Premiumisation: capitalise on the trend

If consumers are willing to pay more for what they drink, how do operators capitalise on that trend? Is it enough just to stock a range of premium brands?

Not really, says Andy Gaunt, director of Source Consulting Solutions.

For Gaunt, it’s important that operators wishing to sell premium products create an all-round premium experience for their customers that goes beyond the drinks brands behind the bar.

“When you’re selling the more expensive stuff in your venue, you want to be delivering the experience that is complementary to that in order to encourage a sense of value for the consumer,” he says. “That in turn encourages repeat purchase and good word-of-mouth and all of the things which result in good margin for the retailer in the first place.”

Gaunt talks about creating “ritual and theatre” as part of that experience, particularly when communicating stories around brands and drinks.

“I still have a bit of a bugbear about a gin and tonic that’s costing me one-and-a-half or two-times as much as a house gin and tonic that’s served to me in the same glass, with the same amount of ice, and pretty much a similar garnish to the house gin and tonic,” Gaunt says. “Okay, the liquid inside might be better, but it’s about people’s desires to trade up, it’s more than just the liquid or the product. It’s the other sets of feelings.”

The theatre doesn’t have to be supremely complicated, either. It could mean premium glassware, a sphere of ice or a choice of tonics, for example.

“I think we’ve seen that sort of ritual come out of Spain, with the shift to the ‘copa’ style of glass, the rounded wine glass, as a way of delivering a more elegant drink,” Gaunt points out. “If you talk to anyone that’s worked in Spain, they’ll tell you that’s been one of the most important factors of the gin category exploding – that creation of a ritual serve that is different from the norm.”

The operator

The gin-oriented Barber Shop (pictured) in Sydney offers that kind of theatre. “We have some crystal tumblers that are pretty expensive,” owner Mikey Enright says. “We use those for the vintage gins we have. So if you order a vintage gin and tonic you’ll get that in a crystal tumbler with all the condiments.”

These premium G&Ts are priced between $27 and $36; there are six variants available and they do sell.

Enright agrees good bars need to offer a holistic premium experience. “It’s about chilled mixers, the right ice and nice glassware. And it’s about the touch and feel of the place,” he says. With The Barber Shop, it’s also about range.

“We have gins that you can’t buy in Australia so we pride ourselves on having some really cool brands that you can’t see everywhere else,” he says. “We have a tonic list as well; so you spend an extra dollar and you get a choice of four different tonics.”

Enright estimates between 8-10 per cent of G&T consumers will trade up to a premium tonic. Generally, customers will need to be prompted to do so, but Enright urges caution when it comes to the hard sell.

“We do train staff to recommend something premium but I’m also wary of upselling. You want people to feel relaxed when they’re in the venue and not feel like they’re being pushed into something,” he says. “I like to keep it subtle and you need to read the signs of the guest. Some people do want to have that experience but some people don’t.”

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