PROOF Insight Weekly Update

Coronation fails to boost the on-trade, results more positive for off-trade

It has been estimated that around 50.5m pints were poured across the UK, up by +5.7% from the Jubilee bank holiday in 2022 but less than the 62m predicted to be sold.?The Oxford Partnership has claimed that the average pub served 1,335 pints of beer and cider over the coronation weekend,?generating ￡6,006 per pub. However, early indicators show that it was “not a major positive for those who benefitted” whilst some venues failed to see any uplift in sales. The Red Lion in Shepperton claimed that there was around a 20% drop from standard trading levels. According to DesignMyNight, booking figures were 17% down on the first bank holiday the weekend before.

In addition, the street parties and at-home events were the preferred option with only 30% planning to go to the on-trade over the weekend, according to PROOF POURTRAITS. With around 20,000 official street parties taking place and Tesco estimating it sold 600,000 scones and 9m bottles of wine, early indicators suggest this was a triumph for the off-trade.

With one more bank holiday in store this month, there are hopes that the weather picks up so that consumers enjoy it in the on-trade.

Sources:?PROOF POURTRAITS Panel, The Morning Advertiser, The Guardian, Langton Capital

Cask continues to lose out to keg

In the 12 months to March, sales of cask ale were down almost 33% on pre-covid. Compared to the previous 12 months, there has been some recovery with volume up +8%. However, growth in keg ale (+19%) continues to outpace cask. Cask ale remains popular with older consumers, although kegged ale has turned the heads of many younger consumers thanks to its colder serve temperature, fizzier composition and typically lighter taste. There are benefits to operators too; keg ale provides a higher profit margin as well as being easier to store and lasting for longer than cask.

Volume growth of keg ale is largely driven by craft brands. Beavertown Neck Oil is the third largest keg ale in the UK on-trade by volume, seeing +93.1% growth in the 12 months to 25th March 2023 compared to the previous year. Likewise, Brixton Reliance (+105%) and Goose Island Midway IPA (+22%) have both seen growth.

Cask is still a successful avenue for many traditional producers – although many are looking to modernize. Timothy Taylors Landlord cask ale saw +42.2% volume growth on last year. This hasn’t stopped the brewery releasing “Hopical Storm” – their first venture into keg ale that was on show at last weekend’s Brew London event. Greene King, another major cask ale producer, have turned their focus away from cask towards their first craft beers that have seen success since their release in 2022.

Sources:?CGA OPM MAT to 25/03/2023, The Daily Telegraph

London sales in the first quarter of 2023 show the capital is making a rapid recovery

CGA and Wireless Social Vibrancy Tracker, which monitors sales in Britain’s ten biggest cities, shows London has jumped from last place, a position it held for most of 2022, to take the second spot after Edinburgh in the first quarter of 2023. While the sales growth in the capital were still behind in real terms, sales almost reached inflation levels in the first quarter of 2023 suggesting that London is making a positive recovery.

As one of the worst affected cities from the pandemic, seeing 540 permanent site closures from March 2020 to March 2023, London is regaining footfall as office workers and visitors return. What’s more, the net closure rate in London has slowed down to 1.1% in the last six months suggesting that perhaps the worst is over.

One of the areas of growth that is driving the city’s recovery is competitive socialising. New competitive sites are opening in key business hubs such as Canary Wharf which are mitigating the fall in footfall during the weekdays and also drawing in new consumers who are looking to make their experiences in the on-trade more memorable. While trading is still challenging, London’s recovery provides a positive outlook.

Sources:?CGA and Wireless Social Vibrancy Tracker Q1 2023

Investments, Mergers & Acquisitions:??

• BrewDog have announced plans to invest ￡7m into a new still house and updated branding
• Brew By Numbers and Brick Brewery are reportedly on the verge of calling in the administrators
• Luxco American Whiskey have acquired Penelope Bourbon for $105m
• Ever So Sensible Restaurants have purchased the freehold of Lincoln’s Duke William Hotel
• An unnamed buyer has purchased the Dartmouth Arms in Tufnell Park for almost ￡2m
• Lottie’s Property pub group have acquired The Cock & Rabbit in Merseyside
• Parched London have acquired the freehold of The Earl of Derby in New Cross for just over ￡1m
• St Austell Brewery have acquired the Crabshell Inn in the South Hams

Sources:?Drinks Business, Spirits Business, Propel

Product Launches & Campaigns:

• Brad Pitt has launched The Gardener Gin – a London Dry gin celebrating “the art of living”
• Bacardi have launched a Mango Chile edition, adding to their flavoured rum range
• Annandale Distillery have partnered with Game of Thrones actor James Cosmo on the launch of Storyman – a blended Scotch whisky
• Sanguine Estate have released a Shiraz in collaboration with former cricketer Allan Border
• Havana Club’s Cuban Mode campaign is coming to the UK – encouraging rum drinkers to explore the “spirits of the Cuban”
• Corky’s schnapps have unveiled a new bottle design and new recipes with the aim of increasing their consumer base
• BrewDog has announced a new range of spirits including vodka, rum and gin under BrewDog Distilling Co

Sources:?Drinks Business, Spirits Business

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