With sales of spirits and cocktails on the rise, pub and bar operators can take further advantage by creating simple but effective offers in their venues.
Spirits and cocktail sales generated over £1.7bn of revenue in pubs and bars in the first quarter of the year, becoming the fastest growing category since restrictions were lifted in 20221. The boost has continued throughout 2022, proving to be a lucrative revenue stream for operators.
Findings from Star Pubs & Bars’ Just Add Talent venues showed the growth of spirits and cocktail sales was also seen around sporting events. It is expected such events would appeal mostly to lager drinkers, however, HEINEKEN UK Category Buyer Ben Ko-Nkengmo explained: “Spirits are becoming more important to an increasing array of pub occasions. For example, during worldwide football events, lager should be a Licensee’s focus. But when we looked at sales data from our Just Add Talent sites, we saw after the men’s EUROS, spirits’ share of wet sales grew substantially.”
This spike was driven by significant increases in cocktail and vodka shares, he continued, but cautioned spirits’ share of sales would vary depending on a pub’s customer base.
“But it shows licensees need to look at their drinks data before focusing on just one category,” said Ko-Nkengmo. “Sales information is vital as it enables operators to shape their offer and keep it relevant to their customer base.”
To help operators further tap into the strong revenue opportunities offered by spirits and cocktails, Star Pubs & Bars hosted a Stars of the Future Spirits Masterclass in London earlier this year in conjunction with Pernod Ricard UK.
Jo Heywood from The Gaping Goose in Leeds, was one of 10 delegates at the event and said, “I learnt a lot, the main thing being that if a drink is presented correctly then you effectively can ask for more money for it. If you make it look good, the people will pay.”
Following the masterclass, Heywood has put a new cocktail menu in place and has already seen an uptake in sales despite “being more of a traditional pub”. She added, “The masterclass made me realise that you shouldn’t be scared to try something new – it doesn’t cost a fortune and as long as you and your staff are backing it then customers will back it too. We have noticed that our customers are becoming more intrigued and involved; they are getting excited and want to know when the next new cocktail is coming.”
An increase in spirits and cocktail sales at The Gaping Goose follows additional insight given at the Stars of the Future Masterclass around consumer trends.
According to Ko-Nkengmo, consumers are now more than ever looking at how they can treat themselves without spending too much. They want something that they can’t do at home, like a professionally made cocktail, but don’t want to go to a fancy cocktail bar when they can get it from their local.”
This is known as the ‘lipstick effect’, which is when consumers spend slightly more on small indulgences during the likes of an economic crisis, he added. “For example, from the recession of 2008 we know people visited the pub more, they do it to be part of an atmosphere and to tap into a positive experience when they can’t spend on more expensive things.”
Merchandising Tips:
- A well laid out bar helps inform customer decisions and speeds up service.
- Tier spirits on shelves from cheapest to premium and price each tier the same.
- Place informative tags on standout spirits with price, ABV and flavour profile for staff and customers.
- Unless a specialist bar, don’t overstock. Keep the likes of gin ranges streamlined and suitable for the size of the venue.
- Create ‘hotspots’ that appeal to non-drinkers or those with special dietary requirements to further boost sales.
- Utilise chalkboards to highlight new and special serves to bolster sales.
