As soon as 4 July arrived many venues opened their doors and welcomed back customers. It’s not like before though, lockdown has transformed the landscape and operators will need to adapt to prosper post-Covid. Lucy Britner and Michelle Perrett report
The coronavirus pandemic has turned the drinks industry upside-down. Bars and brand owners alike are rushing to understand how consumers will behave in a postpandemic world. On one hand, the crisis has accelerated the rise of home delivery and virtual events, and driven interest in local drinks and sustainability.
But it has also brought with it a financial black cloud, as many businesses struggle to get back on their feet and many consumers face job losses or reduced pay. Couple this gloom with safety concerns, and questions arise over consumers’ willingness to go out and what they might expect from the on-trade when they do.
Research from a Service Monitor survey of 21,000 pub-goers reveals that 66% say they would return to a venue to drink within three months of the easing of lockdown. The vast majority indicate they would expect regular and visible wiping of tables, as well as hand sanitisers and compulsory hand-washing. Another major issue highlighted was how bars need to manage customers’ fear of being too close to other people.
Here we outline four key trends as the trade gets to grips with a new reality. Customers will expect home delivery while embarking on a renewed quest for value and quality, and looking for a safe, sustainable drinking experience as well as virtual engagement.
Trend 1: Stand & deliver
When lockdown started, bars were quick to pivot to delivery, many of them bottling cocktails and setting up e-commerce platforms for the first time. Now that the on-trade is slowly reopening, will the initiative stick around?
‘I think a can of worms has been opened that now can’t be closed,’ says Ali Burgess, owner of East London’s Happiness Forgets, which offers free cocktail delivery within a three-mile radius. The cocktails are supplied with ice and garnish and while local delivery is fairly straightforward, national is a different story.
‘Things with fresh ingredients, like juice, can easily be delivered by Deliveroo or something similar, but nationwide, you would need a different tactic,’ he explains.
Across town, immersive hospitality group Lollipop, which operates Chelsea’s The Bletchley, has taken a different tactic and created a whole new e-commerce arm. ‘Deliveries are here to stay to cater for changing consumer behaviour,’ says Lollipop founder Sebastian Lyall.
The company introduced bottled cocktails at the start of April and has now opened up e-commerce platform Gulp to other ontrade suppliers, including independent wine suppliers. ‘We sell their products and they fulfil it,’ explains Lyall. ‘The on-trade will need to reach consumers in another way.’
Bars were quick to pivot to delivery, many of them bottling cocktails and setting up e-commerce platforms
Operations-wise, Lyall is in the process of moving the cocktail bottling unit to new premises as well as hiring a new team, focused on logistics, growth and marketing. ‘E-commerce and anything to do with tech needs a lot more investment, focus and a different type of staff,’ adds Lyall.
Even pub operator Greene King has expanded its delivery service. After a trial period in London, dishes and drinks can now be ordered nationwide. Takeaways can be ordered via a dedicated Greene King app, while delivery is largely fulfilled by the likes of Deliveroo or Just Eat.
When it comes to packaging, consumers who are motivated by convenience – as well as health and safety – may not have the same environmental concerns as pre-Covid-19. ‘In this time, unfortunately, I feel people are only thinking about convenience,’ explains Burgess. ‘We are using plastic bottles for our bottled cocktails, as they are about two-thirds cheaper than glass.
‘They are, however, made from recycled plastic and are 100% recyclable,’ he adds. Burgess says the bottled set-up will continue to be part of the bar set up, with an extra fridge on site especially for storage.
While the UK gears up for a new type of on-trade, it’s worth noting that it might not pan out how we think. For Yao Lu at Union Trading Company in Shanghai, for example, demand for off -sales has now disappeared. ‘As China is getting back to normal we were allowed to reopen, and we realised the moment that we did the demand for delivery/takeaway cocktails plummeted,’ he says. ‘It was simply no longer worth our time.’
But if this pandemic has taught us anything, it is that the on-trade is resilient and quick to adapt.
Trend 2: Drinks menus
Much has been said about the numbers of people drinking alcohol or ‘no and low’ at home during the lockdown. Operators will have to woo consumers out-of-home by offering them drink experiences while also focusing on issues of wastage and hygiene. Charlie Gilkes, co-founder of Inception Group, which runs Mr Fogg’s bars and Cahoots in London, says that sharing drinks are ‘on hold’ as venues will reopen with reduced cocktail menus.
‘We will be conscious of labour costs and also just easing the customer in and not giving them a paralysis of choice,’ he says. The group’s sites already benefit from offering bookings and table service. And it will increase emphasis on drinks pre-orders, which will help with both wastage and social distancing. ‘There will be a fair amount of cocktails that will be pre-batched. It can be done in a more clinical environment and it is more efficient in terms of time and preparation,’ he says. ‘We will double our efforts with hygiene and getting all of our glasswashers fully serviced. We are also having longer trays made especially for staff to deliver drinks to the tables.’
While consumers have been in lockdown, the issues of sustainability and health have become more of a focus. Gilkes says Inception Group is responding to this. It has made some changes to ingredients, such as drying lemon and orange rinds to use as drink garnishes, and is looking to add immunity-boosting drinks to its menus, such as fresh juices with carrot, orange and ginger.
We are also having longer trays made especially for staff to deliver drinks to the tables
Neil Donachie, co-owner of the Mercy Bar in Newcastle, has a different view, predicting that customers will be keen on indulgence, ordering drinks they have missed such as Espresso Martinis, Mojitos and Pornstar Martinis. He thinks operators will be hesitant to make drastic changes, as normality will be key to rebuilding consumer confidence. ‘Product selection will definitely shrink and choice will be reduced, as less profitable and popular items are lost as venues try to focus on a core profitable and popular selection,’ he adds.
While many venues can adapt their drinks to the new normal, pubs that offer that pint of cask beer and banter at the bar will face challenges. Remarkable Pubs managing director Elton Mouna says his 16 pubs are popular for their cask beer. The majority of his pubs have a reduced range of drinks for reopening but there are plans to get back to the full drinks range in the long term. He will not be permitting dwell time at the bar for drinks ordering.
‘We are switching to table service at the majority of our pubs in the initial phase of opening. It is better to have one or two people moving around the pub serving drinks than to have everybody moving around,’ he says.
Trend 3: Added value
In mid-May, chancellor Rishi Sunak warned of a ‘significant recession’ as coronavirus forced the country into lockdown. Looking back to the last recession in 2008, ONS figures show that consumers cut their alcohol intake. Those of us who have been around the block will also remember Prosecco’s meteoric rise, initially at the expense of Champagne, as drinkers sought out value. So what happens this time? House pours? Farewell, premium?
Quintessential Brands’ UK marketing director Russ Kirkham says that in many ways, this is ‘not a normal recession’ – consumers were forced into lockdown rather than making the decision to spend more time at home in order to save money. The government has also offered some financial support. He predicts an initial bounce for the trade as pent-up consumers finally get out of the house.
Consumers are going to care more than ever about the brands and businesses they are going to support
Pernod Ricard’s UK on-trade channel director James Bremner points out that when the economy was under pressure in 2008, recession-struck consumers responded by being willing to pay more for a premium drinks experience. ‘I expect we’ll see the same behaviour exhibited as the on-trade opens up again, although we’ll likely see a trend for going out less as social distancing concerns remain high,’ he says.
It appears the old mantra of ‘less, but better’ is back with a vengeance. ‘We anticipate a shift towards premiumisation, seeing consumers drinking less but better,’ says Tine Van Nevel, brand director at Bacardi Europe. This time around, consumers have also been tuning into YouTube, Insta and Zoom, learning more about cocktails. ‘We might now have more discerning consumers, which means making sure bars have good value brands in the speed rail,’ adds Kirkham. ‘And by value, I don’t mean cheap –I mean brands that offer genuine value.’
Value may also now be linked to brand integrity, points out BrewDog group chief operating officer David McDowall. ‘Some trends have been fast-tracked by a couple of years,’ he says. ‘Consumers are going to care more than ever about the brands and businesses they are going to support. They will do that for years to come, with an even firmer eye.’ He also points out that having had a period away from the on-trade, consumers may have a new appreciation for the ‘time, effort, investment, care and craftsmanship’ that goes into everything, from ‘a brilliant flat white to a pint of craft beer or a meal in a Michelin-starred restaurant’.
The notion of ‘less but better’ also means the on-trade has to create even better experiences, especially since consumers have enhanced their home environment, McDowall believes. ‘Our view has been, when we get these pubs back open, how can we open them 20% better?’ He outlines investment in beer quality, virtual menus and a health and wellbeing food offer. But he also warns that it is likely to be over a year before the industry returns to anything like pre-Covid trading levels.
Trend 4: See you online
As the veil came down on the pub trade, pre-planned events were cancelled. But that didn’t stop many bars and pubs moving into virtual events, not only to promote their venues but also to engage with their customers. This was anything from quizzes and bingo to virtual whisky and beer tastings, using platforms such as Facebook Live or Zoom. DesignMyNight, the events website, says it witnessed an ‘astounding rise’ in virtual and online events, with a 13,000% increase during lockdown.
While not every virtual event is likely to survive when the on-trade fully reopens, there are some venues that have seen a potential new income stream. Leighanne Bent, marketing manager at DesignMyNight, says there is evidence that some of these initiatives have potential post-lockdown.
‘Inventive Productions, who are responsible for Alcotraz and Moonshine Saloon – two of the UK’s most well-known cocktail experiences – launched Cassidy’s Pharmacy in April,’ she says. ‘This new experience has an immersive element whereby you order bespoke cocktails online and are then able to unlock unique recordings from various Western characters for a unique drinking experience at home. Now part of their future growth plans, Inventive Productions is a great example of something new and tangible that doesn’t have a lockdown shelf life.’
Another initiative set to continue after the lockdown comes from brewer and pub operator Wadworth. It set up a virtual pub, The Henry, to engage with customers and pub-lovers. Sarah Berry, head of marketing at Wadworth, says the virtual pub was not created as a commercial entity, but was about offering a sense of community and helping to combat loneliness.
As it grew in popularity it developed with pub quizzes, drinks showcases, bingo and live music events. There has been an organic business benefit in that The Henry customers, some of whom were not aware of Wadworth before the lockdown, are now buying beer from its online shop. ‘We decided to set up the group where people could have that pub banter, and that is genuinely where it started,’ says Berry. ‘We have had direct feedback from people that say they check in every day.’ Berry puts The Henry’s success down to the level of interaction. She says it will continue as a group and still ‘has legs’ for events such as festive quizzes.
This is a view backed by Bongo’s Bingo co-founder Joshua Burke, who says the most successful virtual events have been those that allowed people to interact ‘because they are not getting that from Facebook or their own life’. Bongo’s Bingo works with venues and warehouses across the country, and live-streams bingo via the Twitch platform from its own pub in Liverpool, the Bungalow. One of its events was live-streamed to 1.7m people via social publisher LADbible. ‘A lot of people had exhausted their Netflix and this was a way of people interacting and they were able to interact with us,’ Burke says.
Meanwhile, Donachie, co-owner of the Mercy Bar, says that consumers have become more connected with applications such as Zoom, which are likely to stay. ‘I do not think that these experiences will replace visits to bars, but it will be important for bars to consider how they can become part of more in-home experiences and virtual experiences,’ he says. A ‘new normal’ indeed.
This article was first published in The Community Issue, summer 2020. Illustrations: Sophie Melissa