'Brewdog will drag sours into the mainstream...'
2017 has been another year of growth for the craft beer sector; it seems rare to find somewhere that doesn’t have some sort of offering. That trend as a whole will continue in 2018, but I feel a plateau coming.
IPAs are always on trend but in the last 18 months we’ve seen the style shift significantly towards the hazy or New England style. Let’s not forget that this trend is actually driven by yeast, not hops (for a change). I expect to see this style continue to become more popular amongst drinkers, but be prepared: knowledge of the style will help to sell to the more traditional drinker who only feels comfortable with clarity.
I think sour beer will see more growth this year, particularly fruited sours and more accessible examples in the style category. Beers like Salty Kiss from Magic Rock, brewed in Huddersfield, is a great entry level for customers. Perfectly balanced and refreshing, it’s even turning the non-beer drinkers! BrewDog is currently investing lots into its sour beer project, I tip them to drag this style into the mainstream in a big way.
As craft beer attracts more people I see drinkability being the way to shift volume. Sure the high abv beers are popular, but beer is social and as a country we consume by volume! Cloudwater was all about the DIPA last year but it's just released a couple of sub 3% hoppy pale ales. This will help to kick the trend on, although you should all be drinking Kernel Table Beer by now anyway! As the economic squeeze continues, lower strength beers, and their subsequent lower duty rates, will be all the rage.
'Pubs must continue to engage with customers on a local level...'
In recent years customers in the hospitality sector are less willing to walk into experiences with a half-hearted approach. People consider their options more carefully and take more ownership of their choices when at the bar or the dining table.
People seem to be slowly reclaiming things that large corporations had ‘taken’ from them: they are actively engaging in their local brewery's Saturday Taproom open days. On Saturday mornings, the local craft bakers have queues outside. All these things that were for a long time mass-produced, are now actively being sourced by people locally. This attitude will continue, but they won't come to a head in 2018. As a result, pubs must continue to innovate and engage with customers on a more local level, especially the pub groups.
My feeling is that pubs/bars will also begin to engage customers by brewing their own beers with local breweries, so that customers and bar teams will both be equally engaged in selling the beer.
More pubs will begin to utilise their outdoor spaces in the winter, with pop-up styled bars using them in a variety of ways, such as cinemas, table tennis, ice-bars etc.
Phone-paying apps may well see a rise in popularity as the smartphone generation continues to insist on doing everything via apps on their phones. However, this will not cause us to lose, good old-fashioned table service, which the majority are still in favour of.
Finally, I think we will see customers focus more on trends and pay closer attention to their cyclical nature. We’ve all seen pulled pork and salted caramel become very popular over the last couple of years, but not many people questioned why. This year customers will begin to ask, ‘Why is this current thing trendy? What’s causing this?'
'We may see a war for talent...'
'Change is inevitable, growth is optional!’ (J C Maxwell) seems very much the message to me with regards to pubs in the years ahead. Economic factors certainly look challenging whichever side of Brexit one favours.
Customer confidence at present remains high and while competition among the big players remains fierce, the combined performance is far from disappointing and whilst pub closures continue, the rate seems to be slowing.
Any drop in spend and customer visits is however likely to cause some pain, especially in areas where investment has generated a potential oversupply of bars and restaurants. This coupled with high property and lease costs, increased rates and the current high inflation on the goods and materials in both the food and drink areas will lead to significant margin squeeze and price pressure.
We may see a ‘war for talent’ right the way through the levels as employment scarcity is generated through a combination of record levels of employment coupled with a reduction in European workers. This could lead to the industry facing rising staff costs through market conditions as well as national minimum and living wage requirements.
Growth, in my opinion, however remains a good option. While we will see casualties, churn and consolidation, operators who focus on quality and delivering great hospitality through engaged and confident teams will continue to grow and perform. Food has been critical to the longevity of pubs and consistent, fresh quality food remains a tremendous opportunity allied with the increasing interest in food with beer.
Well thought-through drinks portfolios are also demonstrating that pubs can thrive through having a strong drinks side. Cask beer remains a tremendous opportunity, with 65% of licensees reporting it to be in growth (Cask Report 2017/18). Cask along with craft beer, gins and cocktails continue to provide a genuine reason to want to go to the pub.
There appears general agreement that there remains huge opportunity to improve quality and standards of cask beer in pub, with only a third of beer drinkers believing the staff have the correct knowledge. This represents a massive opportunity to invest in the engagement of teams and thus the quality of the beer offer to grow and to succeed further.