Worrying statistics and a time bomb

on 03 March, 2016

They say there are lies, damned lies... and statistics. You betcha. The other day I spent an hour helping a Canadian statistics company check its results for the UK drinks market.

Such companies do market research then write reports on territories across the world and sell those reports for a figure of $500 or more to anyone interested in knowing what the biggest-selling rum in the hospitality industry is, or what proportion of total market share white rum has in supermarkets.

I am a bit anal when it comes to statistics, so I found the whole exercise very interesting, though somewhat surprising. And I have to say that if I was spending $500 and planning a product launch based on this particular information, I’d have cause to be worried. For instance, I questioned the 9% market share the report gave to Bacardi in the rum section.

“Shall I put it up to 15%?” asked the man on the phone. And later: “Are you sure Pernod isn’t a vodka?” As is always the case with these companies too, they hadn’t a clue when it came to separating Scottish blends from single malts. Hey-ho.

But the statistics that most made an impression on me were the ones that suggested that supermarkets and hypermarkets are increasingly dominating sales figures for spirits, that they are doing so by selling a huge amount of the biggest brands, and that in 2014 online sales were about 1% of the total.

Those first two facts suggest to me that the future for smaller and independent operators – whether they be retail outlets, pub, bars or hotels – lies with smaller, esoteric and high-premium brands, promoted through their back story of provenance and heritage.

The unique selling point of any independent operator is that they are people-facing, personal, bespoke operations presenting quality drinks through informed, motivated and pleasant staff.

All well and good, but the message coming across loud and clear from those statistics is that these businesses need to be bang on their game in the future if they’re not going to get swallowed up. Not least because the third of three facts I presented represents a ticking time bomb. Online sales may well have been 1% of the total in 2014 but I bet you they were considerably more in 2015.

And they’re set to grow and grow. It’s hard to believe otherwise when Amazon is selling spirits online at highly competitive prices for next-day delivery or, in the case of purchasers in London, the same day if you buy early enough. But all hope isn’t lost. According to the Canadian report about 15% of spirits
sales are of brands too small to be statistically significant – which means there are hundreds of spirits selling not very much – an opportunity for anyone prepared to make the effort to seek them out.

While the internet and e-commerce is a threat to the old ways of doing business, it provides a huge opportunity, too – and that’s because it’s never been easier to access exciting, innovative, and unusual brands from the strangest and unlikeliest of sources.



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