New data from CGA’s latest Business Leaders’ Survey reveals that nearly a quarter (23%) of hospitality leaders have changed the routes-to-market for their drinks selections while more operators are reducing their delivery partners (15%) than increasing them (4%), putting drinks brands at risk of de-listing.
The survey highlights the growing financial pressures on hospitality leaders, who are grappling with wage increases, as well as higher food, rent, and energy costs prompting operators to reassess their entire cost structures, including drinks. As a result, many are conducting range reviews to seek better value from distributors and brand partners. Earlier this year, two in five (41%) leaders of hospitality groups indicated that they were reducing and rationalising their supply base, with another 26% considering similar steps.
The long alcoholic drinks (LAD) category is experiencing the highest turnover, with 11% of leaders already changing their primary supplier. There are also signs of reduction in draught standard lager (16%) and in both packaged (10%) and draught (8%) cider ranges. Gin ranges are being cut by 22% of operators, partly due to increased competition from a wave of celebrity-backed new entrants.
The survey indicates that 72% of operators believe drinks suppliers could help them with more competitive pricing, while 32% point to the importance of staff training and support—a factor the CGA’s Global Bartender Report has highlighted as especially valuable for bar staff. Other key areas where suppliers could add value include sustainable and environmentally-friendly initiatives (32%) and providing more reliable and timely deliveries (23%).
CGA’s On Premise User Survey also underscores the need to meet consumer expectations and maintain the quality of their experiences. For consumers, value for money in drinks means both ‘good quality’ (42%) and a product that is ‘worth its cost’ (38%), particularly in the beer category. In contrast, innovation, excitement, and visual appeal are more significant for cocktails.
Looking ahead, more than a third of hospitality leaders plan to expand their range of no- and low-alcohol beers and ciders (42%) or spirits (39%), as they seek to balance range diversity with consumer demand. Tequila (18%) is another category identified as having growth potential
Rachel Weller, commercial leader, GB & Ireland said, “Operators can’t afford to hold stock that isn’t delivering sales, and they know their range needs to meet the demands of their guests. Add in the intense competition for space, and it’s essential for drinks suppliers to create strong sales stories that show why their brands deserve to be at the bar. It’s particularly important to strike the right balance of quality and value, to emphasise credentials on reliability and sustainability, and to target the categories where ranges are rising rather than falling. To beat rationalisation, the top priority of all is to listen to what venues want and deliver the committed support they need.”
