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The drinks categories to watch next year A look at some of the essential products for Scotland’s pubs and bars in the coming months

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TOCKING the right range of products is an essential part of any successful licensed business, but with so many brands vying for attention it can be tricky to decide on the best fit for a particular venue.

In the next few pages SLTN looks at what have been some of the top performing drinks categories in the Scottish on-trade this year, highlighting some of the key developments in terms of brand activity as well as the value of said category, as reported in the SLTN top brands

feature in summer 2015 and the William Grant & Sons 2015 Market Report.

According to figures provided by CGA Strategy in the summer, beer was – by a long way – still the biggest drinks category in Scotland’s pubs, despite a dip in sub-categories such as lager and stout.

Spirits also remain a hugely profitable area for the on-trade, with products such as Scotch whisky, imported whiskey, rum and gin all showing growth between 2014 and 2015.

And while the big brands in these sectors all continue to command huge volumes, the William Grant & Sons report attributed the majority of spirits growth to ‘premiumisation’, as consumers continue to trade up to high-end products.

Elsewhere, cider and speciality spirits/liqueurs continue to make waves in Scotland’s pubs and bars, and brand owners have driven this with a combination of marketing support and new products.

Beer: still the on-trade’s biggest seller TOP BEERS Tennent’s Lager Guinness Carling Belhaven Best Stella Artois • CGA Strategy, summer 2015.

THE humble pint has long been a cornerstone of the British pub, and that’s not likely to change in 2016.

According to CGA Strategy, combined sales of lager, ale and stout in Scotland’s bars and pubs topped £969 million between 2014 and 2015.

Unsurprisingly, the category’s biggest players have all worked hard at retaining their top spots during the past year, with Tennent Caledonian and Guinness launching new products and major marketing campaigns while Molson Coors, Greene King and AB InBev – owners of Carling, Belhaven and Stella Artois, respectively – supported

publicans with promotions and marketing initiatives.

Lager remains the most popular style of beer in Scotland, with ale in second place and stout third. Both lager and stout dipped in value between summer 2014 and summer 2015, but ale increased to a value of £225.3m – good news for brands such as Belhaven Best, Deuchars IPA and John Smith’s.

Aside from the bigger players in the market, the ‘craft revolution’ looks set to continue into 2016, with an ever-increasing number of Scottish craft brewers and products for bar and pub operators to choose from.

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Wining and dining Scotland’s publicans SCOTLAND’S new drink drive limit is said to have hit alcohol sales in many venues, with the lunchtime glass of wine among the first victims.

In spite of this, however, wine remains an essential product in the Scottish on-trade, particularly in those outlets where food is a central part of the offer.

As with other drinks categories, one of the key trends reported by wine suppliers this year has been consumers opting for higher-end products.

Offering a large selection of wines by the glass is said to be a good way of encouraging customers to experiment with different wines, and some suppliers say marking up wines by cash margin rather than gross profit can also make premium wines more accessible.

“[It’s] better for turnover to sell two bottles and make £16 than sell one and make £10,” Billy Bell of Wine Importers told SLTN back in April. “Customers will remember and return.”

And while established favourites such as Sauvignon Blanc, Pinot Grigio, Merlot and Shiraz are still going strong in bars and restaurants, consumers are also said to be looking for something new and different from their wine.

Suppliers claim emerging styles such as Albarino, Viognier or Gruner Veltliner have all gained traction with wine drinkers in the last year, and recommended licensees consider lesser-known grape varieties for their wine lists.

Expect the country’s wine suppliers to unveil their new lists in the early part of the year.

Cider: still the trade’s sweetest fruit?

CIDER has been a huge success story for the licensed trade in recent years, with the introduction of fruit ciders helping to reinvigorate the category and attract new customers.

Now, the cider category is more diverse than ever, ranging from traditional, heritage products to sessionable draught brands and onto the sweeter, Swedish-style fruit ciders.

According to CGA’s figures, the cider category was worth £128.2 million to Scotland’s bars and pubs in the year to summer 2015, with Strongbow the biggest-selling brand, followed by Kopparberg.

Strongbow has been working hard to retain its top spot in the last couple of years, with the introduction of new draught versions of its Dark

Fruit and Strongbow Cloudy Apple, while this year saw Kopparberg extend its own range with the launch of frozen pouch versions of its ciders, as well as a major summer marketing campaign (pictured right).

Magners reinforced its links with live music in 2015 with its ‘Summer Nights’ concerts in Glasgow and Edinburgh while, elsewhere, Carling owner Molson Coors moved into the cider market in a big way with the acquisition of Swedish cider brand Rekorderlig.

Similar to wine and beer, tastes in cider can change in the course of a year, and producers have advised licensees to keep an eye on which products are stocked at various times of year to ensure sales are consistent regardless of the weather.

Rum opportunity for bars and pubs RUM sales in Scotland’s pubs and bars grew to nearly £100 million between summer 2014 and summer 2015, reinforcing how important the spirit is to the on-trade.

And Diageo seemed to underline this importance when it said that Scotland accounts for nearly half of the company’s UK on-trade sales of Captain Morgan.

Sales figures aside, the category is clearly booming, with Diageo introducing a new white rum to the Captain Morgan stable, Bacardi repackaging its range and Havana Club tweaking the recipe to its Anejo expression all within the last year.

Marketing activity in 2015 included live music tour ‘the ride’ from Sailor Jerry, which saw the brand embark on a 15-date

programme of music, food and drink in locations across the UK. The main growth in rum is said to be in the spiced and flavoured sector of the category, with the William Grant & Sons Market Report claiming those products are now stocked in around 69,000 outlets across the UK – an increase of 5000 outlets from 2014.

Dark and golden rums are said to be more popular with male customers in the on-trade, according to William Grant & Sons, with white rums having a more female bias.

Earlier this year drinks firms told SLTN the rum category overall has been attracting younger consumers in recent years, largely driven by the popularity of spiced rums as well as cocktails such as the Mojito. In fact,

more than a third of rum serves in the trade in 2014 were cocktails, according to William Grant & Sons.

TOP RUMS Captain Morgan Bacardi Havana Club OVD Sailor Jerry • CGA Strategy, summer 2015.

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The national drink: a spirited performer SCOTLAND’S national drink is a significant player in the country’s bars and pubs, with annual sales of £113.7 million as of summer 2015, according to CGA Strategy.

It’s a category that remains dominated by the big blends – particularly The Famous Grouse, Whyte & Mackay, Johnnie Walker and Bell’s – but the value of single malt is said to be growing.

Those licensees looking to stock something unusual have a wide range of producers to choose from, both from the big blend owners (including Edrington Group, Whyte & Mackay, Diageo and Pernod Ricard) as well as firms such as Inver House (owner of Old Pulteney and Balblair), Ian Macleod Distillers (the firm behind Tamdhu and Glengoyne) and William Grant & Sons (parent firm of Glenfiddich and The Balvenie).

Vodka still a giant of the on-trade

Try something special on your back-bar

IT’S by far the most popular spirit in Scotland’s bars, pubs and clubs, accounting for – according to Diageo – a 34% share of all spirits sold in the Scottish on-trade.

And though brands such as Absolut and Glen’s sell a considerable amount of product in Scottish venues, Smirnoff remains the real powerhouse of the vodka category.

The standard vodkas are just part of the category, however, and an increasing number of flavoured vodkas have been introduced in recent years – providing greater choice for licensees looking to expand their vodka range.

According to William Grant & Sons, hotels, restaurants and drink-led pubs account for the biggest growth in vodka sales.

And in 2015 CGA Strategy reported the category was worth £217.8 million in the Scottish on-trade – making it one of the most valuable in Scottish bars.

ONE of the more diverse drinks categories, liqueurs and speciality spirits covers a lot of ground – from traditional, afterdinner liqueurs sipped neat or over ice to shooters and longserves.

According to William Grant & Sons, nightclubs have the highest rate of sale for speciality and liqueur products, but they are not the only type of venues that are benefitting from stocking up on these drinks.

Firms told SLTN this year that the popularity of many products in the category is tied to their use in cocktails, and in particular to a trend from consumers – not to mention bartenders – towards new and interesting flavours.

Trying new things is recommended for licensees, too.

After all, few would have predicted how popular a German

herbal liqueur could become in Scotland, but Jagermeister has, in a relatively short space of time, become the most valuable speciality/liqueur brand in Scotland, according to CGA Strategy.

Who knows what the next big speciality product will be?

The gin journey continues THE gin category has exploded in the past couple of years, with a wide range of craft, small batch products joining the established players on Scotland’s back-bars.

The big names, including Gordon’s, Bombay Sapphire, Hendrick’s and Tanqueray, continue to account for the highest sales in bars and pubs, but William Grant & Sons (owner of Hendrick’s) has attributed the recent boom in the category to the craft end of the sector.

The flood of these new products has, according to the company’s Market Report, encouraged consumers to seek out and try new and different gins.

Whatever the cause, gin is certainly in rude health in Scotland’s bars and pubs.

According to CGA Strategy, Scottish on-trade sales of gin increased by more than £10.5m to £58m between summer 2014 and summer of this year.

Brand activity at the top end of the category this year has included the release of limited edition products from Diageo-owned Tanqueray as well as the appearance of the Hendrick’s ‘Emporium of Sensorial Submersion’ at the Edinburgh Fringe.

Meanwhile, the small batch end of the spectrum has seen the launch of gins from Strathearn Distillery, Arbikie and Spencerfield Spirit Company, among others.

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