Christmas is always a key time for driving sales, and it’s an opportunity for your staff to persuade customers to trade up. Jason Caddy checks out what premium means to the trade.
Premiumisation is the latest buzzword to hit the drinks industry. The swing of the pendulum towards premium products has given rise to the term ‘weekend millionaires’ – i.e. those who go out less often but tend to splurge on quality products when they do.
A report from International Wine and Spirit Research (IWSR) corroborates this, as it predicts that the premium-and-above spirits category is set to outpace lower-priced sectors over the next five years, as wealthy, older consumers seek out high-value products. In fact in 2011 sales of premium spirits grew by a massive 21%.
But what is a premium product? A higher price should be a defining factor, although you could then argue that the same quality product at a lesser price is better value, and therefore premium. But most experts would say that a premium product has to deliver on two counts: if a brand is truly premium its price point should reflect its value within a tolerable range of consumer acceptance, but at the high end of the comparison spectrum, and it should meet customer expectations.
On the drinks front that would mean that the consumer expects a great taste and possibly packaging innovation, and the perfect serve, which relies on bartender training to justify the increased price.
Research by Mintel reveals 64% of UK alcohol drinkers opt for quality over quantity and 78% think they can taste the difference when drinking premium brands, so there’s a pretty compelling argument for at least some premium push in your outlet, regardless of type.
To this end I spoke to licensees and bar managers to find out if the premium reach has extended to both customers in traditional bars as well as those in high-end style bars.
Sean Sweeney is Manager at Biddy Mulligans, Edinburgh, an outlet you wouldn’t immediately associate with customers on the premium trail, but that’s not the case according to the man in the know. He said, “We are a traditional bar, but we are mainstream at the same time, so our customer base is more susceptible to trading up than, say, the dyed-in-the-wool traditional boozer. Tourists also help as they are more prone to go for a premium product, and we do attract our fair share of visitors to the city. Premium draught beers are popular, particularly Staropramen, and premium gins, like Bombay Sapphire and Hendrick’s, and we incentivise our staff to upsell as much as possible, with a prize on offer to the person who
sells the most on a Saturday night.”
To be fair, Edinburgh is a city that you’d expect to cater for this market, and at the city’s Earl of Marchmont it’s Hobson’s Choice, as premium products are the extent of what’s on offer. This has come about from customer demand rather than a decision to foist high-end brands on the clientele. And as manager
Dave Anderson explains, this has been a gradual process. He said, “We took over these premises about five years ago and then customers had the choice of a wide range of high-end and standard products. In the last five years we’ve moved over to premium products exclusively. Absolut is our house vodka, and we pour with Chivas 12 Year Old whisky and
Havana Especial rum. Our customers triggered this, as they voted with their feet because the appetite now is for premium products, and they now sell themselves. We have even won over some custom from out nearest competitor because of it. The key of course is responding to customers and if they suggest a product we will stock it and if it doesn’t have a fast enough turnover then we won’t keep it on the gantry.”
But not all licensees can be persuaded by the argument and over in Glasgow Mark Ferrier, co-owner of McPhabbs and the Admiral, thinks that there’s a case for almost protecting the rights of the customer that doesn’t fit in with premium profiling. He said, “The Admiral is a traditional pub with high volume, and a strong Friday teatime trade. When I go to style bars the staff make more time to talk to the customers about the brands they stock, whereas here the customer isn’t likely to respond well to that, they just want a quiet drink – they don’t come to my pubs for 20 questions.”