CGA Strategy

Cocktails - What is their potential? CGA Chief Operations Officer Phil Tate investigates.

CGA’s combination of multiple data sources and on trade specialism becomes truly valuable when used to challenge perceived wisdom and provide an informed perspective on the opportunities and issues facing drinks producers and retailers. The content of our recently released report on cocktail culture in the UK does just that. Contrary to the perception that cocktails only work in a select handful of dedicated bars the report reveals that almost one in five on trade outlets serve cocktails. This number is also growing: up +16% in the last year.

The misperception that cocktails are no more than a fringe element of the typical pub or bar offer has been limiting opportunity for too long, resulting in lost margin and, most importantly, less cash in the till.

There is a growing realisation amongst savvy operators that cocktails can play a critical role in driving footfall and revitalising profitable spirits category sales. Given the generally declining frequency in visits, licensees need to deliver a truly premium experience to encourage consumers out of their homes and away from Saturday night event television.

CGA’s research showed that introducing cocktails could grow spirits sales in all forms – cocktails, straight serves and spirit & mixer. As cocktail capability grows, so too do the potential spoils: outlets with sophisticated cocktail capability sell even more spirits in turn than their mainstream counterparts.  It comes as little surprise then that so many are jumping on the bandwagon for the first time; providing new competition for outlets with an established offer.

The CGA team has created, for the first time, a brand new segmentation of the market that quantifies these moves and points the way toward a new understanding and therefore opportunity. Within the cocktail selling universe there exists a hard core of around 3,000 outlets with sophisticated cocktail capability.  There is then a further 5,000 venues with back bars stocked with many of the elements needed for a strong, profitable cocktail offer. As product stocking is the first building block of cocktail capability; these outlets are the next frontier of cocktail development in the on trade.

Whether looking to implement cocktails for the first time or in order to move to a more sophisticated offer the same principles of success exist. Brand owners need to identify and support the top flight of outlets with tailored activation. Outlets themselves need to look hard at the category before jumping in and invest the necessary time in training, implementation and serve quality to the customer.

Of course, a cocktail offer is not right for every venue but the opportunity has spread wider than ever.  The right innovation, targeted at the right outlets will see any investment rewarded by the comforting sound of the chime of the till.

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