View from A Farr – Pubs must get with the programme
The pub environment in the UK is changing as a result of measures such as the smoking ban and changing consumer preferences. And with concern over excessive alcohol consumption continuing to rise, Annette Farr bemoans that the licensed trade still seems reluctant to embrace the opportunities offered by a new generation of adult soft drinks.
Pubs are having to evolve to survive. In the wake of the smoking ban the pub environment has become more welcoming and family-friendly, a golden opportunity for non-alcoholic drinks to shine. Indeed, Britvic reports that in 2007 soft drinks sales in the UK on-trade grew by 1.3%, compared with a 3% decline for beer
But in a period of unprecedented new product development in soft drinks, contrast the diversity and choice available in the off-trade with that in the on-trade. Retailers' soft drink shelves and chiller cabinets groan under the weight of natural, healthy liquid refreshment - 100% pure juices, some with high antioxidant superfruits; waters, flavoured and enhanced; smoothies; functional drinks that will detox, revive, and energise; premium adult soft drinks with botanicals and natural children's drinks.
Yet in pubs, while juice drinks and water sales rose by 2% last year, cola, which is by far the largest and most mature category in the off-trade, rose by 4%, while lemonade rose by 1%. Crucially, these two largest categories in the on-premise market are very commonly sold via post-mix dispense systems which offer retailers lucrative margins.
The 2% rise in juice drinks and bottled water may suggest things are changing, albeit gradually, but on-premise retailers still seem unconvinced by the opportunities product innovation in the soft drinks market offers, in spite of the evidence of consumer demand for new products in the off-trade.
The range on offer remains very limited in comparison with the off-trade and even where the selection is broader, soft drinks are merchandised unimaginatively, and retailers still give highest prominence on the bar counter to post-mix dispense. Consumers have to look much harder for alternatives.
There are no soft drink menus to be seen, not enough chiller cabinets on display whist the ambient choice is kept well hidden behind the bar. As Tim Roberts, out of home team leader at innocent, whose smoothies have yet to make an impact in the on-trade, says: "We definitely believe there's an opportunity but pubs need to have a dedicated space to show what's on offer, clever POS material and attractive chilled fridges. We definitely want to work with them, but publicans have got to create the space for a short-shelf-life product."
His concerns are echoed by Paul Grace, licensed market manager at Coca-Cola Enterprises (CCE), who wishes "the licensed trade would pay soft drinks the same level of attention both in terms of what they stock and looking after the equipment as they do with categories such as ale".
Both CCE and Britvic, the two largest soft drinks companies supplying the on-trade in the UK, provide considerable support. The latest innovation from Britvic is a patented dispense system which enables draught cola to be served extra cold. Earlier in the year the company launched its premium cola Pepsi Raw and recently introduced Lime Grove, a range of natural drinks aimed at 25 - 45 year-old female consumers.
CCE is running a special 'ambassadorial' campaign which rewards bar staff with free downloads for providing the 'perfect serve' and has launched Fruitiser into the on-trade, a lightly carbonated drink made from 100% juice, free from preservatives, colourants and added sugar. There are three variants: Pomegranate & Raspberry, Mango & Mandarin and Apple & Dragonfruit.
Elsewhere, Red Bull has launched Simply Cola, a natural cola; bottlegreen has introduced some exciting and interesting cordials; The Feel Good Drinks Company is working with on-trade chains which link their drinks to healthy offers on menus; and Pago's quest is to get people going into a pub to feel comfortable asking for a peach or apricot juice, instead of orange.
The licensed trade is at crossroads. Should pubs stay traditional and leave the clean, light airy, healthy feel to the coffee shops? After all, a common view is: if I'm in a pub I want a pint, and if I'm in a cafe I want a coffee or a smoothie.
Yet, according to The Campaign for Real Ale, 56 pubs are closing every month and alcohol, generally, is having a bad press. Binge drinking has hit the headlines with the Government introducing a number of new initiatives to curb both underage and adult excess.
We can expect more measures to combat excessive drinking, possibly including health warnings. The Department of Health has commissioned Campden & Chorleywood Food Research Association (CCFRA) to carry out a major survey of health-related information on alcoholic drinks labels.
Concerns over excessive consumption have implications for the alcoholic drinks sector but the current climate, and interest in health and wellness generally, must create some significant opportunities for upgrading the soft drinks offer in pubs. Surely the licensed trade cannot afford to ignore the wealth of innovation on offer in the soft drinks category. Post-mix dispense may be profitable but the new generation of adult soft drinks, many commanding premium prices, also offer profit opportunities, and what is more they are what consumers want.
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