13 December 2012
The image of an ‘after-dinner drink’ has traditionally centred on the consumption of a fortified wine or liqueur in a serene restaurant setting.
The Digestif and its pre-meal equivalent the Aperitif have been viewed as staple offerings in restaurants since their inception in the 18th century. As a result, categories strongly associated with this phenomenon have seen a notable proportion of their overall volume confined to restaurants i.e. certain specialities and fortified wines like port and madeira.
Yet, as the on trade continually redefines its relationship with food, will the status quo of the Digestif or Aperitif come unstuck? Are wider macro on-trade trends altering the relationship between food and alcohol, with important consequences for the characteristics of the ‘after dinner drink’?
In truth, it is difficult to provide one all-encompassing answer. The variety and scope of the on trade means that elements of the market will react differently to the growing influence of food. The response of a larger on trade retailer may differ drastically from that of a single licensee in an independent outlet. Yet, it is crucial that licensees understand this trend and consider any potential consequences or opportunities it may create in the ‘after-dinner drinks’ category. In engaging with this trend, it is firstly important for licensees to understand how the growing power of food is affecting the trade.
In recent years, the provision of food has become an important tool for licensees across the on trade. The capacity for food to provide an additional revenue stream to a business, while also broadening the appeal of the outlet to a wider audience has driven this trend. As a result, accessibility to food, beyond the confines of simple ‘pub grub’, has increased across the trade, with consumers able to freely enjoy a ‘good meal’ outside the confines of a traditional restaurant setting.
The much publicised growth in café/wine bars and gastro pubs (37% of outlet openings in H2 2011 were café/wine bars*) has of course broadened the base of outlets providing cuisine for more discerning consumers, but across the trade, the quality of the food offering from licensees has improved.
In the face of this trend, the task for licensees appears to be matching their individual food offering with the most appropriate ‘after dinner drink’ selection. Admittedly, with this increased accessibility to food across the trade, the characteristics of ‘after-dinner drinks’ may begin to change with the associated categories shifting in importance.
Yet, some categories will retain their position in the ‘after-dinner drinks’ category. For example, liqueurs (both cream and non-cream) and speciality drinks retain a strong link with food. Certainly, the categories’ ability to achieve prominence on the bar through multiple brand listings in outlets helps to boost performance. However, more importantly, innovation is helping it to gain increasing traction with consumers. Innovations in serve are boosting the categories’ profile, while the development of new flavour profiles are providing taste experiences designed to complement a food occasion.
As the innovation in the category continues, liqueurs and specialities will continue to consolidate their position in the ‘after-dinner drinks’ category, which surely makes them an important stocking consideration for any licensee. The importance of the fortified wine and brandy categories (the traditional fare of after-dinner drinks) may also remain the same. Vermouth et. Al are engrained within the after-dinner drinks category. The perception of these categories with their digestive or palette-cleansing properties when accompanying a meal has forged a strong legacy.
Indeed, as the growing number of gastro pubs and café/wine bars increase the accessibility of consumers to fine-dining in the on trade, the importance of these traditional categories may actually increase.
Licensees in this area of the market must understand that traditional categories may still gain traction with consumers and restrain from the complete abandonment in the stocking of them in the face of more popularised stocking options. These ‘popularised stocking options’ have recently grown in significance in the trade and have occurred due to the premiumisation of categories. For example, gin, vodka and rum have all witnessed the consolidation of a premium sector of the market in their respective categories.
These emerging ‘premium’ categories have been stimulated by innovation in serve and the development of premium credentials that have cast relevant brands as ‘aspirational’. Popularisation of this trend has meant increased product listings for brands in these ‘premium’ categories across the entire on trade. Indeed, as our research shows, the fact that 1 in 10 outlets have added a premium gin to the bar over the last year is an indication of the scope of this trend.
For the consumer, this trend has meant that accessibility to these premium brands has improved and resulting in the wider consumption of premium spirits. (Volume- +5.7%**) The growth in premium drink’s categories allied to an increasing food provision may have important consequences for ‘after dinner drinks’. For the average licensee, far removed from the stereotypical restaurant setting, it is possible that the popularity of premium spirits may assuage them from stocking popular Digestif categories, which may limit performance. Thus, the redefinition of the ‘after-dinner drink’ may occur and licensees must be proactive in engaging with this trend when considering their stocking policy.
Understanding ‘after-dinner drinks’ in the context of the growing influence of food is an important task facing licensees in the GB on trade. Increasingly, the use of food, be it to generate an additional revenue stream or to attract different target consumers, has become widespread in the trade. The real challenge for licensees is how to leverage ‘after-dinner drinks’ in combination with a food provision to maximise returns.
Ultimately, success will depend on understanding what is best for the individual licensee. Liqueurs & specialities will continue to remain a staple of ‘after-dinner drinks’ in every outlet, while the vermouths and fortified wines may soon be confined to more traditional food-led outlets. Of course, the biggest decision involves the integration of premium spirits categories into a stocking portfolio. This decision may be dependent on outlet type or target consumer, but the favourable margin returns offered by premium spirits brands may draw many, whatever their position. The ‘after-dinner drinks’ category is evolving, but for licensees, evolution represents opportunity.
*CGA Outlet Index December 2011 **CGA Brand Index data to 7/7/2012
A version of this article first appeared within Essentially Catering in their November issue