As a nation of flat white drinkers and foodies growing up in an experience economy, you’re as likely to see a British 20-something sipping a cold brew coffee and finding recipes on Instagram as you are drinking a pint down their local pub.
Our thirst for bespoke, on-demand experiences means the nature of 24-hour culture is also changing. The thriving nightclub scene of 20 years’ ago has been replaced by coffee shops, independent craft beer shops and street food pop-ups. Across UK towns and cities the number of nightclubs has almost halved in a decade, falling from 3,144 in 2005 to 1,733 in 2015, according to the Association of Licensed Multiple Retailers (ALMR).
The disappearance of nightclubs ties in with the steady decline of British pubs over the past three decades. Whereas in 1982 there were 67,800 pubs in the UK, by 2015 this number had fallen to 50,800, its lowest level for 33 years.
Pubs are also shifting focus to cater for our interest in food. In the five years to September 2016, the number of food-led licensed venues in Britain increased by 13.5%, alongside a 12.4% drop in the number of drinks-led venues, according to ALMR. Nearly half (46%) of British consumers eats out at least once a week, while only 33% drink outside their home during the same period.
So, what does this clear shift in our night and day behaviour mean for brands in the food and drink sector? For drinks giant Diageo the answer is exploiting new spaces outside the traditional on- and off-trade environment.
“This encompasses everything from festivals to street food to coffee shops and even places like barber shops, all the way to multifunctional spaces such as shared work spaces, pop-ups and everything in between,” explains head of culture and entertainment (Europe) Leila Fataar. “It continues all the way to house parties to faster-and-faster home delivery.”
Diageo is pursuing a variety of partnerships that take its brands into “chameleon spaces”, such as Guinness’s tie-up with online music broadcasting platform Boiler Room at the Notting Hill Carnival in August. Guinness and Boiler Room partnered on eight sound systems – outdoor free-standing speaker systems on which live music is played continuously by DJs and MCs – throughout the carnival, as well as playing to a 200,000-strong crowd from the co-branded ‘Guinness x Boiler Room x Deviation’ sound system.
The live stream of the Guinness sound system was viewed by 2.6 million people and reached a further 36 million on social media, driving 500,000 engagements and 120 million impressions.
Having a wide portfolio enables Diageo to tap into a variety of partnerships and events, as well as create new products in response to changing consumer and cultural behaviours. The rise in popularity of fruit cider, for example, was the catalyst for the creation of Smirnoff Cider in 2016 and Pimms Cider in 2015.
“With consumers becoming more discerning in their drinks choices, technology powering new socialising and communication behaviours, new occasions and chameleon spaces, the food and drinks explosion and the rise of brand experiences and experiential, things are changing by the minute,” adds Fataar.
Creating an experience
To understand changing consumer tastes brands need to appreciate that the day and night time economy in 2017 has moved far beyond traditional “consumption settings”, says AB InBev legal and corporate affairs director for North Europe, Anna Tolley.
“It could be anything from hosting friends for dinner or having a couple of quiet [drinks] at your local down the road, through to international festivals, sporting events and other big-ticket social occasions.
“When it comes to food and drink, there has been a noticeable decline in people going clubbing. Instead, consumers are seeking more relaxed experiences, often with food, in bars and pubs, alongside their favourite beverages. Similarly, the hosting at home trend has become very popular and is now viewed as a premium occasion for socialising.”
She argues that far from being seen as a compromise, hosting at home has become an established, high-end experience focused on premium drinking. To tap into this trend during Christmas 2016, Stella Artois launched its ‘Hosting One to Remember’ portal with advice from influencers, celebrities and brands in the food or entertainment space, as well as creating limited edition champagne-style Stella Artois bottles.
Forging relevant partnerships is another way to enhance brand credibility. The Budweiser and Uber partnership over the festive period was AB InBev’s biggest UK responsible drinking campaign. Budweiser senior brand manager Aina Fuller explains the campaign, which featured Oscar-winning actress Helen Mirren, addressed the issue of drink-driving by taking a bold, disruptive approach to advertising that tapped into Uber’s mass popularity.
Events also provide a strong return on investment, according to Tolley, who cites Stella Artois’ headline sponsorship of Wimbledon 2016. The partnership extended beyond the tennis championship with ‘The Time Portal’, an immersive experience hosted in east London, which transported visitors back to Victorian London in search of the first Wimbledon.
“We have seen an increase in the number of consumers craving a ‘unique’ experience and wanting to be part of something different,” Tolley adds. “So for us, the challenge is around how we carefully pair our premium products, with relevant and unique experiences that meet our consumers’ needs.”
The new ‘local’
The UK consumes an estimated 2.3 billion cups of coffee a year in coffee shops, lending weight to predictions that by 2030 coffee shops will outnumber pubs in the UK – officially becoming the new ‘local’.
Worth £8.9bn, the UK coffee shop market grew by 6% in 2016 to reach 22,845 outlets, according to Allegra World Coffee Portal, which estimates that by 2025 the total market will exceed £16bn in turnover.
Branded coffee shop chains such as Costa, Starbucks and Caffé Nero continue to dominate, growing 6.9% in 2016 to reach 6,940 outlets and an annual turnover of £3.7bn, up 11.2% on 2015. However, Allegra expects small- and medium-sized boutique chains like Joe & the Juice to grow in popularity this year, by delivering “authentic, artisan concepts at scale”.
This is a positive environment for independent fair trade roasters like Union Hand-Roasted Coffee, which attributes its 19% sales growth last year to momentum in the coffee industry.
“It’s so exciting that coffee has suddenly become cool over the past couple of years and now the flat white is more popular than the hot chocolate,” says Union Hand-Roasted Coffee marketing director Kerttu Inkeroinen.
“Around 80% of UK consumers visit a coffee shop at least once a week and that’s predicted to rise. People are willing to pay more for quality coffee, as well as being more interested in what they are drinking.”
Having started off running tasting events at the annual London Coffee Festival, Union Hand-Roasted Coffee introduced its Coffee Club last year, whereby members are sent different coffees to try weekly, biweekly or monthly. The packs contain flavour notes and details of the farm where the coffee was grown.
As well as giving free training to baristas as part of its Campus at Union project, Union Hand-Roasted Coffee is planning to launch home brewing classes to help people grind their own coffee at home.
The company has seen growing interest in small, limited edition coffees across its range of 25 varieties. “Whereas in the past 80% of our sales were for our leading blend, now it is starting to shift and we see both café and home consumers buying different blends and single origin coffees,” Inkeroinen notes.
“A bit like in a bar you might have a guest beer, the cafés are starting to take single origin coffee in addition to the usual blend or having different offerings because consumers are asking where their coffee is from.”
Although Union Hand-Roasted Coffee started off solely servicing cafés and that remains the heartland of the business, the company’s rebrand 18 months ago took a consumer-facing view.
“People are willing to pay £3 for a flat white, so now they are starting to pay more for the coffee they drink at home. The home market is moving slower than the high street, but it is catching up and the majority of our online sales are whole bean [for grinding at home],” says Inkeroinen.
She expects consumers to invest more in coffee, upgrading from premium ground to roasting beans themselves, as well as taking an interest in different drinks such as cold brew coffee and cascara, a tea made from the dried berries of the coffee plant.
Becoming the talking point
The popularity of beer appreciation, combined with the explosion of the global craft beer scene, has propelled a variety of independent breweries into the spotlight. None more so than BrewDog, one of the industry’s biggest success stories of the past decade.
The Scottish craft brewery currently exports to 60 countries and operates 50 bars worldwide. Plans are underway to open its second brewery in Columbus, Ohio later this year to feed demand for BrewDog’s Punk IPA, the number one beer sold in UK supermarkets.
“People are definitely looking to trade in the mainstream, mass-produced beers for the massive range of flavours and beer styles the craft beer scene offers,” says BrewDog Task Force commander in chief, Sarah Warman.
“People want to learn more about all the elements that came together to create what is in their glass. It has also led to a more diverse range of beer styles becoming available across the board, as breweries experiment with more innovative approaches to brewing. It’s vital to keep up with the demand for new, exciting ideas that consumers are looking for.”
Events like BrewDog’s own beer festival CollabFest, where the brewery teams up with local microbreweries, all contribute to demand among consumers for new craft beer experiences.
“That means more tasting nights, more beer dinners, more opportunities to find out about beer and more visibility on the background, brewing process and breweries behind every beer available,” says Warman.
Conventional eating patterns and times have become more blurred as the demands of work and life change.
Adam Bowers, Busaba
Co-founder of London’s Brixton Brewery, Jez Galaun, believes that the success of craft beer relates to a wider desire for quality, satisfying experiences.
“Generally people are looking to get more satisfaction from the stuff that they consume, whether that’s coffee, cheese or craft beer. They also get more satisfaction from independents and companies with a story they can relate to even if it’s going to cost them more.”
Galaun agrees that consumers are becoming more knowledgeable about beer and therefore do not want to stick to just one flavour, which is why Brixton Brewery’s 2016 launch of a beer made with Japanese green tea and Jamaican hibiscus sold so well.
“That’s also why there can be lots of different breweries, we’re all selling to the same customers, but not necessarily at the same time,” says Galaun, who agrees craft beer lends itself to experiences.
“In my opinion the most interesting events are cheese or meat pairings, where you’ve got some interaction. Those experiences are more insightful because you’re showing people that beer should be regarded as a versatile premium product. It’s kind of like the ‘wine-nification’ of beer.”
As well as supplying local festivals, Brixton Brewery also sells direct to customers every Saturday at its taproom where drinkers can experience what it is like inside the brewery. “It’s vitally important and one of the things the big guys can’t do, to have that connection with customers,” adds Galaun.
“There are definitely more bottle shops opening and off licences traditionally dominated by wine sales are making more shelf space for craft beer, not just in London but nationally. This allows our customers to interact with our product in another way.”
Day to night dining
From interior design to menu choice, Thai restaurant chain Busaba is reacting to the growth in informal and casual dining, explains marketing director Adam Bowers. “Conventional eating patterns and times have become more blurred as the demands of work and life change. Their patterns become more flexible and extended.”
To appeal to daytime customers Busaba has made its décor lighter and developed a lunchtime menu of one-pot meals for under £10, as well as offering free Wi-Fi and a wider number of power points for people working over lunch.
Then to cater for later dining patterns Busaba has extended its opening hours to 11.30pm and put dedicated bar space back into its restaurants to encourage consumers to stay for drinks before or after their meal.
“This is beneficial to cater for groups looking for longer dining occasions or even guests looking for later reservations, after being at a show or the cinema. We’re exploring even later opening hours following the launch of the 24-hour Tube,” explains Bowers.
“We see extended all-day dining as particularly important and not something we have cracked yet. Developing brunching opportunities driven by wellbeing is of particular interest. We also see a growth in group occasions being a significant part of our business. Comfortable spaces and flexible dining offers are particularly attractive to younger guests looking for new dining experiences.”
Bowers expects the company’s relatively small on-demand market to accelerate in 2017 and therefore plans are in place to invest in its ‘Busaba to go’ takeaway offering.
24-hour in an on-demand world
Aimed at rejuvenating the capital’s night time economy, the introduction in August of the 24-hour London Underground Night Tube service on Friday and Saturdays has contributed to a “notable growth” in spirits sales in the city-centre according to ALMR. This corresponds to an uplift in the consumption of wine, champagne and soft drinks in the outer Tube zones.
The early success of the Night Tube indicates a demand for extending the night time experience. UK marketing director of takeaway delivery app Just Eat, Ben Carter, expects 2017 will see the emergence of more 24-hour restaurants or restaurants that deliver throughout the night.
“We have seen restaurants appear on the Just Eat platform that don’t have a customer face, so they are purely there to cook and deliver food and they can operate very much on a 24-hour basis,” he notes.
“You will also start to see people ordering through different devices. We’re already on the Amazon Alexa platform and we’ve got an Xbox app. It’s about the combination of people wanting food any time of day or night, and being able to access that on as many different devices as possible.”
Carter argues that the traditional day and night economies are blurring, as consumers expect to reach brands 24-hours a day at the touch of their fingertips. The aim is therefore to be able to serve this desire in as seamless a way possible, a major reason why Just Eat uses the behavioural data captured by its CRM system to personalise its marketing and make the app an editorial experience.
“We need our platform to give you ideas of what you might want to eat, like signposting informing them of the top trending cuisine or which new restaurants have signed up. So it is about being a more curated and editorial experience,” Carter explains.
For Pizza Hut, the foodie trend translates into consumers ordering takeaway food more often, yet still wanting a restaurant experience in their homes which ticks all the boxes of being quick, competitively priced and good quality, explains UK and Europe chief sales and brand officer Adrienne Berkes.
“We have adapted our offers to cater to that. The ‘Pizza of the Day’ brings to life the idea of a ‘restaurant special’ in a delivery context. Obviously the pizza is a key part of our offering, but just as important is making sure consumers have the opportunity to be entertained at home, much like if they went out.”
Pizza Hut has experienced success with partnerships and bundle deals, such as offering consumers a Now TV pass when they purchase a £14 deal or giving them the chance to win a PlayStation 4 game system when buying a Champion’s Bundle.
What unites all these brands is the need to serve consumer desire for interesting, premium experiences. Whether that is the food they eat or the coffee they drink. Whether they want to order Lebanese cuisine at 3am through their Amazon Echo or go out for dinner at 11:30pm. As the daytime economy is blurring into the night, brands will need to keep pace with consumer demand for value added experiences on demand.