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Capitalise on cocktails to increase margins

By Funkin Cocktails marketing director Ben Anderson

- Last updated on GMT

Funkin Cocktails shows cocktail opportunities for on-trade operators

Related tags: Cocktails

Funkin Cocktails’ marketing director Ben Anderson looks at CGA’s newly released mixed drinks report and considers the opportunities for on-trade venues.

Last week, CGA released its bi-annual drinks report with a depth of stats on consumer habits when it comes to mixed drinks and cocktails in the on-trade. We’ve taken the time to digest this invaluable resource and share the key insights and tips to help hospitality venues capitalise on cocktails ahead of the big summer trading occasion.

The cocktail sector has been on a meteoric rise in the UK in recent years, with the value of cocktails now reaching an incredible £664m in the on-trade, an all-time high and 8% higher than the pre-Covid levels of Q1 in 2020[1]​. This presents venues with an exciting opportunity to drive additional revenue and footfall.

However, introducing cocktails into your outlet can seem intimidating at first and there’s a common misconception that to serve cocktails you need to invest in swathes of training for your staff and a long list of bespoke ingredients and tools to create the serves. Funkin Cocktails is on a mission to dispel this myth, offering versatile cocktail solutions for all outlets to create consistent, bar-quality serves.

From award-winning RTD cans and bottles that offer delicious serves at simply the crack of a lid, to expertly crafted cocktail mixers, which just need a dash of spirit, to purees and syrups for making cocktails from scratch. Funkin Cocktails has done the hard work in bringing together the finest ingredients, making serving incredible cocktails in your venue easy. It also offers dehydrated garnishes to add a flash of elegance to your final serves.

Consumer Landscape

The report shows 62% of consumers believe it’s important for pubs to serve cocktails and 40% feel it’s very important. Plus, with cocktail drinkers typically spending almost £7 more per month on eating and drinking out compared to the average consumer[2]​, having a well-considered and well-promoted cocktail offering in your venue is extremely important, as a ready and high paying customer may opt for the bar over the road if they don’t see their favourite cocktails on your menu.

As we see just how widespread cocktails have become in the on-trade, a cocktail offering is fast becoming a necessity for venues that don’t want to risk being left behind by their competition. The number of outlets stocking cocktails in Q1 of 2022 has hit an all-time high of 44,576, eclipsing the previous high of 43,501 in 2020. This shows the sheer popularity and relevance of cocktails and means consumers have more options than ever before, making it key for venues to not just offer cocktails, but put some real thought into their range and how they can best cater for their target demographic.

As consumers increasingly feel the sting of the rise in the cost of living, perception of value will become increasingly important and should be factored into your ranging decisions. 57% of consumers buy cocktails ‘every time’ or ‘almost every time’ they are on promotion, with 92% taking advantage at least ‘sometimes’[3]​. Capitalise on this thirst for cocktails with promotions. 64% of consumers said they’re likely to make use of a 2-4-1 offer, and 48% a happy hour[4]​. This may feel like you’re short-changing yourself initially, but when you consider that Funkin Cocktails’ cocktail mixer range comes at an average cost per cocktail of £1.50 including the alcohol, the profit margins per drink are still significant and, if made and served well, you will have an opportunity to convert them into a regular customer.

The numbers for 2022 show the continued trend of younger consumers forming the bulk of visitors to the on trade, with 55% now aged between 18 and 34 – a 5% increase versus Q1 2020[5]​. Evidently, consumers in the 35-plus age bracket are a little more hesitant in venturing back out to venues in the volume they were pre-Covid. Ensure you’re catering for your full range of customers, with a tilt towards whichever age bracket best fits your main demographic, to guarantee you’re cashing in on that all-important cocktail profit margin. Younger consumers tend to prefer sweeter, fruiter drinks such as a Pornstar Martini or Sex on the Beach while older customers would typically opt for more classic serves such as a Margarita or Old Fashioned.

Cocktail Trends

The top 10 cocktails for 2022 (Based on share of serve)[6]​:

  1. Pornstar Martini – 15.4%
  2. Mojito – 7.2%
  3. Sex on the Beach – 7.1%
  4. Long Island Iced Tea – 6.5%
  5. Daiquiri – 6%
  6. Flavoured Martini – 5.6%
  7. Spritz – 5.3%
  8. Espresso Martini – 4.8%
  9. Pina Colada – 4.3%
  10. Woo Woo – 4.1%

Incredibly, the top 10 cocktails account for more than 66% of all cocktails drank in the on-trade[7]​, making them all-important for inclusion on your cocktail menu as consumers may refrain from splashing the cash if they can’t order their favourite.

The serves making popularity gains in the list are the Daquiri (up 0.5 percentage points (pp)), Woo Woo (up 1.3pp) and, most interestingly, Flavoured Martinis (up 3.9pp), while the nation's favourite, the Pornstar Martini, holds the top spot by some distance. These are all drinks on the sweeter end of the scale, reflecting the ever-younger typical cocktail drinker. The rise in popularity of Flavoured Martinis also helps to make sense of the drop in percentage seen for the Pornstar Martini, as consumers become increasingly interested in twists on the classics and opt for bespoke takes on the iconic serve.

Operators have an opportunity to cash in on the popularity of the Sex on the Beach and consumers' taste for experimentation by stocking Funkin Cocktails’ delicious new Peach on the Beach, a fresh twist on the classic recipe which is sure to be a hit with customers this summer.

Cocktails have taken a 0.7pp rise to an 8.2% share of total spirits market for Q1 2022[8]​, a new record and solidifying them as the top spirits category. This shows that cocktail serves are all important, with 38% of consumers posting photos of their cocktails and sharing on social media “every time” or “almost every time” they order them. This means you’re not just enjoying the additional revenue of a cocktail sale over other drinks choices, but also some free social media marketing to that customer's network, advertising your venue.

Visit​ now to find out more about Funkin Cocktails' effortlessly delicious products.

[1]​ CGA Mixed Drinks Q1 2020-2022

[2]​ CGA Mixed Drinks Q1 2020-2022

[3]​ CGA Mixed Drinks Q1 2022

[4]​ CGA Mixed Drinks Q1 2022

[5]​ CGA Mixed Drinks Q1 2020-2022

[6]​ CGA Mixed Drinks Q1 2022

[7]​ CGA Mixed Drinks Q1 2022

[8]​ CGA Mixed Drinks Q1 2022

Related topics: Spirits & Cocktails

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