Rules to win in the UK on-trade

The landscape has changed for alcohol brands in the UK on-trade and is still evolving. They must play by a new set of rules to stand out and win with drinkers, writes Sean Kelly, group account director and on-trade specialist at marketing agency Space.

After a few years of struggle, the UK on-trade has started to fight back. In fact the resurgence has seen growth for 20th consecutive months, with like for like sales up by 3.4% in November. This is, however, skewed both by London pubs and bars (up 6.1%) and those with food-led propositions (up by 4%), leaving more traditional wet-led pubs to still struggle outside of the capital – creating an interesting landscape.

One thing for sure is that this is a more competitive marketplace than ever. Whether this is the large groups battling it out, or independents carving out their own unique experience (just think about how many ‘Speak Easy’ style bars have opened recently) to appeal to their clientele, brands are now facing the challenge of how to cut through and continue to win in this sector.

Where once they were relatively free to promote in the bar, it is now getting tougher for them to close the deal. Moreover, where brands want to persuade brand switching in the on-trade, PubCos, which now account for 40% of the trade, want traffic rather than branded activity. Footfall is key.

The variety of brands in the drinks market driven by innovation, the decline in beer sales and drinker demand has fragmented the marketplace. The fruit cider boom and spirit flavoured beers (SPEERS) are appealing to younger sweeter palettes, and those searching for alternatives to the mainstream craft beers and small batch spirits like Gin and Bourbon have gone from strength to strength. It’s becoming tougher for brands to cut through the noise and into drinkers’ hands.

And we can’t also forget the relationship needed with the customer, who is still very much the gateway to success.

For drinks brands to thrive in this channel, they must find new ways to develop more meaningful relationships and relevance with drinkers. The goal is a greater share of your target drinker’s most valued resources:

· Time – A much greater share of the time drinkers spend with your brand e.g. socially
· Advocacy – Both at point of purchase and via sharing on social media
· Spend – A greater share of your drinkers’ repertoire
· Data – The hardest to achieve at point of purchase, but therefore valuable. Collected through promotion and important in the future of mobile marketing comms.

To win in this market and build greater brand intimacy, there are five key pillars that act as a framework:

1. Establish your purpose

The on-trade has its own dynamics and conditions that need to be specifically addressed in their overall marketing campaigns. Whilst you may be winning the ‘air war’ with your advertising and digital strategy, you can’t forget the ‘ground war’ in outlets to convert this into cold, hard sales and share of throat.

For example, a brand like Appletiser backs nominated driver schemes at Christmas, demonstrating to consumers that particular bars take drink driving seriously – and giving groups a reason to visit.

2. Focus on influence

Not all establishments are equal – and brands as part of their on-trade strategy should seek out those that will provide the most influence for them. It means being smart with focused investment with a particular pub group or specific venues that influence your target drinkers, which will create ripples that extend further to a wider audience.

Jack Daniels’ four month long takeover of The Macbeth pub in Hoxton, East London, demonstrates an interesting way to take its music platform to the on-trade whilst targeting a savvy, in the know drinker. The 150-year-old music pub lends its own credibility and acts as a beacon in the area. Now with plans to roll out to other small music venues nationwide, it demonstrates a real purpose and commitment to delivering the brand’s music platform to the on-trade.

Alternatively, low-cost on-trade focused product placement and partnerships can also help build momentum with your audience.

3. Find new ways to achieve visibility

A constant stream of new entrants makes the on-trade increasingly cluttered. At the same time, establishments are focusing on creating their own individual experiences – making it harder for brands to introduce traditional activations and POS kits. Brands need to find new ways to develop visibility and branding that complement the environment while still retaining their key message.

When Pilsner Urquell launched its unfiltered tanked beer in the UK it chose certain key pubs, such as London’s White Horse on Parsons Green, a pub renowned for attracting drinkers with an affection for good quality beers and ales. Delivered fresh from a tanker into eye-catching copper tanks the brand stands out, but with real relevance. The fresh beer, unaffected by the pasteurisation process that happens during bottling, creates a unique drinking experience and adds real value to the outlet and its drinkers.

Other alternative approaches to visibility have been made by Sol and Desperados, investing in key flagship outlets for their drinkers. Investing in the architecture, and in furniture like bespoke outdoor seating areas and DJ booths, they have made themselves more visible whilst fitting in with the bar aesthetic.

4. Technology

In many ways mobile has become the new POS, providing dwell time, media, visibility and purchase driver wrapped up in one device. If unlocked in the right way, mobile can reduce the reliance on outlets to deliver the campaign. Mobile offers a direct conversation with drinkers; allows the delivery of shareable content, and lets the brand tell its story in a more immersive way.

Fosters brought to life its comedy platform in bar by using the Blippar app to speak directly to drinkers with its Comedian in your Pocket campaign. Activated by drip mat, an augmented reality version of comedian Gary Delaney gave drinkers their very own stand up show live from the table. The next step is to see how brands can unlock mobile through wi-fi and iBeacons and offer live on-the-spot offers to drive purchase.

5. Social

The on-trade story doesn’t just have to live in the pub. Social offers a platform to fuel conversation away from outlets while providing currency for in-outlet conversations. It also provides the opportunity to define key consumption moments, establishing habits and rituals that lead to purchase.

Heineken’s @wherenext service gave drinkers in global cities a tool to help create a great night out and share the experience with others. Brands should also work with outlets (many have bigger followings than the brands themselves) to build on their social presences and communities through branded tools, suggested posts and promotion.

The on-trade will continue to prove to be a challenging environment for both trade and brands. It provides brands with a vibrant opportunity to build more intimate relationships with drinkers. However, to win they must play by an ever-changing set of rules.