Drinks trends

Drinks Trends: what was big in 2016 and what is to come

By Nikkie Sutton

- Last updated on GMT

Champions: Spoken in Devon won Best Spirits Pub/Bar at the Great British Pub Awards
Champions: Spoken in Devon won Best Spirits Pub/Bar at the Great British Pub Awards

Related tags Craft beer Alcoholic beverage Rum

We all know that gin and craft beer are the big movers and shakers in drinks trends right now. But what else is making the ground move for licensees, and what’s around the corner?

Craft beer​ is a bandwagon brewers and consumers are jumping on, with a third of on-trade outlets now stocking some sort of craft beer product. But it’s not just beer and it’s not just craft – consumers want there to be some sort of story behind pretty much whatever they drink. A trend we’ve seen in the inaugural Drinks List: Top 100 Brands.

More than a third of craft beer consumers are Millennials​, which shows how important the 18 to 35-year-old market is to the category.

CGA Strategy client director Phil Montgomery says: “Millennials are key to the trade because they go out more and spend more than the average consumer, so by capturing that key group in the on-trade, the category has flourished.

“It plays into the trends we are seeing in the drinks category [as a whole] in terms of heritage and provenance, so consumers are getting that unique experience with craft beer.”

Craft beer has grown into 6,000 more outlets over the past year (to a total of about 42,000), which Montgomery puts down to new openings in the market place such as specialised craft beer bars.

Coming second in the stand-out trends of the year is fruit cider​, which Montgomery says is thanks to choice and availability for consumers.

The moving annual total (MAT) for fruit cider has reached 38% in year-on-year volume growth and is continuing to increase that figure.

The rise and rise of gin

Availability and choice are a constant theme throughout the drinks category as consumers now have an average of 12.2 brands in their repertoire and 84% of drinkers are likely to try new products.

In the past five years, gin​ has seen a huge rise and Montgomery says there is room for it to grow even further.

He adds: “From our London Influencers report, gin cocktails are still influential, particularly in top-end outlets and that is where the trends permeate down.

“From this we see that there is a 60:40 split towards non-premium against premium and this gap will be bridged as we move forward.”

Spoken in Exmouth took home Best Spirits Pub/Bar at this year’s Great British Pub Awards and owner George Nightingale tells The Morning Advertiser​ (MA​) that gin continues to be at the top of its game.

“The mass market likes the flavours but if you are looking at being a niche product, it will come down to ingredients rather than adding a flavour to it,” he claims. “Anyone can add a flavour in, but if you are distilling it, you are getting quality ingredients.”

Nightingale predicts the future trend in spirits could see the gin bubble burst. He adds: “Everyone expects the next trend to be rum, but we are seeing a big growth in whiskies.

“People are becoming a lot more open-minded towards different and unusual brands, however, we are getting more young men drinking gin & tonic and gin & bitter lemon, which is really interesting – the demographics of who is drinking what is changing.”

But it’s not just gin that’s riding a wave. “Gin is up there, but we have started getting consumers drinking more bottled beers now,” says Nightingale.

Sticking with the spirits theme, volume sales of rum​ in the UK on-trade are growing at 7% year on year and the versatility of the spirit is capturing consumers’ imagination as drinkers discover the possibilities of what it can go with.

Pernod Ricard UK on-trade channel director Ian Peart told MA in September there were many ways pubs could work with rum. He said: “You can drink rum neat, mixed and in cocktails. Even at Christmas we’re doing a Havana Club buttered rum. So alongside the mulled wine, operators serve at Christmas, we’re doing a different take.”

Tracy Clarke runs two wet-led Punch pubs – the Kings Arms in Billingshurst, West Sussex, and the Cricketers in Badshot Lea, Surrey, with her partner Martin Stacey, and says rum will be the next big trend in the trade.

She explains: “It started taking off last year, and with the different spiced varieties, consumers will start moving towards the rum category. “We have a rum shelf housing different variants of the spirit from Bacardi to Havana, Morgan Spiced Rum, two flavours of Pusser’s Rum Gun Powder Proof, Kraken and Lamb’s Navy Rum.

“Our cash and carry is bringing in different flavours of white, dark and spiced. There is more of a variety now than there ever was.”

However, consumers can be tricky to judge when it comes to predicting what they will make the next big drinks trend, she maintains.

“People’s tastes change; they go from one drink to another. Vodka will still be a big hit no matter where you go because it is so versatile. You can have it with a variety of options and shots always tend to be vodka based.

“Everywhere you go, there are differ-ent flavours: toffee, marshmallow, fruit-based, chilli, chocolate and everything in between. Ready-to-drink (RTDs) products are [mostly] vodka based so there will always be a market for it in any form.”

Beer forms a big part of both pubs’ offers as the demographic for the sites tends to be predominantly male.

Courage Best bitter is the most popular ale served and Clarke says they get through six barrels a week.

She adds: “It has a good taste that will never change, it has been tried and tested over the years and people stick with what they know.

“The older generation drink the ales but it has become noticeable that Millennials are changing their tastes and trying them now too.”

However, lager is the best-seller and, in particular, Foster’s, followed by Courage Best, Smirnoff vodka, Bacardi white rum and Captain Morgan Spiced Rum.

“We sell four pints of Foster's for every other beer. People will always drink beer, even if they only have a limited budget because it is a social thing,” Clarke says.

So it will be interesting for this licensee to see how well her drinks sales reflect what the Drinks List: Top 100 Brands shows are the best-selling drinks?

Wine popularity in growth

Further west, in Salcombe, Devon, the Victoria Inn’s best-selling product is also beer.

Looking into next year, licensee Tim Hore predicts beer sales will remain steady and says the pub has at least three ales on the bar at a time, but wine​ comes a close second in popularity.

He adds: “We sell 35 bottles of wine a day over the course of the year and offer more than 30 different bottles.

“It appeals to the clientele we have, as although we are a fairly big food pub, consumers don’t just drink it with food.”

CGA’s Montgomery advises operators to tap into the wine trend and says: “People are much more knowledgeable now, particularly about wine, which is helped by engagement with mass media.

“All the television programmes that are orientated around wine have helped debunk some of the myths around it, which helps licensees as they can stock a wider range and people are receptive to that.”

The St Austell-owned site’s fourth biggest seller is the soft drink category as a whole and Hore says customers particularly enjoy Frobishers Juices followed by spirits, with a special mention of gin.

He says: “We offer 25 different gins and there’s always new things coming out, but I don’t know whether this gin phenomenon will continue.

“It’s got to peak at some time because there’s new distilleries opening left, right and centre. However, it will keep going for a few years yet as there are still lots of flavours coming out, with lots of different botanicals.”

In contrast, CGA’s Montgomery predicts a different spirit will rise to the surface as a future trend and one that has more accompaniments than the traditional salt and lemon.

He says: “Tequila is the next drink that mixology is taking hold of and it is having a good result on the category.”

“Tequila, and particularly premium Tequila​, seems to be gaining more and more traction and that is something we will continue to see grow.”

The premium drinks category is now worth more to the on-trade than ever before, with a combined sales total for premium softs, long alcoholic drinks and spirits reaching £7.2bn in the past year (up to 11 June 2016), according to CGA.

This is up £719m year on year and equates to 29.5% of total long alcoholic drinks, softs and spirits sales.

Montgomery adds: “The broader narrative we have in spirits is premium-isation and premium Tequila has seen a 20% rise in terms of volume.

“It is tapping into that consumer experience, meaning they are willing to pay more to have it and that will feed into the wider macro scale we are seeing around cocktails too, which are up 14% in volume sales.

“The increase means brands have been able to create signature serves within their categories, which enables them to gain traction and accessibility to the consumer.

“The nature of cocktails is they contain many different elements and this helps operators to create an ingredient base.”

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