Three Trends of the Post-Lockdown on Trade
By Andy Wingate, Senior Category Manager On Trade at HEINEKEN UK
Since lockdown and subsequently reopening were first announced, here at HEINEKEN we’ve conducted a number of pieces of research to best predict and help you prepare for the changes we expect to see in the on trade over the next few months. Using the latest insights and data from our Star Pubs & Bars estate, we are in a unique position as a supplier and an operator to provide a broader understanding and perspective of the current situation.
The outbreak of Covid-19 has resulted in the world talking consistently about the ‘new normal’. Naturally the big group occasions that we are used to seeing in the on trade are, have been reduced and now limited to groups of six, but other trends we anticipate will be an acceleration of previous behaviours.
Here are three trends to expect in the post-lockdown on trade and our recommendation on how best to prepare and adapt accordingly:
1. The highs and lows in footfall
Consumers have settled into lockdown life and living with Covid-19 in the midterm. But, as we move into a new phase, new anxieties are emerging. Firstly, the fear of a second wave is increasing (+8%) to 76%, as the resumption of normal activities increase.
The on trade is at a point where over half of its customers have now returned (55%), and this figure has increased by +10pp on the same period two weeks ago. The increase in consumers returning is steepest in areas which re-opened last, with the proportion of consumers returning to Scotland increasing by +15pp versus two weeks prior (49%). As we expect this percentage to steadily rise, there are still things you can be doing to reassure and encourage more customers into your outlet.
The latest data shows older customers remain the most concerned demographic and are more reluctant to visit the on trade. However, this is changing as 48% of over 55s have been out to the on trade, +14pp versus two weeks earlier. The most comfortable group are young men, who appear to feel less at risk and so have been quicker to return to previous behaviours. The difference between these demographics, in terms of intention to visit, is in fact increasing. Therefore, it’s crucial that operators can meet the needs of those who are visiting while at the same time reassuring those less comfortable to venture out.
Your offering – The current demographic split will have greater impact on products such as traditional Keg and Cask Ale, while venues such as Working Men’s Clubs and Community Pubs are likely to be more affected. Look at appealing to different customer groups during different day- or week-parts to help maintain footfall.
For example, consider running drinks promotions during quieter periods to encourage those customers not yet comfortable visiting during the evenings or weekends. We have previously been running Rhythm of the Week activities through our Star Pubs & Bars estate which generates footfall and loyalty with different consumer groups.
Recent data has also demonstrated weekday food occasions are down as much as 44% versus the same time last year. So, it’s worth considering changing your menus and prices to attract more customers at this time. For more information on this, check out the Keg Talks podcast – Navigating the new normal. HEINEKEN customers can also make use of POS Direct to professionally print both safe social distancing signage and footfall driving materials.
Your cleaning regime – When asked “What would make you more likely to visit the on trade?” respondents’ most popular answers were enforced social distancing, regular viral cleaning and staff wearing PPE.
In addition to displaying social distancing signage in your outlet, consider sharing these measures on social media, alongside images of people having a good time, enjoying your food and drink offering while following guidelines. Show that cleaning is being done regularly by having visible timesheets. Tick lists are commonplace in bathrooms but consider having these in other parts of your outlet at this initial stage of reopening.
Finally, although we appreciate the fine balance of managing costs versus revenue, ensure you have enough staff to maintain this regular cleaning process. Your customers will notice this and feel more at ease witnessing it first-hand. For more information on Managing Health & Safety Post-Lockdown check out the last Keg Talks podcast here.
Adopt barriers - The desire for a safe amount of space is reflected in the types of outlets customers are most comfortable in visiting. Overwhelmingly venues with garden seating areas are preferred (69%), with intimate bars and night clubs on the other end of the scale (22%) .
When indoors, place screens in areas where there may be sub 2m interaction, e.g. the bar or between tables, as this is a great way to encourage physical distancing indoors.
The British public has embraced the value of facemasks. Consider making PPE available to your staff and encourage its use, particularly when handling food and drink.
Sealing or wrapping cutlery, condiments and food for take away indicates no unnecessary contact has been made.
Sanitiser and free masks available for patrons demonstrates your customers’ health is priority to you as a business
Use a simple contactless and at-table payment software solution such as Swifty, to reduce unnecessary human contact, encourage reservation of tables in advance and manage capacity.
Tone of voice - After a period of uncertainty and difficulty, there is optimism for the future and that as a nation we’re over the worst of the Covid-19 crisis.
Using humour and positivity in signage or online implies this optimism and reminds consumers of the good times they’ve had in your venue.
Community minded - Being vocal and visible within your local community will help keep your business front of mind and therefore one of the first choices people consider when going out.
Embrace digital – including a great website and social media presence – to communicate your opening times, food and drink offering, facilities such as Wi-Fi and measures being taken to maximise customer safety.
Think of ways to engage with and encourage interaction with your followers on social media that are in keeping with your venue type. For example, if you are a sports bar talk about iconic sporting moments that people may have watched in your venue.
Marketing to younger consumers - As mentioned, this demographic is far more comfortable visiting the on trade and have been the bulk of early adopters since reopening. Therefore, it’s crucial you market your outlet to them in the right way.
In the UK there are now 45 million social media users, this equates to 67% of the entire population. Of these, 39 million are mobile social media users, therefore, your online presence is vital.
Facebook has been proven to be the most effective means of reaching an audience. 40 million people – or 71% of UK adults – can be reached via Facebook adverts. However, Instagram is typically the preferred platform among younger consumers. We would recommend focussing on three platforms – Facebook, Instagram and Twitter – to communicate with new or existing customers. Make sure you devote enough time to your online presence, including advertising your venue, sharing photos or responding to questions or reviews. Check out our social media advice on The Pub Collective or the recent Building your brand online and through social media Keg Talks podcast for more information and support.
Working from home has become the norm - The tech now in place for remote working has created a new normal for meetings. Remote workers will likely be tired of the same surroundings, so make your outlet a destination for them to work in, by:
Offering free WIFI, coffee refills and power points at table for customers to charge their computers and phones.
Consider also offering table-service to encourage that purchase of a second drink or perhaps stay for lunch or dinner. Customers won’t always feel comfortable leaving their items to go to the bar, so come to them and offer them something extra. Research shows that 80% of consumers would order a second drink if asked, so this is a great way to boost sales plus elevate your customer service. Alternatively, payment and loyalty apps like Swifty will enable workers to order and pay for food or drinks from their table.
Consider the layout of your outlet. Can this be adapted to provide quiet areas and single seat tables? Naturally most on trade venues are designed to encourage socialising, however during the daytime and other typically quieter trading occasions this is a great way to improve your income by creating a space for remote workers.
2. The Importance of experience
Although there will be challenges over the next few months, the on trade is a core element of society, often seen as a pillar ensuring good mental well-being through encouraging socialising. The challenge will be whether this period has taught consumers that they can have an enjoyable night out without the associated costs of being in the on trade.
It is imperative therefore that the on trade markets itself effectively and delivers the one unique selling-point, the experience. Whether it’s a knowledgeable member of staff explaining a new dish on the menu or a freshly pulled pint of ale, the on trade experience is one of a kind and not something that can be replicated at home. Here are some top tips on how to ensure you’re offering customers an unbelievable experience:
A perfect serve, every time. Perhaps most importantly following reopening, it’s crucial that you provide customers with a great serve every time they order. Whatever the drink, it has to be better than what they usually have at home to remind them why they come out to the on trade. A fresh, cold, perfectly poured pint is something that consumers simply cannot get at home and have sorely missed! Consider providing your staff with free mobile training, such as Hello BEER, to upskill and upscale their knowledge of beer and cider.
Exceed expectations. At the very least, consumers expect friendly, knowledgeable bar staff, a good atmosphere, clean toilets and the use of technology for payment. They respond well to an extensive range of alcoholic drinks and soft drinks mixers, as well as table service. To deliver beyond expectation, consider offering new or different drinks choices, locally-sourced products or healthy food and drink options.
Deliver a unique experience. Outlets are shying away from traditional activations in favour of more memorable, bespoke activities. However, thanks to Zoom calls and lockdown events, the Pub Quiz is not dead and is in fact thriving! Quizzes can be either free to enter with a drinks voucher given to the winner, or subject to an entry fee with the money collected used as the prize fund.
3. The usual order?
We believe over time behaviours will continue to revert to ‘normal’ and the role of beer and cider will remain unchanged. Occasions drive the choice of drink. While big occasions not possible at this time, reasons to visit the on trade are largely the same meaning the drinks chosen will be the same too.
Draught accounts for 90% of on trade sales volume, so remains vitally important within your offering. Packaged beer and cider may play a slightly more important role initially – especially amongst older drinkers – due to perceptions of safety but following best practice glass care and pouring techniques will not only deliver great quality pints but also help reassure your customers.
One of the biggest challenges that outlets will be experiencing is how to manage their draught offering. Footfall is currently lower than during a normal week. The average pub has nine keg lines, plus some cask ale on the bar. With total beer sales currently down almost 30%, these volume levels will not sustain that number of lines. To get consumers coming back time and time again, pouring great quality beer is going to be even more important. If weekly throughputs are not assured, freshness and quality can be compromised, impacting the consumer experience.
Our recommendation is to bring back your beer range in stages – start with a few lines, say half or two thirds of your usual line-up, then build up as you get more confident with the amount of custom that you are going to expect. While we acknowledge many businesses will now be open, we encourage all to continuously monitor sales and react accordingly. For example, if throughput is compromised then consider your mix of draught versus packaged and offer only on your best sellers on tap until volumes increase.
Once you have a core range in place, you can look to add some more premium offerings to your bar. We still expect premiumisation to be a trend in the post-lockdown on trade. The brands that have seen biggest uplifts have generally been those on the more premium end of the scale and the long term trend of ‘drinking less, but better’ is very much alive.
Across both beer and cider, premiumisation delivers a price advantage but at the cost of lower volumes. A mainstream brand can deliver twice the volume of your premium offering, so ensuring strong throughput and therefore quality should be the primary consideration. Consider initially using your packaged range to offer more premium choices, before losing classic lager or mainstream cider from your range.
We certainly see most premium brands holding a bigger share in 2020 than 2019, but this is a trend to be followed once you have established a strong core offering that appeals to as many consumers as possible. Brands like Foster’s and Carling, John Smiths and Strongbow remain vital to the future of the on trade. Three in every five pints poured is one of the big six brands: Carling, Foster’s, Carlsberg, Guinness, John Smiths and Stella Artois. Strongbow is the same for the cider category. By offering a classic lager, mainstream apple cider, a stout and a keg ale first on your bar will give you a solid, good quality foundation before starting to premiumise your draught offering as volumes increase.
It’s important to remember that the occasion determines the drink choice. Where customers selected no and low alcohol options previously will remain unchanged, such as a lunchtime catch up with a friend or as a designated driver. Pre-lockdown consumers were blurring the lines between health and enjoyment so they could indulge in a balanced way, whilst still enjoying the community feel of a pub. Moderate drinking or going out without drinking alcohol at all will remain popular, so having a good range of no and low alcohol options is key for all your customers to feel part of the occasion.
Finally, with 90% of consumers preferring draught to bottled beer consider stocking alcohol-free beer on draught. Heineken’s BLADE beer dispense system allows you to serve freshly tapped pints of Heineken 0.0 from any counter-top. BLADE's plug and play advantage means that you don't have to swap out an existing tap to meet this consumer demand for draught. Plus, the kegs last longer once broached (up to 1 month) and contain no preservatives. Draught also commands a higher price point so, along with more people choosing no or low alcohol on more occasions, means more cash in your till. In Star Pubs & Bars, stocking Heineken 0.0 in both packaged and draught format delivered 133% uplift in volume sales versus selling packaged alone. Your customers are format loyal, so having non-alcoholic beer on draught and in the fridge drives inclusivity and encourages greater sales all-round.
At HEINEKEN we have absolutely no doubt that the on trade will bounce back. It won’t be without challenges, but the pub holds a special place in the hearts and communities of the British people. During lockdown we saw licensees pivot their businesses to provide vital services such as a local shop, takeaway and delivery, and supporting the NHS or vulnerable groups. Following reopening, the on trade has adapted to make traditional spaces socially distanced for the welfare of their customers and staff. Pubs, bars and restaurants are hugely important to people’s lives and consumer positivity is returning. Through continued support, sharing of advice, new tools and services, we will give the hospitality sector the best chance of bouncing back and returning to the place we all know and love. During lockdown consumers went out of their way to support local businesses and retailers. Now, with the re-opening phase well under way, we expect the hospitality sector will receive a similar level of support from the nation.
 Ipsos Essential report May 21st to 24th, Kantar G7 countries perception of COVID 19 survey, Kantar Covid 19 Barometer UK Wave 5 n = 500
 CGA’s Pulse Survey 14.08.20
 CGA’s Pulse Survey 14.08.20
 CGA’s Pulse Survey 14.08.20
 Attest study 06.07.20, n = 500
 HUK On Trade Weekly Performance Update 20.07.20
 Attest study 06.07.20, n = 500
 Attest study 11.6.20, n = 433
 Avocado Social, 2019
 Avocado Social, 2019
 Serendipity2, Cola Consumer Research in Licensed 2018
 CGA Strategy w/c 22 Feb 2020
 CGA Managed Volume Pool (Fast data only) w/e 18.07.20
 CGA Strategy, 30th November 2019
 CGA Strategy w/c 22nd February 2020
 CGA Strategy w/c 22nd February 2020
 SPB proprietary data 2018-2019