The alcohol category is changing. At the recent launch of Diageo’s 2019 Drinks Report, RN spoke with senior customer category manager Madeleine Bedford about evolving consumer tastes, and why it’s important to think about drinks categories in terms of occasion
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RN What are some of the key trends and developments that independent retailers should be keeping an eye on regarding beer and spirits?
MB The no- and low-alcohol opportunity is huge. There are now 6.1 million consumers in Great Britain who don’t drink alcohol, and it’s important we don’t lose those shoppers. Ensuring there are options for them is crucial.
We’re no longer talking about categories in isolation, it’s about targeting occasions such as having a gin and tonic at 5pm. Forty per cent of people have pre-dinner cocktails, so we are thinking about how we can inspire these people through PoS in stores to create the bar experience at home.
We’ve heard a lot from the cider and wine sectors about the need to produce premium products in response to consumers increasingly valuing quantity over quality. Are you seeing this trend, too?
MB Absolutely, but I also think it’s important that we’re catering for everybody. We’re certainly not suggesting turning away from products at lower prices. It’s about choice. People want to feel there’s a tailored range for them. Super-premium gin, for instance, is a hot area. But that’s not to ignore the people who are choosing to drink the likes of Gordon’s.
RN What should retailers be doing to get the most out of spirits and beer?
MB Make sure there is that good, better, best range and engage with innovation, because new products are driving about 10% of the growth in spirits, beer and wine. It’s crucial to make sure you have different sizes, especially in convenience. The average shopper in a convenience store spends about £7.80, so a 70cl bottle isn’t always going to be the best solution for them. You need to make sure fractional options are available to tap into smaller basket spends.
Price-marked packs help give consumers belief they’re not being overcharged. There’s definitely some work to be done around value perception in our area in convenience.
While you want an extended range, too many products can be overwhelming. It’s about how, at point of purchase, we can interact with customers with signage. For example, whisky is a notoriously difficult category to enter, especially as a first-timer. So, having the flavour promoted with shelf strips helps customers understand what they’re buying, especially if it isn’t for them.
For instance, we know the second most common time for whisky purchases as a gift is birthdays. If the customer knows the recipient is into smoky flavours such as barbecue, then a smoky whisky is probably going tobe much more to their taste than a sweet whisky.
RN In the wake of recent tobacco legislation, a lot of retailers have started to use the space behind their tills to display spirits. Has this had an impact on sales?
MB What’s exciting about this space is how retailers are reacting to it. I think you’re going to see a lot of retailers use that to showcase the more premium end. If it’s behind the counter, it’s a safe space, and they can start to showcase more premium and super-premium products – anything over £25.
The other thing I think we’re going to start seeing is people tapping into the chilled opportunity. Chilled is the trump card for convenience, it’s their advantage over a supermarket. For example, if a customer wants chilled beer, a massive supermarket won’t offer it, but a local convenience store will, and they’ll be happy to pay a little bit of a premium.
Having a chilled offering is important and could be a perfect way to maximise that space. It’s an area that retailers need to understand is their advantage. There’s a lot of concern about competition as the marketplace becomes more consolidated, but chilled is one of their key strengths.
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