This week: PROOF – Wine Premiumisation; Real living wage rise; Bumper English wine harvest
Pub profits boosted by premiumisation strategies
This week, Fuller’s Chief Executive stated that its pubs are faring well despite the cost-of-living crisis as they attract more affluent customers. Despite rising inflation, he revealed that the pub group is seeing premiumisation across the estate, with their most premium products seeing the fastest growth. This trend is reflective of consumers wanting to enjoy good quality drinks on the occasions they choose to go out.
When it comes to wine, recent research from PROOF Insight highlighted the importance of including premium wines on the list. As the category experiences falling demand across the on-trade, with current volumes sitting at 74% of what they were four years ago, premium wines can provide that necessary boost in profits. Given that wine drinkers are typically more affluent and 77% of them are inclined to treat themselves to an expensive wine now and then, they are prepared to spend more for quality.
One particular pub group illustrated this; it added premium wines to a select number of sites and subsequently saw the volume mix shift towards the more premium end. As a result, these sites generated higher profits than the other sites.
While having a value offering is important to help consumers manage their costs, it is equally important to have premium products for those consumers looking to treat themselves particularly when it comes to wine drinkers.
Sources: PROOF Insight, The Morning Advertiser, PROOF Insight Consumer Research October 2023
Almost half a million workers receive a 10% pay rise
Workers on the Real Living Wage have received a 10% pay rise today. About 14,000 firms are signed up to the voluntary scheme, with a textiles manufacturer stating it had driven a 60% reduction in staff turnover. The scheme may be financially unviable for some hospitality firms, with Fuller’s boss Simon Emeny warning that high business rates could lead to more pub closures. To date, the pub sector has been better protected from closures, contracting -2.0% in the year to September, versus -3.6% for total licensed premises.
Sources: BBC News, Morning Advertiser, OUTLET 12 months to June 2023
Bumper harvest for English wine following strong growing conditions
For English wine, the growing season in 2022 was warm, allowing vines to maintain strong health following the winter. The flowering period also saw good weather, producing a large yield of fruit. The second half of summer saw cooler weather, slowing the ripening process and allowing complex flavours and aromas to develop. These conditions, alongside additional vine planting across their estate, has allowed Gusbourne to record their largest ever crop, with similar announcements from Ridgeview and Nyetimber.
Strange brews & news
All in good spirits, UK’s paranormal pubs!
UK’s pubs have seen their share of spooky goings on. Take The Red Lion Public House in Avebury, Wiltshire where there have been reports of a ghostly carriage, drawn by phantom horses in the inn’s courtyard. Then there is The Black Bear Inn in Tewksbury, Gloucestershire, home to an apparition of a headless man wearing an army uniform and dragging a chain through the corridors. Fancy a paranormal pint? A quick search will reveal your local haunt.
Sources: haunted-britain.com, hauntedrooms.com, Historic England: Licence to Chill: 10 of England’s most haunted pubs
Investments, acquisition & openings
- AG Barr acquires soft drinks brand Rio for £12.3 million
- Fenwick has opened a fourth site under its Fuego tapas concept in Kingston, South-West London
- The Real Greek will open sites in Braintree and Sheffield
- Red Oak Taverns will purchase 17 leased pubs from St Austell Brewery in Cornwall, Devon and Somerset
- Boca a Boca, the Ukrainian-born Spanish concept, will open a site in London’s Fitzrovia
- Azzurri Group will open an ASK Italian site in Merry Hill shopping centre, Dudley
- Chi, the Asian street food concept, has opened a new site in Derby
- A luxury Chinese restaurant and karaoke venue will open at the Merrion Centre in Leeds next week
- Caravan, the restaurant, bar and coffee concept, will open a new site in London’s Covent Garden
- Burnt Faith, the UK’s first brandy distillery, has opened the Brandy House Bar in London
- Sommellier Honey Spencer and partner Charlie Sims will open Sune, a neighbourhood restaurant on Broadway market in November
- Amber Beverage Group has announced an investment of $37m to build a new Walsh Whiskey distillery
Sources: Propel, The Times
Product launches & campaigns
- Soho Street Cocktails and Prezzo have released two ready-to-pour cocktails in their restaurants: Spiced Apple and Pear Martini and Morello Cherry Sour
- Bud Light will return as the official beer sponsor for the UFC (Ultimate Fighting Championship)
- Seedlip has partnered with actor Rege-Jean Page on their new campaign encouraging consumers to “choose different”
- The Scotch Malt Whisky Society has released a 40-year old whisky to celebrate their 40th anniversary
- 1800 Tequila has partnered with Mike Skinner, from the band The Streets, on a limited edition bottling designed to represent their new single
- Mossburn Distillers has released a 12-year-old blended malt aged in former Bourbon casks
- Bladnoch distillery has released a selection of peated whiskies
- Laphroaig has released Elements 1.0, a new whisky made using Islay malt
- Floyd Mayweather Jr, the former champion boxer, has released a Canadian whisky called “The Good Money Whisky”
- BrewDog has applied for a trademark covering brandy, suggesting a potential move into the category
Sources: Spirits Business, Drinks Industry