Automatic for the people

01 June, 2020

The future of the drinks trade will feature more ecommerce and greater use of robots.

A rural bar owner in Ireland has turned to drone deliveries in order to keep her loyal customers lubricated during the coronavirus lockdown. Avril McKeever, who owns the 152-year-old McKeever’s Bar & Lounge in Rathrinagh, loads up the drone with bottles of beer, cans of cider and snacks. Nephew Paul Clarke then flies it over the township and drops cold drinks to customers’ doors.

However, it has experienced a few teething problems. “We had a bottle of wine and a bag of Tayto crisps ready to go last night, but it didn’t take off because of the wind,” said McKeevor.

Bar owners across the world are working hard to continue serving their communities during these strange times. They are embracing modern technology in their droves, and it is likely to cause a permanent shift in the way consumers buy drinks.

Ecommerce has been the drinks industry’s star performer during the lockdown. Delivery services have been inundated with orders, online drinks retailers are hiring new staff, traditional retailers are ramping up their ecommerce offerings, and even some bars have pivoted to online sales. The drinks trade has been slow to embrace the digital revolution, and it certainly lags behind other FMCG sectors, but it is rapidly making up for lost time during the coronavirus crisis.

“The impact of Covid-19 has rapidly accelerated digital across the board,” says Jon Reay, chief executive at Rewrite Digital, which helps food and drink businesses make better use of digital platforms. “On-trade businesses have either ceased trading or pivoted and found way to still operate and change what they do. There have been some really interesting shifts, and these changes to some extent will continue beyond the slow opening up of society that we are going to experience.”

Rewrite Digital has worked with some of the world’s largest distillers and brewers, along with craft producers, retailers and trade bodies. Reay acknowledges that in general the drinks industry has been “a little bit behind the curve” when it comes to ecommerce, but notes that the landscape is rapidly changing in 2020. He warns that now is the time for bars, retailers and producers alike to fully embrace the digital revolution before it is too late.

“Those starting to employ technology within their operations will see the benefit and accelerate beyond those who aren’t adopting technology,” says Reay. “We are going to see this gap growing between the digital leaders and those who are not taking digital forward. That’s where we are unfortunately going to see some businesses not surviving.

“Really taking technology forward, adopting it and continually looking at what’s new is what drinks businesses are going to need to do. To date, a lot of the digital examples have been gimmicks and examples of what can be done, rather than displaying the effective performance of digital. That’s going to shift. There’s going to be much more that adds business value. Those that don’t adopt it will lose market share. Now is the time to get going with it.”

Small bar owners have been quicker to mobilise during the global lockdown than groups with multiple sites and large workforces. Local pubs and bars have created new services for their communities, launched virtual pub quizzes and happy hours, and pivoted quickly to off-trade sales and deliveries in an effort to remain relevant and stay afloat during the crisis. Now the on-trade is starting to return to life across the world, but operators will have to remain innovative in order to keep customers safe until a Covid-19 vaccine is discovered.

Reay urges bar owners to consider digital solutions over the next year. “The on-trade will be very different,” he says. “It will still innovate, and there will be more activation of digital in the on-trade. Things like mobile, at-the-table ordering rather than going up to the bar is probably going to become a lot more commonplace and drive a lot more engagement through mobile interfaces.

“We are going to have more digital displays, where people can order things and interact with pubs and bars without having to touch a screen. Mid-air actions and automated, robotic bartenders could be involved. There have been trials of this already, but this will be incorporated much more into the on-trade. Social distancing is going to encourage a lot more automation in the medium-term.”

He believes that ecommerce could now establish itself as the primary channel for drinks sales in the long-term. “There will be sustained growth in digital as a result of this,” says. “We have seen on-trade go to zero and an at-home experience and distribution model has really grown. We are going to start to see a little shift as the on-trade opens up, but it’s going to be very slow.

“In the longer-term, we will see a new category of at-home drinking and delivered products. Ecommerce will really take a foothold and perhaps even become the primary channel for a lot of drinks businesses.

 “There will be a different way of thinking on how to deliver and serve drinks as part of the at-home experience. It could be supported with virtual elements or content. It’s all supported by digital. It’s a new way of thinking. I think that will continue and the on-trade will struggle for a number of years.”

Producers are ramping up direct to consumer sales platforms in the digital sphere, but Reay believes there will still be a long-term role for online retailers. “In the past a lot of direct to consumer initiatives have come and gone, and the trade has been vastly the way to distribute,” he says. “Direct to consumer will grow. Producers will see the value of developing that first-party relationship, which is always the Holy Grail for FMCG brands. The data gathered around that and the ability to personalise will really come to fruition. It will make that direct to consumer model much more attractive. We will see drinks producers starting to develop more of that direct relationship customers.

“There are obvious cost efficiencies in going direct to consumer, but the trade is not going to go away, and I think its value is recognised. That support from drinks producers to the trade has been really evident throughout the Covid-19 period, and that collaboration throughout the chain is going to be a hard thing to break.

“The intermediaries will still play a very strong role, because they are set up with an online model, and customers have a relationship with them rather than individual producers, so they will contribute and find their place within this broadening category of online.”

One challenge for the drinks industry is driving trial, creating a sense of theatre and showcasing innovation while bars are closed and travel retail is quiet. Online platforms have not yet filled this void. Reay believes subscription services delivering regular samples to consumers could help bridge the gap, along with packaging that opens up a digital world via QR codes and augmented reality, but he admits there is a long way to go.

The increase in automation during the coronavirus crisis could make some people wary of the role robots will play in the future of the drinks industry. Yet Reay believes robots will simply help make our roles easier rather than steal our jobs. “Artificial intelligence will increasingly have a role as an enhancing layer,” he says. “A master blender’s role will not go away. We will need human experts. However, machines can really help to enhance that model and provide them with more data and smarter data, to help them do their jobs better. It’s not about taking jobs away from people. It’s about giving value to them.”

* For more on these subjects, Rewrite has just published a 2020 Drinks Report, while Reay features on a recent episode of DrinkX, a podcast launched by Ripples and focusing on next-gen drink experiences.





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Nick Strangeway

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