On Wednesday this week, KAM hosted our 4th annual Low & No event, at which we shared headlines from our latest research study; ‘Low & No 2023: The Customer Perspective’, in partnership with Lucky Saint. An audience of 180 operators and brands gathered at the beautiful Westminster Chapel to discover the customer behaviours that are driving the movement of moderation.
The Customer Perspective
Blake Gladman, Strategy & Insight Director for KAM, shared the headlines from the new research, for which a sample of 550 UK adults (+18) were surveyed. The message was clear: moderation is now mainstream, with 3 in 4 of us moderating our alcohol intake to some degree. The number of people looking to moderate alcohol consumption is similar in size to the number who consume alcohol once a week (77%). It’s no longer niche, as many adults who do Dry January will actively moderate in the (traditionally boozy) summer months.
However Low and No consumption is still yet to reach its full potential within Hospitality, even though the proportion of people visiting the on-trade and not drinking alcohol has increased again, 31% in pubs/bars and 40% in restaurants.
The research found that 1 in 4 consumers who don’t want an alcoholic drink still default to tap water, which on its own represents a missed revenue opportunity of £800m to the sector – no change from last year. Our panelists agreed with the research that visibility, range, and staff are the three key barriers.
What does this mean – well the research suggests that improving visibility of Low and No could be worth an additional 123m visits per year to the on-trade. Improving the range would encourage another 117m visits. Frontline teams can have a massive impact on this; if staff pro-actively made recommendations when customers wanted an alcohol-free drink, 2-in-5 would consider purchasing it.
The Operator Perspective
Following on from Blake, we had an panel of inspiring operators; James Bolton, Head of Category for Mitchells & Butler, agreed that their focus is on creating theatre with their drinks offer, and delivering a valuable experience to their customers, and that their low & no offer needs to be held up to those principles. James suggested the real challenge in visibility is getting frontline staff and ops teams on board. But he recognised that getting it right can mean wins for occasion drivers and wins for margin drivers. Frontline staff however have a lot to think about, such as increasingly long wine or cocktail lists but this is a more important win. James stressed that it’s harder to get someone to go from water to alcohol-free beer than a Carling to Peroni, but the win is bigger!
If someone is after a lime and soda, they clearly want something long and refreshing, so think how you can shift them up- from water to lime and soda and to a low and no cocktail. James Bolton, Mitchells & Butlers
Simon Farrow, Category Director for Tao Hospitality Group (who’s portfolio includes Hakkasan), have already taken the bold and innovative step to ‘zero proof’ their entire cocktail menu, providing like-for-like equivalents across the whole range and said “1 in 8 of our cocktails are now alcohol-free. That’s a £4 to £12 spend increase if they were getting sparkling water.” Tao Group have really focussed on training with dynamic 1–2-minute games to help staff learn little soundbites about the cocktails and incentivising teams – who can get the most AF drinks sold.
You have to change the operator’s paradigm of the importance and role of the category, otherwise it won’t be prioritised. Simon Farrow, Category Director, Tao Hospitality Group
Elliot Oxley, Head of Bar Operation for The Alchemist commented, “We are a cocktail bar, people don’t choose us for low and no, they’d go to a café, it’s something we need to shout about more.” They are working on improving visibility by making the low and no menu easily available online and through Instagram. They’re looking at placement on menu and have recently moved it to the front of cocktail lists. He also said they want brands to “come and meet the team, train the team, engage with them.”
Treat low and no cocktails the same as a normal cocktail, invest it in, research it, put time into it. We line them up and they should all look and excite the same. Elliot Oxley, Head of Bar Operation, The Alchemist
The operators were all in agreement that low & no is a key part of their future strategy and that operators need to give it the attention it deserves as the rewards will come.
The “Landlord” Perspective
Next up we had Luke Boase, Founder of our research partners, Lucky Saint, who have recently relocated to a new office space above a pub, which they now operate. Speaking of their new venture, Luke said that they “wanted the pub to be a physical manifestation of the brand on the bottle and to bring the Lucky Saint experience to hospitality.” A great mantra for their business, but also a great call-to-arms for every low & no brand who wants to be successful within the on trade.
The Gen Z Perspective
After a break, in which the guests got to enjoy the fantastic low & no products from our event partners, including Lucky Saint, Mocktails, Pentire, Trip, Everleaf, Gorum IPA Zero, Britvic and Dalla Corte, Katie Jenkins, Marketing Director at KAM gave the crowd an insight into the new generation of drinkers. (Subscribers to the KAM Knowledge Hub can access these slide for free.)
The key being that this generation are a more educated and discerning consumer of low & no and therefore have higher expectations and will demand more from hospitality. They are also more open to trying low & no options outside of the traditional ‘alcohol alternatives’, such as CBD infused drinks and other functional options.
We also heard an excerpt from the latest Hospitality Talks interview with Daniel Rowntree, an industry titan who is now dedicated to the booming dry economy and what comes next, from CBD, to THC, psychedelics and beyond. He spoke about his experiences living in Los Angeles and how the future for socialising will come from non-alcoholic stimulants.
The Drinks Brand Perspective
TRIP Co-Founder, Olivia Ferdi, shares the view that ‘functional drinks’ will continue to grow. (Check out KAM’s recent vlog on CBD drinks here.) Olivia suggested that consumers who are looking to relax and unwind will not always look at pubs and bars as the obvious choice once alcohol no longer becomes the driver of their decisions. It opens up a fascinating conversation around what the future of socialising will look like and therefore what the ‘ideal’ venue must offer in order to meet the changing customer demands.
Consumers who are looking to relax and unwind will not always look at pubs and bars as the obvious choice once alcohol no longer becomes the driver. Olivia Ferdi, TRIP
Olivia suggested hospitality operators have an opportunity to use the drink brand platforms to help drive customer trial in venues. The drink brands may already be engaging customers at a coffee shop in the morning, the gym in the afternoon; the brand themselves have many more touch points than just a pub or a bar. Hospitality can take advantage of this.
Ed Gerard, CCO at Mocktails, bought us back to the importance of focussing on the right range in venues. He stated there as many people who don’t drink alcohol as there are vegetarians and vegans so venues should be giving equal (if not more) focus to curating their alcohol-free menus.
The Future Perspective
Our final panel of the day saw Emma Inch, Chair of the British Guild of Beer Writers, Emma McClarkin, CEO of BBPA, and Karen Boscher, Board Member and Independent Advisor, discuss the practicalities of how the on trade can begin to adapt to the changing consumer with Robyn Black, Head of Content at Fleet Street.
Karen made an interesting point (in fact she made many!) that in the UK we see low and no as a replication of another category with something missing, which is actually a very negative starting point! In the US, it appears to be a completely new category and it’s happening very fast.
She also pointed out that investing time and money into low and no can be a leap of faith for the operator. Commercially it might not make sense now, but it needs to be done to remain relevant. With alcoholic pints, people drink two pints, then have 4, 6 as the stimulus is there. That’s not the case for AF, the average is 2. So how do you encourage longer dwell time and the higher spend per head.
Low and no can be a leap of faith for the operator. Commercially it might not make sense now, but it needs to be done to remain relevant. Karen Boscher
They agreed that it’s unlikely the future will be totally alcohol-free, but that a change was coming, and that operators need to be ahead of the curve in order to at the forefront with consumers. It will likely require on over-investment in low & no at this point in time, but the benefits will be seen down the line. The customers of the future will be loyal to those operators and brands who are changing the game now.