Future Shock - CGA€¦ · ALMRGA & C Future Shock Report - Issue Three 4. The ALMR has always grown with the industry it serves. Our sector has been transformed in the 25 years since

Future ShockIssue Three

Partners

Contents

Introduction

Introduction

1. 25 years of the ALMR CelebratingALMR’shistoryandchangesfromthreeindustry

figureswhohavetradedthroughoutthefull25years.

2. Market Focus ExploringkeyissueswithexclusiveanalysisusingCGA’sarray

ofmarketdatatounderstandkeyissuesinthemarket.

3. Scotland Withminimumunitpricingandlowereddrinkdrivelimits,

Scotlandisoftenusedasatestinggroundforlegislation. Whyisthisandwhatisnext?

4. UK Market Snapshot CompilationofCGA’skeyindustrybenchmarksforsupply

anddemandmetrics,inoneplace.

5. Category Insight Contributionsfromreportpartnersandcategoryexpertson

keymarketchallenges.

WiththeALMR’s25thyeardrawingtoclosewebringyouour3rdFutureShockReport–lookingbackattheoriginsoftheassociationandforwardtothechallengesthatwewillsupportmembersinfacing.

OneofourfoundingprincipleswastogiveoperatorsavoicewithGovernmentandthatvoiceisnowarguablystrongerthanever.Yes,attimesitdoesn’tfeelthatway,butGovernmentisincreasinglyawareoftheroleoursectorplaysinemploymentandeconomicgrowth.

ALMRisleadingforhospitalityonexistingandfutureEUcitizens’rights,influencingGovernmentpolicyonbusinessratesandworkingonbehalfofoperatorsonemploymentissues,suchastheNationalLivingWage,andworkingtoimprovethereputationofthesector. There’smuchmoretodoin2018andbeyondbutourevidence-basedapproachwillserveuswell.

Kate NichollsChief Executive – ALMR

We’redelightedtosharewithyouthethirdFutureShockreportinconjunctionwiththeALMRanditspartners.Eatinganddrinkingoutaredynamicandfastchangingmarkets,and‘FutureShock’reportisdesignedtohelptheindustrytotrackitsperformancewhilstshoutingaboutitsscaleandimportance.InadditiontoCGA’sdatasources,weworkedcloselywiththereportsponsorsandotherindustrybodiestoensurethatwehavethemostcompletepictureavailable. Inthisissue,thereareobviouspoliticalmattersthatattractunavoidablefocus.However,wealsolookedforareasofinterestforthemarket,providinginsightintothekeymarketdynamicstoallowustogivethemostcompleteandaccuratemarketnarrative.

Jamie CampbellBusiness Unit Director – CGA

ALMR&CGAFutureShockReport-IssueThree

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25 years of the ALMR

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It’snowaquarterofacenturysincethedayasmallgroupofpubentrepreneurssataroundalunchtableinLondonanddecidedtheyneededavoice–avoicewithGovernment,withtheirlandlords,mainlythebrewers,andevenwiththepublic.AndsotheAssociationofLicensedMultipleRetailerswasborn.

Muchhaschangedinthemarketsincethen,butsomuchhasalsostayedfamiliarlythesame.Thebigissueofthedaywastherelationshipbetweenthosefledglingpubgroupsandthepeopleowningtheirpremises.Theneedfora‘leasecode’loomedlarge,solittlechangetherethen.

RememberthiswasindaysoftheBeerOrders,whichtheGovernmenthadintroducedtosupposedlyincreasecompetitioninbeersupply.Itledtothesell-offoflargeswathesofpubsbythethenbigbrewersandtheemergenceofnewleasedpubcos.Theordersmaynothavedonemuchforbeercompetition,buttheunintendedconsequencewasthebirthofawholestringofentrepreneurialpubgroups–thosesameoperatorsseekingavoice.

TheBrewersSociety,theforerunnerofthepresentBritishBeer&PubAssociation,didn’twantthemasmembers–theyweretoosmalltheysaid.JoiningtheNationalLVA,whichrepresentedrankandfilepublicans,wasn’tappropriateeither.SotheybuilttheirownorganisationintheALMR–whichisstillverymuchhere.

Whatthosefoundersmaynothaveanticipatedistheshapeofthemarket–howeatingouthasnowbecomemoreimportantthandrinking-out,butthatthetwotogetheristhecombinationthatreallyworkswiththepublic.ThefactthatgoingouttobeentertainedisstillverymuchpartoftheBritishwayoflifeisthegoodnews,eveniftheshapeandscopeofthatseemstochangebytheweek,asnewentrantscomeupwithnewwaystoengagethepublic.

Andperhapsthefactthatdespiteallthetalkofmarketconsolidation,thesectorcontinuestoattractambitiousentrepreneursisanotherconstant.Itcaneasilybearguedthatthemarketisactuallymorefragmentedthanever–withinnovativeentrepreneursattheheartofboththemarketandtheALMR.

Fortheconsumerthedistinctionsbetweenpubs,bars,restaurants,coffeeshopsandthemanyandvariedhybridconceptsoutthereareblurred,iftheyexistatall.Thatisasignificantchange.ThoseALMRfoundersmaynothaveknowntheactualshapeofthingstocomebuttheydidknowchangewascoming–andprobablyheretostay.

TheALMRnamemayseemthatitwasdecidedbycommittee(becauseitwas),buttheintentionnottokeeptheassociationpurelyapubbody,andnottohavepubinthename,buttokeepopentheoptionofattractinglike-mindedoperatorsfromthewiderhospitalitymarketwasalwaysthere.

So,thefactthattoday’sALMRencompassespubs,bars,latenightvenues,casualdiningandthebigcorporatesaswellastheentrepreneurialdisruptersshouldn’tbeasurprise.Theambitionwasalwaysthere–it’sjusttaken25years.

Thechallengesforthesectorremainreal,andthisreportsetsoutindetailmanyofthem.ButtheopportunitiestomeettherequirementsoftheBritishpublictobefedandwateredandentertainedremainasrealaswell–evenifthoseneedswillkeepchanging.

Peter Martin is the out of home market’s leading commentator and Vice President of CGA, the market-leading data, research and insight specialists.

Whathasn’tchangedovertimeistheneedforavoiceforthesector.

Taking the shock out of the futureByPeterMartin,vicepresidentofCGA&co-founderoftheALMR


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UntiltheALMR,therewasnonaturalhomeformultiplelicensedbusinesses.Theassociation,andbusinesseslikemine,grewoutoftheBeerOrdersofthelate1980s,whichsuddenlydiversifiedourindustry.Untilthen,bigbrewersdominatedanditwasunusualforpublicanstohavemorethanoneortwopubs.

TheBeerOrderschangedallthat.Theyfreedthingsupforpubretailersandcreatedagenerationofentrepreneurswhocouldfollowtheirownpaths,borrowfromthebanks,getlongleasesandtakeonmoreresponsibilities.Wewereoneofthefirstcompaniestotakeadvantageoftheopportunitiestotradefromallthedifferentpartsofabuilding,andthat’showBedsandBarswasborn.

TheALMRhasbeenvitalinrepresentingtheinterestsofbusinesseslikemine.It’ssteeredusthroughthecomplicatedtieissue,stooduptothebigpubcompaniesandunitedourindustry.Thewayithasgrownhasbeenphenomenal.IrememberALMRChristmasLuncheswhentoget80peoplewouldbeconsideredasuccess;nowadayswegetmorethan1,200.

Thejobsourindustrygeneratesandthecashitcreatesisincrediblyimportanttothiscountry.Whilemanypeoplewithingovernmentstilldon’tfullygraspthat,theALMRhasmadesuretheyatleastunderstandtheissuesweface.Wehavebecomehospitality’sgo-topeopleforministers,andourstrengthmeanswecanlobbyhardforsensibleandreasonabledeals.

Personally,myrelationshipwiththeALMRhasbeenafundamentalaidtogrowingourbusiness.I’vealwaysbeenproudtobeamember,andI’veenjoyedbeingakindofminister-without-portfolioforit–canvassingpeopleandchampioningourindustry,especiallyasaplacetowork.MyheartisintheALMR,andit’sthebiggestandbestrepresentationofthewayIfeel.

Interview with: Keith Knowles OBEFounderandChiefExecutiveofBedsandBarsandfounderofthePerceptionsGroup


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TheALMRhasalwaysgrownwiththeindustryitserves.Oursectorhasbeentransformedinthe25yearssincetheassociationlaunched,andmostofthechangehasbeendrivenbyconsumersandtheirshiftingattitudestomealtimes,loyaltyandmuchmore.Backinthe1980s,amealoutwasaspecialoccasion,andwelookedenviouslyattheUS,whereeatingoutwassomuchmorecommonplace.Nowwehaveagenerationofyoungpeopleforwhomgoingouttoeatanddrinkisawayoflifebuttechnologyhascompletelychangedthewaytheybehave.Thechallengeforusasoperatorsistokeepup.

Atthesametime,ourindustryhasbecomelessfragmentedanddisparate,withmorebigpubandrestaurantbrands.Wehavebecomeahugesourceofrevenueforgovernmentandanimportantsourceofjobs,andthathasmadetheneedforproperrepresentationmorevitalthanever.Weareaneasytargetfortaxeslikebeerduty,andourbusinessratesaregettingmoreandmoreonerous,especiallyinaworldwheresomuchisbeingsoldonline.Ifwewanttoimproveoursituation,weneedtoexplainthingsbettersothatpeopleingovernmentcanproperlyunderstandthepressuresweface.

Ifwearegoingtoachievethat,itisimportanttospeakwithonevoice.TheALMRhashelpedourindustrycongregatearoundthebigissues,andcollaborateswithotherassociationswhenitisimportanttodoso.Politicianscomeandgo,andtheyalwaysseemtoliketalkingaboutoursector–especiallyifwe’rebuyingthedrinks.Butwe’restillnotwhereweneedtobe.Ourjobistogetproperengagementwithgovernmentandmakeourindustryanevenbetterplacetobe.

Ourindustryhaschangedenormously.Tradingissomuchmorechallengingnow,partlybecauseoftheintensecompetitionandpartlybecauseofgeneralbusinessissueslikerisingrates,rentsandothercosts.Twenty-fiveyearsagoyoucouldopenabusinessandbeinprofitfromdayone.Nowthereturnsaresomuchmoredifficult,anditcantakeayearormore.

Thebodyofthemarkethaschanged,too.Therearefarfewerpureboozerpubsnow,andthemoveintofoodhasbeenamassiveshift.Backthen,tomake10%ofsalesfromfoodwasunusual.Now,withsomeexceptions,ifyou’renotdoingatleast30%you’reprobablynotinthegame.Addinthearrivalofsomanyrestaurants,andtheroleofsupermarketsinthetake-homemarket,andtheenvironmenthasalteredcompletely.

WefoundedtheALMRtogivemultipleretailersavoice.Breweriesandtenantshadassociationstolookafterthem,butweneededtofightourcornerwithcommercialpropertylandlordsatatimewhenrentswererisingandprofitabilitywasgettinghardertoachieve.Nowwecaternotjustforpubsbutthefullrangeofhospitalityoperators.

Ourlobbyinghasbecomemoreandmoreimportant.Wecan’tsaywe’vebeensuccessfuloneverythingwe’vecampaignedfor,butwe’vecertainlybeenabletocurblegislationsothatitismorepalatable.Ifitwasn’tfortheALMR,wewouldn’thavehadasay.

WealsosetuptheALMRtobeasocialgroup.Itwasaplacetotalktoothers,andithelpedusrealisethatwefacedmanycommonchallenges.Wemightallbeincompetition,butwecanstilltalkandhelponeanother,andthat’soneofthethingsthatmakehospitalitysuchagreatindustry.TheALMRhasgrownandgrown,butourethoshasbeenconstant.


Interview with: Bob Ivell

Interview with: Peter Salussolia OBE

Non-executiveChairmanofMitchells&ButlersandPresidentoftheALMR

ChairmanandManagingDirectoroftheFoundationGroup,andlifetimeVicePresidentoftheALMR

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Interview with: Bob Ivell

Market Focus

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Toputthatincontext,internetaccessathomewasvirtuallyunheardof25yearsago.Nowit’salmostuniversal:90%ofhouseholdshaveaccess[3].Technology’sinfluencehasbecomepervasive–especiallyforyoungergenerations–andit’stakingasignificantsliceoutofhouseholdbudgetsasaresult.

Technology’simpactonconsumers’time-useisperhapsmorestriking.TheUKdigitalaudiencenowspendsanaverageof83hoursonlineinamonth(March2017).Thisisbeginningtochallengetheroughly115hoursofbroadcastTVwatchedpermonthforadultsaged16+,asnowadays,peopleareonaveragewatching30minutes(12%)lessTVadaythantheywerein2011–adeclinedrivenbyyoungadults.[1]

JustconsidertheevidenceonFacebookusagealone.Ofcom’sreportshows70%ofadultsclaimtouseFacebookortohaveaprofileonit,60%ofitsuserssaytheylastcheckedtheirprofilewithinthelasthour,whilstAndroidusersareaccessingthesitearound12timesaday.[1]

Butit’sthegrowthofmobileinternetaccessthatismostinfluential,with36millionpeoplenowaccessingtheinternetviasmartphonesand/ortablets,withtheOfcomreportshowingthat76%ofadultsnowownasmartphone,comparedtoonly26%in2010.Threequartersofourindustry’sconsumersareoutandaboutwithaportablecomputer,empoweringthemwithchoiceandflexibilityoverhow,where,andwhentheycommunicatewithpubs,barsandrestaurants.[1]

Atthesametime,rapidgrowthinaccessto4Gservices,whichnowhaveover50millionsubscriberscomparedtolessthan3millionin2013,isdrivingrapidgrowthinthevolumeofmobiledata.[1]

Asconsumershaveenthusiasticallytakenupsmartphones,theyarealsorapidlytakingtocontactlesspayment.ArecentBarclaycardreportshowsthatsixintenBritonshavenowadopted‘touchandgo’payment,tenyearsafterthetechnologywasintroduced.DatafromUKFinanceshowsthenumberofcontactlesspaymentsinthefirsthalfof2017increased130%comparedtoH12016.[2]Thenumberofcontactlesscardsincirculationgrewbyonly20%overthesameperiod,soitisevidentthatincreasinglyconfidentconsumersarenowrapidlyadoptingthetechnology,embracingitsbenefitsofsimplicity,convenienceandspeed.

Butwecannotoverlooktheagedivideindigitalusage.Only10%ofhouseholdslackinternetaccess,butalmost30%ofover65ssaytheyhaveneverusedtheinternet[3].Thisisademographicsub-groupimportantforseveraleatingoutmarkets,notleastpubdining.

Comparedtotoday’s‘always-on’youngeradults,theolderagegroupsarealsomuchlesslikelytobesmartphone-dependent,theyaremuchlesslikelytohavea4Gmobileservice(83%of16-24scomparedtoonly28%ofthoseaged55+),andtheyaremuchlesslikelytoaccessdataservicesonamobilehandset.[1]

Whatevidencedowehavefromourmarketinrelationtoconsumers’currentuseoftechnology?

Weknow,throughCGA’sBrandTrackresearch(October2016)thatalmost6in10outofhomedinerssaytheymaycheckbar/restaurantwebsitesbeforetheyvisit.Theirmain‘missions’aretocheckthefoodmenuandopeningtimes.Unsurprisingly,thesetwoelementsthereforebecomethebiggestpotentialfrustrationsonwebsites.More‘advanced’behaviourssuchaspre-ordering(atthetimeoftheresearch),areonlyusedbyaverysmallminorityofthosewhocheckbar/restaurantwebsites.

Bycontrast,bookingtablesonlinehasbecomeawidespreadbehaviour;aroundhalfofoutofhomedinersnowdoso.Ofcom’sreportconfirmstheadvanceofsmartphones,butinwhatwaydoconsumersusemobiledeviceswheneatinganddrinkingout?CGA’sBrandTrackresearch(October2016)suggeststhatalmost90%ofoutofhomedinersownatleastonesmartphone,tabletorothermobiledevicesuchastheiWatch,sothepotentialisvast.

However,theresearchalsoshowedthatmobiledeviceusageissofarledbythreebasicactivities:toaccesson-sitewi-fi,toreceivevouchersandoffers,andaswithwebsiteusagegenerally,tobrowsemenus.Otherlesscommonactivitiesaremoreage-related.Whilstaround1in4claimtousetheirmobiledevicetoreadreviews(egTripAdvisor),itismorecommonplaceamongtheoldergenerations.However,interactingwithanoutletonsocialmediaviaamobiledeviceisanactivitystillmostlydonebytheunder45s.

Tech savvyWithmoreandvariedtechnologicalinnovationsconstantlycomingtomarket,it’sdifficultforoperatorstoknowwhichtechtobackandwhen.CGA’sresearchgivesusaviewonconsumeruptakeandconfidence.

Photo by Ben Kolde on Unsplash


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InCGA’sFebruary2017BrandTrackresearch,1in5outofhomedinerssaidtheyhaddownloadedabarorrestaurantmobileapptotheirsmartphoneortablet,withaccesstorewardsandoffersbeingthemostcommonmotivation.

Arguablythemosteffectivetechnologysolutionswillbethosethatbestaddressconsumers’frustrations,andresolve‘pinch-points’inthecustomerexperience.CGA’sBrandTrackresearch(October2016)askeddinerstoidentifytheirbiggestfrustrationswhengoingoutforameal.Thekeyissuehereisclear:foodnotarrivingquicklyenough.7outof10saythatthishappenssometimesoralwayswhentheyeatout.It’sthenumberonefrustrationforoutofhomediners-acrossallagebandsandirrespectiveofhowoftentheyeatout.Thisiswheretechnology,ofteninthekitchen,candomosttohelp.

Lowerdowntheadoptioncurve,CGA’sBrandTrackresearch(February2017)showedthatsofaronlyaround10%ofoutofhomedinersusemobiledeviceswhenmakingfood/drinkorders

orpayment.Howeverthebarrierstousagearemoreaboutapreferencefordealingwithaperson,thantodowithignoranceoranapparentlackoftrustinthetechnology–andwewillalwaysbeanindustrythat’sinherentlyaboutperson-to-personinteraction.

Inmorerecentresearch(July2017),CGAdatashowsthatusingmobiledevicesforpayingafterorderingisalittlemorewidespreadthanusingthemforpre-paymentorpre-ordering–actionsthataremorelikelywhenorderingfood,thandrink.Thesebehavioursarealsoclearlyskewedtoyoungeragegroups:overhalfthosewhosaythey’veusedtheirmobiletopayforfoodaftertheyorderedfoodareagedunder35;only1in7areaged55andover.Thecurrentprofileofthoseusingtheirmobiletopre-orderandpayisevenyounger.Astheevidencefromcontactlesspaymentplainlyshows,thereisconsiderablescopeformobileapplicationstobecomemuchmorewidelyadoptedinfuture,particularlyamongolderconsumers,andtheuptakeisliabletobesimilarlyrapid.

Health & WellnessReadingthepopularpress,youwouldbeforgivenforthinkingthattheUKisgettingprogressivelylesshealthy.Butwhileobesityisaclearareaforconcern,therearealsomanypositiveindicationsofbehaviouralchangeinthepopulation.

Firstly,intermsofhealthyeating–researchfromKantarWorldpanelindicatesthatalmostfouroutoftenmealsathomenowincludeaningredientspecificallychosenforhealthreasons,afigurewhichhasdoubledsince1980.[4]

Intheoutofhomecontext,accordingtoCGA’sBrandTrackconsumerresearch,almostsixoutoftenadultsagreethatthey“proactivelytrytoleadahealthylifestyle.”Thissentimentismostevidentamongdegree-educatedyoungurbanprofessionals,andthosewhotakeakeeninterestinfoodanddrink,whoconsiderthemselvesknowledgeableonthesubject.Bycontrast,it’stheconsumerswhoaren’tinterestedinfoodanddrinkwhoaremorelikelytodisagreethattheytrytoleadahealthylifestyle.

Becauseofthisdemographicskew,thosewhoaremorelikelytosaytheytrytoleadahealthylifestyle,alsogoouttodrinkmoreoftenthantheaverageandaremorelikelytosaytheoptionofhavingalcoholisdefinitelyanimportantfactorintheirchoiceofwheretogoouttoeat.Despitethemediaheadlines,webegintoseethattherearenosimpleanswersinthisarea.

Secondly,andperhapsthebestexampleofhealthierliving,isthechangeinthenation’ssmokinghabits.AccordingtoONSdata,in1992,28%ofadultsweresmokers,butthishasnowfallento16%.Among16-24yearolds,in1992oneinthreeofthemsmoked,butthathasdeclinedtoonlyoneinsixnow.Atthesametimeaveragedailyconsumptionamongsmokershasdeclinedbyover20%.[5]

TheChiefExecofPublicHealthEnglandhasdescribedthesechangesas“fantasticnews”,notingthattheUKnowhasthesecondlowestsmokingrateinEuropeafterSweden.

Photo by Joanie Simon on Unsplash


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However,challengesremainamongtheleasteducated,theleastaffluentandthemostdeprivedsectionsofthepopulation–wheresmokingratesremainhigherthanintherestofthepopulation.

Thirdly,trendsinUKalcoholconsumptionshowthatwhilstpercapitaadultconsumptionroseduringthelate1990s,reachingapeakin2004,ithassincedeclined,withOECDdatashowingtheUKnowlyingbroadlyinthemiddleoftherangeof41countriesonwhichitreports.[6]

TheproportionofadultsinGreatBritainwhoclaimtohavehadanalcoholicdrinkinthelast7daysdeclinedfrom64%in2005to57%in2016,ledbyadeclineamong16-24yearolds,from60%to46%.Overthesameperiod,theproportionofadultsclaimingtobeteetotalhasrisenfrom19%to21%,atrendledby16-24yearolds,wheretheclaimedteetotalismratehasincreasedfrom19%to27%.[7]

Otheralcoholindicatorsshowpositivemessagesaboutbehaviouralchange.Governmentreportsindicatethenumberofdrink-drivefatalitiesinGreatBritainwas200in2015,comparedto660in1992,despitethegrowthintrafficovertheperiod.Thenumberofcasualtiesindrinkdriveaccidentsinthelatestthreereportedyears(2013/14/15)arethelowestrecorded[8].Nonetheless,theLocalGovernmentAssociationhaslobbiedWestminstertoadoptnationwidethelowerdrink-drivelimitintroducedinScotlandin2014.

Theevidenceonobesityismuchlessencouraging.DatafromNHSEnglandshowstheincidenceofobesityinadultsaged16+increasedfrom15%in1993to27%in2015.Afurther36%oftheadultpopulationisdefinedasoverweight,aproportionthathaschangedrelativelylittleoverthelast25years,despitetherisingincidenceofobesity[9].TheUK’sobesityrateishigherthaninanyotherEuropeannationwiththeexceptionofHungary,andmorethandoubletheratesreportedforItaly,SwitzerlandandNorway.Obesityratesamongschoolchildrenhavealsobeenrisingand,aswenotedwithsmoking,theissueismostpronouncedinthemostdeprivedareas,where26%ofchildrenaredefinedasobesecomparedto12%ofthoselivingintheleastdeprivedareas.

Butthegrowthofobesityismatchedbysomeapparentlycounter-intuitivechangesinthepublic’sdiet.Long-runDefradataonthequantityoffoodanddrinkpurchasedforUKhouseholdsindicatesthatfrom1992to2015,averagepercapitaconsumptionofsugardeclinedbyover60%,consumptionoffatsfellbyoverathird,andforcarcase(red)meat,thedeclinewasaround30%.[10]

Percapitahouseholdconsumptionofsoftdrinkshasgrownby6%overthesameperiodalthoughconsumptionoflowcalorieoptionshasgrownbyafactorofmorethan2.5.Lowcalorievariantsnowaccountfor51%ofsoftdrinkconsumptionaccordingtoDefra’sdata,comparedtoonly20%in1992.Measuredseparately,mineral/springwaterconsumptionmorethandoubledoverthesametimescale.[11]

Inthecontextofrisingobesitylevels,withDefradata[11]suggestingthat31%ofhouseholdfoodanddrinkexpenditurenowtakesplaceoutofhome,ourindustryclearlyfacespressure,amidcallsforlegislativeinterventionstomodifypublicbehaviour.Specifically,‘upselling’oflargerportions,additionalsidesortoppingshascomeunderscrutinyfromTheRoyalSocietyforPublicHealth,accusingtheindustryofencouragingtheconsumptionofextracalories.

Butthefoodanddrinkindustryisproactivelyrespondingtotheseissues,notableexamplesbeingthegraduallyincreasingprovisionofnutritionalinformationfordiners,andmanufacturers’pre-emptivereformulationsofsoftdrinksinrelationtotheplanned‘SugarTax’,duetobeleviedfromApril2018.

Inlinewiththedeclineinpercapitaconsumption,consumersarebuyinglesssugarinthegrocerymarket.DatafromKantarWorldpanelshowsthatover60%ofhouseholdssaytheyareveryorfairlyconcernedaboutsugarconsumption[4].That’sahigherproportionthanforanyothernutrient.

Butwhataboutconsumerattitudesintheoutofhomemarket?CGA’sBrandTrackconsumerresearch(October2016)showedalmost50%ofoutofhomedinerssaythattheyoftenoralwaystaketheavailabilityofhealthyoptionsintoaccountwhenchoosingwhere


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toeatout,withlittledifferenceevidentbetweenmenandwomen.However,1in4youngdinerssaytheyalwaystaketheavailabilityofhealthyoptionsintoconsiderationwhenchoosingwheretoeat,comparedtoonly11%ofthoseaged55+.Healthyoptionsarealsomoreinfluentialforthosewithdegree-leveleducationandthosewithhigherhouseholdincomes.

Additionally,theinclusionofnutritionalinformationonmenusisclaimedtoinfluencearound4in10outofhomediners’choiceoffoodwheneatingout,andyoungerdiners,themoreeducated,andthemoreaffluentareagainmorelikelytobeinfluencedthanothers.

Intermsofingredients,thethreekeytargetsofthehealthlobby–sugar,fatandsalt–areeachsaidtobeimportant(orveryimportant)factorsintheselectionofamealbyabouthalfofoutofhomediners.Theyaresignificantfactorsformoredinersthancaloriecounts.

Ratheraswesawwithoutofhomedrinkingbehaviour,it’snotablethattheconsumerswhoeatoutmostoftenarealsothemorehealth-conscious.Morethan1in3ofthosewhoeatoutatleastthreetimesaweeksaytheyalwaystakehealthyoptionsintoaccount,andover50%saynutritionalinformationisaninfluenceonwhattheychoosetoeatinrestaurants.Bycontrastonly13%ofthosewhoeatoutlessoftenthanonceamonthclaimtoalwaystakehealthyoptionsintoaccount,andaround30%saytheirchoiceisinfluencedbynutritionalinformation.Again,themostactiveconsumersappearnottobetheonesmostinneedofeducation.

Isthereanapparentfrustrateddemandfor‘healthier’softdrinksintheoutofhomemarket?CGA’sBrandTracksurvey(July2017)foundthat60%ofadultsagreedorstronglyagreedwiththestatement “Iwouldliketoseemorehealthysoftdrinksonoffer”.Theproportionthatstronglyagreewashigheramongthosewithbachelors/higherdegrees,andwasloweramongthe65+population.

InthesameroundofconsumerresearchCGAlookedattheimportanceofhowhealthythedrinkis,whendecidingwhattodrink.46%ofadultssaidthiswasimportantorveryimportant,ledbythe

higherincomegroups,thosewithuniversity-leveleducation,andrespondentswithchildreninthehousehold.Lessthan1in4adultssaidthisfactorwasunimportantintheirdrinkchoice.

CGA’sresearchalsospecificallyexaminedtheimportanceofthesugarcontentwhenconsumersdecidewhattodrinkatcasualdiningrestaurants.Theresultsareverysimilar.49%ofadultssaidthiswaseitherimportantorveryimportanttothem;only22%saiditwasunimportant,withlittledifferencebetweenthegenders.Itsimportanceisgreatertothosewithdegrees,thoseinhigher-earninghouseholds,andamongpeoplewhohavechildren.

What’stheevidencefromsoftdrinkssalesintheoutofhomemarket?CGAdatashowsthatsoftdrinksarethebestperformingmajordrinkscategoryintermsofontradevolumesaleschange(MATtoJune).Withontradesoftdrinkssalesofaround£4bnintheyeartoJune(accountingfor15%ofontradedrinksturnover),dietcarbonatesarecurrentlygainingmarketshare.

Acrossallthehealth-relatedcategorieshere,thereareclearlyrecurringmessagesaboutconsumereducation.Theyclearlyechothecommentsofofficialbodiesonthelinksbetweenobesityandsocialdeprivation.Meanwhiletheconsumerswhoaremostactiveintheoutofhomemarketareshowntobethemorehealth-conscious.Iftheindustrydoesbecomespecificallytargetedbypublichealthmeasures,itsmostregularcustomersarenottheprimetarget.

LegislatorsinScotlandarebeingencouragedtoconsidertheroleofdesserts,icecreamsandcakesintheoutofhomemarket.Defra’sownestimatesindicatethattheseareoneoftheleadingsourcesofsaturatedfatconsumedwheneatingout.ThenextsectionofourreportconsidersthemarketinScotland,wherethereareprecedentsforthetriallingofhealth-relatedlegislation.


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Scotland

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ScotlandFirstdrinkdrivingandnowminimumunitpricing,whyisScotlandatestbedforUKlegislation?

Tostatetheblindinglyobvious,Scotlandisadifferentcountry,andbecauseofthatfact,isoftenthetest-bedforlegislativechange.ItsmarketstructureandpatternsofconsumerdemandandbehaviourhavealsobeendifferenttotherestofGreatBritain.

Scotland’smeanhouseholddisposableincomeisaround5%lowerthaninEngland,butmanyofScotland’skeydifferencesderivefromitsdemographyandgeography.Ruralareas,asdefinedbytheScottishGovernment,accountfor98%ofitslandmass,butnearlyafifthofthepopulation.Consequentlythecountry’spopulationdensity,reportedinthe2011Census,at0.7personsperhectare,isfarlowerthanthe3.7perhectareapplyinginEnglandandWales.

Notonlyisthepopulationspreadmorethinlybutcarownershipisalsolowernorthoftheborder–inthe2011Census,31%ofhouseholdsinScotlandhadnocar,comparedto26%inEnglandandWales.

Historically,agreaterproportionofalcoholvolumesalesinScotlandgothroughtheOffTrade,comparedtoEnglandandWales.AccordingtoCGA,60%ofvolumeinScotlandintheyeartomid-2017wentthroughthetakehometrade,comparedto52%inEnglandandWales.

MeanwhilethepubmarketinScotlandhasbeencharacterisedbyarolloutofnew-buildlarge-scalefoodpubsinrecentyears,whichmaybestimulatingeatingoutdemandincertainlocalities.Fromitshistoricallylowbase,thenumberofbrandedfoodpubsinScotlandhasincreasedbymorethan30%overtheperiod,whilstthenumberofdrink-ledpubsandbarshasdecreased–asithassouthoftheborder.

Inadditiontothesestructuraldifferences,legislationaffectingourmarketalsohasadifferenthistoryinScotland.PubopeningtimeswereliberalisedinScotlandbeforetherestoftheUK,andthesmokingbaninenclosedplaceswasintroducedthereoneyearbeforetherestoftheUK–amoverecentlydescribedbyTheHeraldnewspaperas“acrusadeagainstarguablythemostnegativefactorinScottishpublichealth.”Then,inDecember2014,Scotlandloweredthedrink-drivelimitto50mgofalcoholin100mlofblood,comparedtothe80mglevelapplyinginEnglandandWales.

Thelawchangeinevitablyhadaneffectonconsumerbehaviour.CGA’sTradingIndexEPOSdataindicatesthatmanagedpubsinScotlandexperiencedadownturnindrinkssalesduring2015relativetotheircounterpartsintherestoftheUK.Theeffectwasparticularlyevidentforfood-ledpubs,whichtendtohavelargercatchmentareasandarethereforemoredependentoncar-bornecustom.

CGA’sBrandTrackconsumerresearchfromApril2017indicatesthattheproportionofadultswhosaytheydon’tgoouttodrink(inthe6monthspriortointerview)isslightlyhigherinScotland(26%)thaninEnglandandWales(24%).Scotlandalsohasasmallerproportionofadults(21%)whosaytheydrinkalcoholoutofhomefrequently(atleastthreetimesaweek),comparedtoEnglandandWales(28%).

Thisdataalsoshowsthatcomparedtojustbeforetheimpositionofthelowerdrink-drivelimit,theclaimedfrequencyofgoingoutforadrinkhaschangedlittleinScotland.Intermsofeatingout,liketherestofGreatBritain,ithasseenanincreaseintheproportionofadultswhoclaimtoeatoutfrequently(atleastweekly)overtheinterveningperiod.Butwheretheychoosetospendtheirmoneyoutofhomemayhavechanged.

TheScottishGovernmentsaysthatalthoughpercapitaalcoholconsumptionhasbeenreducingsince2008,salesofalcoholperadultperweekare17%greaterthaninEnglandandWales.Itsaverageconsumptionlevelequatestomorethantheofficial14unitweeklydrinkingguideline,“largelyduetomorealcoholbeingsoldatlowerpricesintheoff-tradeinScotland”withhigherspiritssalesaparticularfeature.[12]


INDEXED AVERAGE WEEKLY SALES – CGA TRADING INDEX

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References:

[1]www.ofcom.org.uk/research-and-data/multi-sector-research/cmr/cmr-2017[2]www.ukfinance.org.uk/statistics/cards/[3]www.ons.gov.uk/peoplepopulationandcommunity/householdcharacteristics/homeinternetandsocialmediausage/bulletins/internetaccesshouseholdsandindividuals/2017

[4]uk.kantar.com/consumer/shoppers/2016/consumers-on-health/[5]www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/healthandlifeexpectancies/bulletins/adultsmokinghabitsingreatbritain/2016[6]data.oecd.org/healthrisk/alcohol-consumption.htm[7]www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/drugusealcoholandsmoking/datasets/adultdrinkinghabits[8]www.gov.uk/government/statistics/reported-road-casualties-in-great-britain-accidents-involving-illegal-alcohol-levels-2015-final[9]www.gov.uk/government/statistics/statistics-on-obesity-physical-activity-and-diet-england-2017[10]www.gov.uk/government/statistics/family-food-2015[11]www.gov.uk/government/statistical-data-sets/family-food-datasets[12]www.healthscotland.scot/publications/mesas-monitoring-report-2017[13]www.scotpho.org.uk/clinical-risk-factors/obesity/key-points

Ithasstatedmorerecentlythat“asanationourrelationshipwithalcoholhasbecomeunbalanced”,althoughthisisclearlylinkedtosocio-economicfactors.Reportedalcohol-relatedmortalityratesforthoselivinginthemostdeprivedareasinScotlandarealmosteighttimestherateforthoseintheleastdeprivedareas.TheScottishGovernmentthereforeaimstopublisharefreshofitsAlcoholFrameworklaterin2017,arenewedplanto“changeScotland’srelationshipwithalcohol”.

However,itsfocusisjustaskeenonthenation’seatinghabitswhichitsays“arethesecondmajorcause,aftersmoking,ofpoorhealth.”Holyrood’sHealthCommitteehastalkedofan“obesogenicenvironmentinScotland”,whereunhealthyfoodis“moreavailableandmoreheavilypromotedthaninothercountries”.

PublichealthdatainScotlandshowthatin2015,65%ofadultsweredefinedasoverweight,including29%whowereobese.Thiscomparesunfavourablytotheto27%obesityratereportedbyNHSEngland,anditsobesitylevelsareamongthehighestoftheOECDcountries.[13]

Aswithalcohol-relatedriskfactors,datainScotlandalsoshowslowersocio-economicstatusisassociatedwithhigherlevelsofobesity.21%ofwomenlivinginmoreaffluentareasareobese;thiscomparesto37%ofwomenlivingindeprivedareas.RatesofchildhoodobesityinScotlandaresimilarlyshowntorelatetodeprivationlevels.

InadditiontoitsplanstorefreshitsAlcoholFramework,theSNPadministration’scurrentplansincludeanewanti-obesitystrategy.Initiativesunderconsiderationwillreportedlyincludemeasures torestricttheadvertisingandpromotionoffattyandsugaryfoodanddrink.

MeanwhileFoodStandardsScotlandarguesthatupto40%ofScotswillbeobeseby2030withouteffectiveaction,lobbyingfora‘caloriecap’oneatingout,astepfurtherthanthescopeofthe‘sugartax’onsoftdrinks.Inadditiontotheprovisionofnutritionalinformationtoconsumers,itsuggeststhatcalorielimitscouldbesetforfoodeateninpubs,takeawaysandrestaurants.Itbelievesitsproposalwouldleadtoreductionsinfoodserviceportionsizes.

Acombinedcampaignonsugarandportionsizesintheoutofhomemarketcouldparticularlyfocusondesserts.Theimplicationforpuboperatorsisnotinsignificant.InScotland,littledifferenttoEnglandandWales,CGA’sTradingIndexdatashowdessertsaccountforalmost10%offoodsalesinmanagedfood-ledpubs,whereover1mainmealin4isaccompaniedbyadessert.

Ultimately,whilstthefoodanddrinkindustryisaneasilyidentifiedtargetforpublichealthinitiatives,theevidencehereconsistentlyindicatesthecriticalroleofpubliceducationinhelpingtoencouragehealthierlifestylechoices,particularlyamongthelessaffluentgroups.Thisisanactivitywheretheindustryanditsrepresentativescanclearlycontinuetotakeanimportantparticipatoryrole.


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INDEXED AVERAGE WEEKLY SALES – CGA TRADING INDEX

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UK Market Snapshot

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14

LIKE FOR LIKE SALES OCTOBER 2017 FIGURES

TOTAL YoY: 2.4%L4L YoY: 0.1%

TOTAL YoY: 4.7%L4L YoY: 0.4%

Market Snapshot


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16

Category Insight

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Brexit and the looming recruitment crisisFreemovementoflabourwithintheEuropeansinglemarket,andhistoricallyeasyaccesstolabourfromcountriesoutsidetheEU,hasbeenahugelyimportantfactorintheexpansionofhospitalitybusinessesacrossthepiste,andacrossthecountry.OnanypredictionofhowBrexitwillpanout,recruitmentisabouttogetawholelotmoredifficult,aspoliticiansinterprettheBrexitvoteasavotetoendfreemovementofpeople,toreducenetmigration.Crucialtoourabilitytoweanourselvesoffforeignlabourwillbethetimescale,andanytransitionalarrangementsthatgovernmentmayagreewiththeEU.

Consider the following statistics:• Thereareapproximatelyfivemillionnon-Britishnationals workingintheUK,accountingfor16%oftheworkforce.

• Acrosshospitalityandtourism,24%oftheworkforceismadeupofnon-Britishnationals,with55%ofthosecomingfromoutsidetheEUandwhereimmigrationcontrolsarealreadyinforce,and45%fromotherEUcountrieswheretherearecurrentlynorestrictionsontherighttoworkorliveintheUK.

• InLondon,non-Britishnationalsmakeup64%ofthehospitalityandtourismworkforce,ofwhich46%comesfromotherEUcountries.

(Source: Labour force survey and ONS)

Inthelicensedmultipleretailers’sectortherelianceonforeignlabourisevengreater.Bywayofillustration,oneALMRmember’sworkforcebreaksdownasfollows:

Thecontextforthisgrowingrelianceonmigrantlabourisa13%increaseintheoverallhospitalityandtourismworkforcebetween2011and2015.Furthermore,itisestimatedthatbetween2014and2024thehospitalityandtourismsectorswillneedtorecruit1.3millionworkers.Currentlyaquarterofbusinessesinthesesectorshavevacanciesofwhichsome38%areconsidered‘hardtofill’.

Butthemosttellingstatistic,intermsofwhatemployersneedtodo,isthatofthe1.3millionextraworkersrequiredbyhospitalitysectorbusinessesby2024,75%ofthemaretoreplaceexistingstaff.So,reducingstaffchurnandretainingworkersiskeytoavoidingarecruitmentcrisis.

Manyhospitalitybusinessesarenowrethinkingtheirpeoplestrategiesbyplacinggreateremphasisonstaffengagement,increasedretentionandimprovedperformance.InnovativemeansforrecruitingmoreBritishnationalsarealsonowbeingconsidered.

Forexample,recruitingolderworkersorthosewhohaveretiredfromtheworkforceorareabouttoretire.Consideringbreakingdownfull-timejobsintopart-timeonestoattractworkerswithchildcareresponsibilitiesforwhomfull-timeworkisn’tfeasible.Creatingcareerpathwaysandinvestinginthetrainingofstaffatalllevelsisproventoreducestaffchurnandimproveretention.

EmployersarefeelingthecostpressuresheapedonthembygovernmentandsoitiscrucialthattheygetvalueformoneyfromthingslikethenewapprenticeshiplevyandthecostsinvolvedincheckingthatallworkershavearighttoworkintheUK.Wecanhelpemployersmaximisethevaluetheygetfromwhatisessentiallyapayrolltax,bymappingtheirexistingtrainingagainstthenewapprenticeshipstandards.TheCPLTrainingGroupisworkingwithALMRonatrainingpackagethatwillcombineachievementofrelevantapprenticeshipstandardswithgainingnationallyrecognisedqualificationsinawaythatwillmaketrainingandqualificationsmuchmoreportable,andofferrealvaluetoemployersandyoungpeopleseekingacareerinlicensedretailandhospitality.Wealsoofferaservicecalled‘PeopleSearch’thatisacost-effectivewayofcheckingdocumentationthatindicatesaperson’srighttoworkintheUK.

Transitional arrangementsIsuspectthatatransitionalarrangementonleavingtheEUmaylooksomethinglikethe‘Norwegianmodel’.Thisisan‘off-the-shelf’Brexitpackage,basedontherelationshipthatNorwayhaswiththeEU.Itsmainelementsareasfollows:wewouldhavetariff-freeaccesstothesinglemarketforourgoodsandservices,butnotbepartofEUpoliticalinstitutionsorsubjectto‘evercloserunion’,orpressuredintojoiningthesinglecurrency.Wewouldnotbepartofthecommonagriculturalpolicyorthecommonfisheriespolicy,sowouldregaincontrolofourterritorialwaters.WewouldstillpayintotheEU’sbudget,butprobablyatabouthalfthecurrentrate.WewouldnotbepartoftheCustomsUnion,andthereforewe’dbefreetostrikeourowntradedealswiththerestoftheworld.

So,what’snottolike?Crucially,thepricetobepaidforaccesstothesinglemarketwouldbemorethanjustfinancial.WewouldhavetoabidebyEUtradelawsandbesubjecttoECJjudgments,andwewouldhavetoagreetofreemovementofpeople,subjectonlytoatemporarybreakclauseifimmigrationwascausinganacutesocialoreconomicproblem.Beingrule-takers,butnotrule-makerswouldmeanthatwewouldhavenoinfluenceoverhowfreetradewithinthesinglemarketmightdevelop.

ThepointsabouttheECJ’sjurisdictionandfreemovementofpeoplearetherealstickingpoints.Isuspectthatthiswillbesoldtousasatransitionalarrangementwiththefinalshapeoftheleavedeal,includingfreemovementofpeople,tobedeterminedfurtherdowntheline.Whatiscrucialisthatweavoidacliffedge,intermsofrestrictingaccesstoEUlabour.Withtheunemploymentclaimantcountnowdownto4.5%thereisnoobviouspooloflabourthatoursectorcanaccesstofillthegaps.

Paul Chase, Director and Head of UK Compliance, CPL Training

NATIONALITY NUMBERS PERCENTAGE

BRITISH 127 40%

EUROPEAN UNION 116 37%

AUSTRALIAN 46 14%

NEW ZEALAND 7 2%

OTHERS 21 7%

TOTAL 317 100%


Recruitment & Retention in Post Brexit Britain

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Macro Market Shape and SizeOverthelastfewyears,thechangeinconsumerhabitshasseenconsumptionofalcoholreducingandmovingtoconsumptionathome.However,theontraderemainsavibrantmarketplace.Almost25millionhlofalcoholicbeveragesareconsumedinthechanneleveryyear.Therevenuethisbringstopubsandbarsisincreasing(+1%),despiteaslightdeclineinvolumeinthelastyear(-2%),asconsumersgotomorepremiumoutletsandchoosehigherpriceddrinks.Longalcoholicdrinksholdthelion’sshareofthiswith90%ofthevolumeheldwithinbeerandcider.Thereareseveralconsumertrendsinplaydrivingpremiumisation;consumersbuyingintomorepremiumsegmentsaswellastradingupintheirexistingcategorychoices.

LagerThebigstandardlagers,suchasFoster’s,accountfor55%oflagervolume.Thesebrands,alongwithbrandslikeKronenbourg1664,remainthebiggestinthemarket,yetrecentlymorepremiumbrands,suchasAmstelandBirraMoretti,aswellascraftbrands,havetakenabiggershareofconsumerattentionandspend.Theconsumerappealforthoseclassicbrandsremainsstrong,asshownbytheirhugeandsteadythroughputlevels.Outletshaveseenthataddinginamorepremium4%brandisagreatwaytodriverevenue,whichiswhywe’veseensuchgrowthforAmstel(+24%inthelastyear),whichsellsforonaverage60p/pintmorethanclassiclager.Anyconsumerwhodoestradeup,thereforeallowslicensestoringmoremoneythroughthetill.Thepremiumbrandsinthe5%ABVsegmentarealsoperformingwell,withbrandsgrowingaheadofthemarket,includingHeineken®(+8%).ConsumersarelookingforsomethingnewandbrandslikeBirraMorettiarealsoseeinghugegrowth.

Theboomingcraftbeersegment,whilestillrelativelysmall,isthelatesttrendthateveryoneistalkingabout.Consumersarelookingforsomethingnew,differentandspecial,asseenintheriseofboutiquegindistilleriesandartisanalcoffeeshops.AcrosstheUK,consumersarelookingtodiscovernewthingsandengaginginmorelocal,craftedproducts.Therefore,wenowseethenumberofontradeoutletsrangingcraftbeerhasjumpedtomorethantwoinfiveoutletstoday,fromonlyoneinfivein2015.

Thecraftbeercategoryismaturingandspecificsegmentsareemerging,withthemajorityofconsumerschoosingfromafewbroadlyaccessiblebeerstyles,suchaslagers,palealesandIPAs.Thecraftconsumerishugelyexperimentalwitharepertoireofbrands,almosttwicethesizeofanon-craftdrinkingcounterpart.Formostconsumers,craftsitssimplyaspartofarepertoirewhichalsoincludesmanymainstreambrands.

CiderTheCidercategoryisseeingstronggrowth,primarilycomingfromdraughtcider(+4%).Thisgrowthisdrivenbyflavoureddraught,withStrongbowDarkFruitnowthesecondbiggestdraughtciderandstillgrowingatanincrediblerate(+57%).It’scrucialthatlicenseesrecognisethepointofdifferencebetweenflavouredciderandapplecider,andtakeadvantageofit.Consumersseeflavouredciderasfundamentallydifferenttoapplecider,meaningvolumegainedfromtheflavouredsegmentdoesnotequatetoalowervolumeofapplecidersold.Infact,ourresearchsuggestsonlyaroundathirdofflavouredcidervolumeisfromconsumersswitchingawayfromexistingranges.Therefore,addingaflavoureddraughtontoabarisaclearwaytodriveoverallcidervolumes.Outsideofthis,whilstthereisatrendtowardspremiumisationandmorepointofdifference,StrongbowOriginalremainstheUK’sfavouritecider.

Macro Market Shape and Size


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The on trade LandscapeThebiggestchangeinrecentyearshasbeentheblurringoftargetsforoutlets.Inthepast,manyoutletswouldbekeentowinforspecificoccasionsandconsumerswouldstarttheirFridaynightoutinonebar,beforegoingontodifferentplacesasthenightprogressed.Nowasthemarkethasbecomeevermorecompetitive,itiskeyformanyoutletstobeasdiverseaspossible,toberelevantatmorepointsthroughoutthedayandtomaximisedwelltime.Foodcontinuestobeahugedriverforgoingout,thereforeimprovingthemenusisamustforoutletslookingtocaterforavarietyofcustomers.

Thehugeincreaseinnewwave‘casualdining’venues,particularlyinmetropolitanareas,issignificantandcapturingconsumerswhoarefocusedonfood–challengingbothrestaurantsandpubdining.Thismarkethasbeengrowingforsometimeandnowwemaybeseeingthesignsofcasualdiningreachingaplateau,withconsumersnowhavingmoreoptionsthantheyneed.Competitionisnowsofierceinmanyareasthat,justaswithothersegments,outletsneedtogiveconsumersapointofdifferencefromothercasualdiningoptions.

Looking ForwardThechallengingmarketplace,reducingalcoholconsumptionandmovementofdrinkingoccasionstotheofftradewillmakeitatoughforoutletsfortheforeseeablefuture.However,aswiththepastfewyearsoftherecession,astrongbusinessplan,knowledgeablestaffandaclearpropositionarekeytosuccess.Outletswillneedtocontinueworkinghardtogetconsumerscominginandshouldkeeplookingatwaystocreatereasonstovisittheirbar,whetherthat’seventsuchasshowingfootballonChampionsLeaguenightsorsimplydeliveringgreatservicetotheircommunity.

Deliveringqualityineverything,fromservice,foodanddrinkrange,aswellastheoutlet’satmosphere,isalsohugelyimportant.Researchsuggeststhatconsumersspendonaverage10%moreonvisitswhentheyratetheserviceas‘verygood’.Equally,consumerswhoratetheatmosphereas‘verygood’arethreetimesaslikelytofeeltheygotvalueformoneyfromavisitandthosewhofeeltheygetvalueformoneyare2.4timesmorelikelytocomeback.Deliveringgreatservicebringspeoplebackthroughthedoor!

In25years,theontradewillbevastlydifferenttotoday,butitwillstillbefocusedaroundthehumanneedtomeetup,catchupandgetridofthestressofmodernlife.Beer,cider,spiritsandwinewillstillbetheoilinthesocialwheelsoflifewhich,inmanyways,willfeeljustthesameastoday.

Source: CGA Strategy 17th June 2017, Kantar Alcovision

Andy Wingate, On-trade Category Controller, Heineken


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1. Sweat your assetsThedatacollectedfromourWirelessSocialserviceenablescompaniestoreallyunderstandtheircustomers,aswellasgivingthemtheabilitytocreateentirelypersonalisedcommunicationsandonlytalktocustomersabouttheirinterests.Dataadvancesmeanthatoperatorsnowhavenoexcuseforsendingoutcontentthatisnotadaptedtocustomers’owninterests.It’simportantthatoperatorsmakethemostofthisinformationtohelpkeepcustomersloyal.

2. Look outside for inspirationTherearemultiplebrandsacrossourindustrydoinggreatthings,butinspirationcancomefromfurtherafieldtoo.

Outsideofthehospitalitysector,brandssuchasJohnLewis,Genting,Virgin,AmazonandeBayaredoinggreatwork.Eachofthesebrandsarelivingtheirbrandvaluepropositionandusingwhattheylearnabouttheircustomerstodeliverexcellentservicethroughtheiremailmarketingcommunications.

Emailmarketingischanging.Thosewhoaredoingitwellareachievingamazingresults,butmanyaregivingupbecauseofdecliningopenrates.Theanswerliesintailoringthecommunicationsbyutilisingthedatacollectedandtargetingcustomersonapersonallevel.

3. Be prepared and be transparentOperatorsneedtobeopenandhonestabouttheirguestdatause.Onthewhole,guestshavenoissuewithafavouritevenueoftheirsusingtheirprofiletosendtimelyandpersonalisedmessages.Whatpeopledon’tlikeisbeinghoodwinkedintoprovidingtheirpersonalinformation,onlytobeemailedaboutoffersthatareirrelevanttothem,fromadatabasetheybelievetheyneversigneduptointhefirstplace.

GeneralDataProtectionRegulation(GDPR)isdesignedtopreventthisfromhappening.FromMay2018,companieswillneedtobeupfrontaboutthedatathey’recollectingandhowtheyintendtomakeuseofthatdatatoavoidsubstantialfinesoranylegalactionagainstthem.Asanewrule,guestswillalsohavetheabilitytoeditdatathatisheldaboutthem.

WethinkGDPRoffersanamazingopportunityforthoseoperatorswhocommunicateeffectivelytotheircustomers.Consumerswillbereceivinglessspam,makingthemfarmorereceptivetobrandsthey’veoptedintoreceivingcommunicationsfrom.

4. Roll with the timesReliable,fastWi-Fiisnowaminimumexpectation;ourfocusshouldnowbeonhowoperatorsinvestandutilisetheirWi-Fi.WhilesomevenuesputguestWi-Fiatthebottomoftheprioritypile,thosethatareupgradingtheirnetworksareseeinghowimportantitistotheoverallguestexperience.

AsurveybymarketingfirmPurple,lastyear,reportsthat60%ofdinerswouldbemoreloyaltoarestaurantifithadaccesstotheinternet.Acoupleofyearsago,BierkellermadeagreatdecisiontoinvestintheirWi-Fiandtheusagewentupfour-fold.Thisshowsthatinvestingintechnologyreapsbenefits.

ProvidingpoorWi-Fiisworsethanprovidingnoneatall!

5. Digital communities are now just as important Withsocialmediarolling24hoursaday,restaurants,pubs,cafésandoutofhomespacesmustbeabletorivaltheWi-Fithatpeoplearegettingathome.Theprovisionfortheindividualtobeconnectedtotheirfriendsandfamilyoutsideofthevenueisjustasimportantassomeone‘Instagramming’yourpicturesqueflatwhiteorplateoffood.

Asanoperatororserviceprovider,it’sourjobtogivethecustomerswhattheywant,andifthat’sWi-Fiwithinvenues,that’swhattheymustprovide.


Wireless Social InterviewThe power of personalised communications WehearfromWirelessSocialmanagingdirectorJulianRosswhotalksutilisingyourWi-Finetwork,thekeytopersonalisingcommunicationsandfuturetrendsinthehospitalitysector.

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6. Don’t just target based on ageCommunicatingtopeoplebasedontheirageplaysapartinprofilingyourcustomersbut,ageisn’ttheonlyfactor,it’saboutuniqueidentity–thecloseryougettotherightmessage(attherighttime,ontherightplatform)themoresuccessfulyouwillbe.

Thisissomethingweareabletoassistoperatorswithbygivingthemtheabilitytosegmenttheircollecteddatabyhobbiesandinterests.Withthatinformation,thebrandcanthensendcompletelypersonalisedcommunicationstoensurecustomersonlyreceiveinformationtheywanttosee.

7. Think outside the boxDataisusefulformuchmorethansimplyactingasamarketingsupporttool.AnideathatwearelookingintoistheWi-FiWatchSchemewhereby,usingWirelessSocial,operatorsmaybeabletoofferevidencetoanycrimethatmayhavetakenplaceontheirpremises.WirelessSocialallowsoperatorstoseewhowasintheirvenueandwhen,throughinformationprovidedbyourdashboard.

Thevenueor,insomecircumstances,thepolicecouldthencommunicatedirectlywithgueststoestablishwhat’shappenedandseekwitnesseswithoutthemhavingtocomeforwardinfrontoftheirpeergroup.Itcouldhelptoidentifyaperpetratordirectly,knownoffendersorpeoplewhohavebeenbarredfromaparticularvenuewhentheyattempttore-enter.

Howeveritwouldrequirecollaborationtogetsuchaschemeofftheground;notonlywouldoperatorsneedto‘optin’,butguestswouldneedtobeofferedanexplicit‘optin’buttontoregistertheiragreementtobeingpartofsuchascheme.Thismaybeonefor thefuture.

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CGAisthedataandresearchconsultancyofchoicefortheoutofhomefoodanddrinksmarket,specialisinginmarketmeasurement,consumerresearchandlocationplanning.WhatsetsCGAapartisitsuniqueabilitytoaccessthethreekeytypesofdata(supply,demandandconsumer)andthentriangulatethisdatatoprovidethemostcompleteandaccuratepictureofanyoneintheoutofhomesector.

FromitsofficesinManchester,UnitedKingdom,andChicago,UnitedStates,CGAexpertsworkwithmanyoftheworld’sbiggestconsumerbrands,includingdrinksmanufacturers,consumerbrandowners,foodsuppliersandwholesalersaswellaspub,barandrestaurantretailersandgovernmententities.

Foundedin1985,CGA’smissionistouseitsphenomenaldataandexpertinsightoftheleisureindustrytogivethesebrandsthecompetitiveedge,andgetthemwheretheywanttobe,faster.

TheALMRisthebiggest,mosteffectivenetworkandcollectivevoicefortheeatinganddrinkingoutsector. TheALMRproducesarangeofstatisticalreleasesprovidingauthoritativedataontheUK’slicensedretailsector.TheALMRalsoproducesthebiannualFutureShockreportchartingemergingtrendsanddevelopmentsacrossthewholeoftheeatinganddrinking-outmarkets.

Please contact CGA for questions relating to research and content:T:01614768330E:[email protected]:www.cga.co.ukFollowusontwitter:@CGA_insights

Please contact ALMR for membership or contributing to future reports:T:+44(0)2085792080E:[email protected]:www.almr.org.ukFollowusinTwitter:@ALMRInfo


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Documents

Future Shock - CGA€¦ · ALMRGA & C Future Shock Report - Issue Three 4. The ALMR has always grown with the industry it serves. Our sector has been transformed in the 25 years since