Consumers have had nearly two months of drinking at home now and as virtual tastings and online drink making classes increase, home habits are changing.
As Andy Gaunt, General Manager Fever-Tree ANZ, told Bars and Clubs, the circumstance of lockdown can mean a different mindset when it comes to having a drink at home. With no commute involved people can finish work and realise they have more time to make themselves a good gin and tonic, rather than just opening a beer or wine.
Fever-Tree is seeing its off-trade performance grow strongly in the recent weeks as consumers decide to make improvements to their drinking habits. This does present a short-term, boost the company is also thinking long-term and how this pattern could help on-trade when venues are allowed to re-open.
Fever-Tree’s Co-Founder and CEO Tim Warrillow said recently that the business is in strong cash position and that alongside the business model of a relatively low fixed-cost base means the business is in a good position to plan for both the short- and long-term implications of the COVID-19 crisis.
“We are relatively robust at the moment but we are working on the short-term occasions of people drinking at home, but also focusing on the longer-term re-opening and the change of consumption that take place a bit later this year,” Gaunt told Bars and Clubs.
“Most importantly is that thinking on the medium to long-term.
“How do we start now to plan our support to the on-trade, as things start to re-open? And how do we continue to support the category of gin and tonics, spirits and mixers, by driving some messaging and positive opportunities to have people visit bars and pubs and celebrate the world of the gin and tonic for example.”
One of the ideas Fever-Tree is working on is helping bars use this time to maximum effect, so that when re-opening does come you are able to maximise all opportunities.
Gaunt said: “Without taking away from the many challenges we all know the on-trade is seeing right now, the other opportunity that we see for the on-trade is to use this time to emerge from this time having had a really good spring clean.
“Spring clean your fridge layouts, and your mixer programs to mean that when the re-opening does start, the right product range is available. To really make sure you deliver not just the basics of service, but the important profitability. We have the conversation with our customers about value, but when things re-open profit per customer is going to be very important.
“I think this gives a real opportunity, and something we will be looking at over the next few weeks is to really look carefully at the way mixer programs in the on-trade have been managed, and to provide customers across the on-trade with simple but important category insights and solutions. So that as things start to re-open the range of mixers can be correctly sorted out, with an opportunity to do that without trade getting in the way.”
In terms of the impact of current changing habits, Gaunt told Bars and Clubs: “This also recognises that there are hundreds and thousands of Australians across the country who have tasted their gin and tonics with Fever-Tree that might not have done before. They are now making the choice and choosing Fever-Tree above other mainstream mixers in the supermarkets and they will be going back into the on-trade.
“So here’s the opportunity for venues to have a conversation around premiumisation through giving value; value in a sense good tasting, good quality and drinks that might cost a dollar or two more, but we think consumers will be happy to treat themselves to a drink that tastes great once they get back into the on-trade again.”
The COVID crisis has brought other changes for the business, with the second G&T Festival, which was due to go ahead in November now shifted to early 2021. But June 13 is World Gin Day and Fever-Tree is planning some exciting activity starting then and running through the winter months, which will be formally announced soon.
Gaunt did say that the plan will be to involve the on-trade in the program through masterclasses and bringing drink-making to life. He added that although the physical G&T Festival won’t be happening later in the year, Fever-Tree is hoping to be able to bring the festival to life in bars and pubs around the country. That will then be followed by the return of the G&T Gardens activity for the summer months, culminating in the Festival in 2021.
So while the undeniable challenges still exist, there is hope and many suppliers are looking at what they will be able to do to help venues when the lockdown restrictions are finally lifted.
