Embracing the New Rules for Brands in the On-Trade
The on-trade, traditionally seen as the place where brands are built, is undergoing a significant transformation. While pubs, bars, and restaurants have been hit hardest by economic challenges, the current landscape presents both obstacles and opportunities for brands willing to adapt.
But the rules have changed.
Macro trends such as the COVID-19 pandemic, cost-of-living crisis, duty increases, and sustainability concerns have profoundly impacted consumer behaviour and the on-trade industry. Venues have been forced to react, often in a reactive rather than proactive manner, leaving brands scrambling to keep up.
However, these new rules offer a platform for brands to continue building their presence in the on-trade, provided they are bold, brave, and agile enough to embrace the changes.
Shift 1: Consumers are Drinking Less, but the Party Isn't Over
While a portion of consumers, particularly within Gen Z and Millennials, are giving up alcohol entirely, the more common trend is moderation and mindful consumption. These consumers are seeking quality, taste, and experience, driving a demand for low and no-alcohol options, as well as more flavourful and premium choices.
Brands that can cater to these evolving preferences and capitalise on popular rituals like bottomless brunches and competitive socialising will maximise their cultural relevance. Occasions like live sports, which drive high spending in the on-trade, present opportunities for brands to upsell premium offerings to receptive consumers.
Shift 2: POS Clutter is Reducing, but Brands Can Still Stand Out
Cost, eco-led initiatives, and digital savviness is changing the way that consumers and customers are engaging with brands.. Traditional paper POS kits are on the decline, replaced by digital mechanics like social media, QR codes, and digital screens in venues.
While physical space for brands is limited, a hybrid approach that combines digital and physical touchpoints like menus and glassware can help brands engage consumers and drive sales. With diminishing paper POS, brands must find ownable activations that cut through the noise and deliver real value to consumers and venues.
Who’s embracing the new rules?
Successful brands are already embracing these shifts and finding innovative ways to connect with consumers.
Traditionally seen as a beer for winter months and occasions like Six Nations Rugby and St. Patrick's Day, Guinness has managed to expand its appeal into the summer months as well. And whilst live sports partnerships may not suit every brand, Guinness demonstrates how capitalising on changing consumer behaviours and seasonality through strategic marketing can drive brand growth.
Tequila Rose has capitalised on the upward trend in breakfast and brunch occasions by delivering elevated, aesthetically pleasing and memorable brunch experiences ownable to their brand. These increasingly popular occasions have a few things in common - they are centred around experiences that offer something different from the norm, and they command a price premium. By tapping into the experiential brunch trend in a buzzworthy way across physical and digital channels, Tequila Rose increased brand awareness and sales growth.
Lucky Saint's "Let's Go to the Pub" campaign incentivised consumers to visit their local during the traditionally slow January period, offering a free pint of their alcohol-free beer and driving trial among moderating drinkers. By tapping into the desire to support local pubs while maintaining Dry January commitments, Lucky Saint achieved a triple win.
BrewDog, in their characteristically bold fashion, offered a free pint of their stout to anyone who brought in a Guinness glass, driving trial of their new product and footfall to their venues. While provocative, the campaign aligned with BrewDog's disruptive brand identity and provided value to consumers and venues.
The Triple Win
Amidst the shifts, the on-trade remains a vital space for communities to forge genuine connections. As consumers seek to save money and visit local establishments more frequently, brands have an opportunity to facilitate these connections and drive footfall to venues.
Brands that can position themselves as enablers of local experiences and community-building will resonate with consumers seeking more than just a transaction. By aligning with popular rituals and providing value beyond product sales, brands can become integral to the social fabric of local communities.
At the heart of these shifts is a desire for a triple win: brands want to connect with consumers, consumers want outstanding experiences, and venues want to drive footfall and sales. Brands that can facilitate this exchange by providing value, quality, and memorable experiences will succeed in the evolving on-trade landscape.
While the rules may have changed, the on-trade remains a vital platform for brands to build their presence and forge connections with consumers. By embracing these shifts and rethinking their strategies, brands can unlock new opportunities and thrive in the ever-changing on-trade environment. Those that fail to adapt risk being left behind as consumer habits and expectations continue to evolve.
