increase as production costs are passed on. With glassware prices surging by 80% in some markets over the last year, the effects will also be felt by beer, wine and spirits manufacturers and alcohol companies outside of Germany.
While some breweries have started converting some, or all, of their bottled product to cans in reaction to increased production costs, such as Edinburgh’s Vault City Brewing, many traditional breweries in Germany have yet to make the change or view cans as devaluing the brand – urging consumers to return their empty beer bottles as soon as possible.
The glassware fears loom amidst a potential summer shortage of brewery staff, with strike action threatening production at Budweiser Brewing Group’s Samlesbury brewery in June over pay. BBG produces brands such as Budweiser, Stella, Becks and Boddingtons at the site, with the GMB union warning beer drinkers “could go thirsty this summer” if the strike is not called off.
Source: Herald Scotland, The Guardian, The Drinks Business
Drinks Industry Investments, Mergers & Acquisitions
- Investment firm Song Capital has acquired a 95-strong pub portfolio from Welsh brewer and retailer, SA Brain
- Nc’nean, a highland whisky distillery has secured £250k in funding to support expansion plans and reduce carbon footprint
- Soho House submits planning application for a Glasgow site, in a step towards expansion plans
- J&S Pub Company opens seventh site in North Yorkshire
- Tortilla acquires rival Chilango for £2.75m but will continue to operate the Chilango brand at some locations
Sources: Big Hospitality, Propel, Harper’s, Drinks Business
Drinks Trends, New Drink Products & Campaigns
- Stella Artois launches an unfiltered beer with a humorous ‘beer, au naturel’ ad campaign – the absence of filtration gives the beer a golden haze
- Fever-Tree’s ‘Tonic & Gin’ campaign aims to put tonic at the forefront of the classic combination
- Madre Mezcal launches RTD ‘Desert Water’ in four flavours including grapefruit & wild yerba santa, and mushroom, sage & honey
- Aldi’s premium cider range, alska, has launched two new flavours- cherry & raspberry and watermelon & berries
- Bolle, an ‘effortlessly effervescent’ low & no alcohol wine has been developed in a way to ferment juices without producing alcohol or excess sweetness
- Buen Vato, a Stokholm-based tequila from Alias Smith, had launched in a cardboard bottle
- Beavertown has announced the launch of a monthly beer subscription with discounts, prize draws and is available to gift friends and family