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Return to the On-Trade: Insights for reopening in 2021

Trending 2021 Report

With venues allowed to reopen outdoors, ‘treat occasions’ will be key, with customers ready to trade up and celebrate with what they have truly missed – cocktails, draught beers, and out of home dining; while the rise of the Revenge Spender gives a good opportunity for high-end whisk(e)y.

Opportunities in the early weeks of trade

We already know the first five weeks of trade will take place outdoors. Research shows just over 26,000 sites have beer gardens, patios, terraces or other external areas that could be used to host guests – most of them in rural parts of England. 10,000 outlets also have a car park and the industry has shown throughout the pandemic there is plenty of creative and innovative operators out there, so plenty of potential for venues in the early weeks.

Pubs have an advantage on outdoor trading as two-thirds have outside space, compared to just 21% of bars and 8% of restaurants. Restaurants are however the number one venue consumers are most looking forward to visiting post-lockdown. The announcement from UK Chancellor Rishi Sunak to extend the 5% reduced rate of VAT for hospitality for the next six months, as well as alcohol duties freeze for a second consecutive year, might help business owners make the most of the lifted restrictions. 

For those without outside space, local authorities might let operators use street space to set out tables and chairs. Westminster Council has already confirmed the temporary al fresco scheme will return from the 12th of April when outdoor hospitality reopens, running until the end of September. This news will be welcomed by all outlets who can benefit from this initiative.

With the Euros coming and many in the on-trade are expecting a great summer ahead, operators are keen to create a safe environment for customers to return and enjoy the hospitality experience as we know it. The national roll-out of the vaccine is boosting consumer confidence and CGA’s Hospitality Consumer Forecast reveals 1 in 3 consumers intend to go out as much as possible once restrictions are lifted.

What was learned from reopening in July 2020 and what to expect

Serves difficult to recreate at home to dominate

We know that consumers are increasingly looking to treat themselves with alcohol at home – eCommerce and the Off-Trade have significantly benefited from hospitality venues being shut. 

But let’s face it, even with the boom of RTDs, clever at-home cocktail making kits and various Zoom cocktail classes; the knowledge, execution, expertise and overall drama of the hospitality sector have been greatly missed. 

Following the July 2020 reopening, Beer enjoyed the strongest recovery as good weather and a shift to lower tempo occasions benefited the category. The celebration of the July reopening with cocktails and shots drove significant share gains for Liqueurs & Specialities, as Gin’s share growth halted.

The rise of the ‘Revenge spender’

Those least affected by the devastating pandemic - people working from home and being unable to socialise, travel or even enjoy a drink with friends and family - have been saving money and planning how to ‘revenge spend’ once all restrictions are lifted. Since Boris Johnson’s road to recovery announcement, we have seen outdoor festivals sold out in a matter of minutes and even the over 50s rushing to book holidays as the vaccine boosts confidence.

The treat phenomenon has been around for quite some time now, but the pandemic made it even more so notable. As mentioned in CGA’s Hospitality Consumer Forecast, 87% of consumers plan to treat themselves when they go out again. Increasing your Whisk(e)y and premium spirits range in higher-end outlets, particularly in hotels and restaurants, will be key to capitalising on this trend.

Lastly, as called out in William Grant & Sons’ Trending 2021 report Whisk(e)y is entering a new age and tapping into more occasions, thanks to some strong brand and serve innovations. While Whisk(e)y has faced some category confusion and suffered from age-old perceptions, the category is seeing a growing interest from a new generation of millennial drinkers, breaking stereotypes and pushing boundaries to keep the category exciting. By understanding and catering for the six drivers in Whisky identified in ‘The Future of Whisky’; there is a phenomenal potential still within the category to go after once the trade is back on its feet.

Sources:
https://www.cga.co.uk/2021/03/01/uncover-outside-trading-opportunities-with-cga-rise-recovery-tracker/
https://www.thedrinksbusiness.com/2021/03/budget-2021-hospitality-vat-cut-extended-and-alcohol-duties-frozen/
https://www.williamgrant.com/gb/trending2021/
CGA Mixed Drink Reports 2020
William Grant & Sons’ ‘The Future Of Whisky’

Looking for a way to capitalise on the premium whisk(e)y category when trade returns?

Try a refreshing whisky highball cocktail, with Glenfiddich 12 Y.O, ideal for al fresco sipping.

Glenfiddich Buck Highball

 

50ml Glenfiddich 12 year old 

12.5ml Elderflower Syrup 

Soda water

Highball Glass

Ice Cubes

Lemon Wedge

 

Method: Add all ingredients to highball filled with cubed ice. Stir to mix and garnish.

 

Sources:
https://www.cga.co.uk/2021/03/01/uncover-outside-trading-opportunities-with-cga-rise-recovery-tracker/
https://www.thedrinksbusiness.com/2021/03/budget-2021-hospitality-vat-cut-extended-and-alcohol-duties-frozen/
https://www.williamgrant.com/gb/trending2021/
CGA Mixed Drink Reports 2020
William Grant & Sons’ ‘The Future Of Whisky’

 

About the author

William Grant & Sons

William Grant & Sons Ltd is an independent, family-owned Scottish company that distills Scotch whisky and other selected categories of spirits.

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