From alternative packaging to better value options, Drinks Retailing’s recent London Wine Fair panel discussion explored the biggest trends in off-trade.
Hosted by Drinks Retailing editor Lucy Britner, the expert panel was made up of Marks & Spencer head of BWS transformation, Andrew Shaw; YesMore agency co-founder Tom Harvey; Vineyards owner Hannah Wilkins and Kam Research head of insights Laurence Brown.
In light of the cost of living crisis and changing consumption habits, the group discussed the key factors influencing the drinks retailing scene.
As inflation and rising living costs permeate every corner of the drinks trade, the panel began by exploring the impact of national financial difficulties on the retailing landscape.
Taking a look at consumer’s perspective, Brown cited a recent YouGov survey in which the majority of respondents noted economical issues as the biggest challenge the UK is facing in 2023.
However, while Brown said that consumers are cutting down on “non-essential spending”, many are also “willing to spend if it’s for the right thing, and that’s true value.”
Delving into what value means for UK consumers, Marks & Spencer’s Shaw highlighted that good value doesn’t always relate to the product with the lowest price point, but rather higher-quality options that provide shoppers with a better drinking experience.
“M&S does play strongly on the quality for value for money proposition, and we’re actually performing very strongly at the moment, which you would think is counterintuitive to the economical environment that we’re in.”
However, from a marketing perspective, YesMore’s Harvey noticed a shift in how brands are communicating with consumers, with many going down the “promotional route”.
Harvey said that while this may provide a short-term solution, brands must tap into the notion of quality-led value to weather the current financial crisis.
For Harvey, drinks companies can achieve this by focusing on brand storytelling to establish a connection with consumers’ personal values. Brown echoed this, and said that the cost of living crisis could provide an opportunity for independent brands and retailers, as consumers seek value by shopping local.
“One thing we’ve seen from research is that off the back of Covid is that everyone got to know their local community a lot better. We talked about earlier people being willing to spend if it’s for the right thing, and everyone loves the idea of supporting local producers and businesses.”
Speaking of consumers’ personal values, it seems that sustainability is more important than ever to drinkers – particularly Millenial and Gen Z consumers.
Brown said: “Younger generations really do want to know what’s in their drink and how it was made, so sustainability credentials will impact what they choose to buy.”
Vineyards’ Wilkins said the retailer has seen a “huge increase” in consumers searching for more sustainable options: “People are not just looking for organic anymore, they’re looking for vegan wines, they’re looking at the weight of glass bottles.”
On the topic of packaging, Wilkins said that while glass bottles still represent the majority of product packaging in the wine industry, alternative packaging is making waves.
“We recently started stocking When in Rome which comes in cardboard packaging and we’ve made a huge movement towards more sustainable packaging,” she said, mentioning cans and bag-in-box as two other increasingly popular formats.
Shaw emphasised the importance of sustainable packaging to today’s consumers: “From our customer feedback, there are two priority elements in terms of sustainability. One is packaging. And so removing plastic and unnecessary packaging is absolutely fundamental, and the other is wastage.”
And as sustainability becomes a top priority for more and more consumers, Wilkins said that retailers need to be prepared for this shift in order to retain customers.
“Consumers are asking more questions about sustainability, and I think if retailers don’t have a clear answer, they are going to get caught out.”
HOME DRINKING OCCASIONS
As the discussion drew to a close, the panel took a moment to consider the future of home drinking occasions following the pandemic, which saw more consumers than ever turn to the off-trade to create at-home entertainment experiences.
Promoting home drinking occasions and providing the right products for said occasions is essential for the off-trade to thrive. Harvey suggested that retailers looking to make the most of home drinking opportunities should draw on the lighter side of marketing.
“For me, at home drinking occasions have to be rooted in the experience and the fun side of it. We’ve all just invested loads in our homes over the pandemic, and because of that, people do want to spend a bit more time there. So let’s focus on the fun and entertaining side of the experience.”
Wilkins agreed, and said that Vineyards has continued to offer free online events – which gained popularity during the pandemic – for its customers to help engage them outside of the store while creating a home drinking occasion.
Concluding the talk, Shaw said that for the off-trade to see continued success beyond the pandemic, producers and retailers alike have to work to keep building trust with consumers while providing quality offerings for a fulfilling home drinking experience.
“Our primary focus is quality and service, so we’re committed to delivering on both of these grounds. Then, consumers are more likely to have a long-term relationship with a particular product or retailer – they’re more likely to be loyal to it.”