Almost 18 months ago in this column, I wrote about “the Shoreditch drinker”. Inspired by Kopparberg’s slow-burn plan to gain traction by getting key influencers in the ‘cool’ areas of the capital city, the phrase sums up a strategy that a number of companies have tried to follow.
Some numbers unearthed this week by my colleague Chris Dillon about this strategy cast some doubt on whether it is always successful. Chris came away from a pre-Christmas briefing with a big alcohol supplier with some thoughts on how this market works.
Alcohol is bought by 90% of households – but only 30% buy in convenience stores. It represents a massive chunk to go and grab for small stores.
According to them, only 30% of consumer behaviour is built in the on-trade. There are notable successes – Jägermeister and some craft beers spring to mind. These successes mean that watching what happens in the clubs and bars down the road from you, and asking your younger customers what they want to see on your shelves, are crucial.
But it also tells us that what we need from the big alcohol companies is real support for launches – trust and belief that the ever-growing and rapidly professionalising convenience store sector is the place to launch a new product.
Diageo has identified a real opportunity in convenience. Alcohol is bought by 90% of households – but only 30% buy in convenience stores. There are probably a huge number of reasons for this – loss-leading prices charged in supermarkets an obvious one, a potential lack of marketing by c-stores another – but it represents a massive chunk to go and grab for small stores.
A company like Diageo working the maths out and putting their money where their mouth can only be welcomed. They calculate that every Retail Express reader turns over, on average, £71,000 a year in alcohol sales alone. Fifteen per cent of a convenience store’s turnover is alcohol. So firstly, it’s worth benchmarking your sales against these figures.
Diageo claims it can up this by £9,000 per store, meaning that secondly, it’s worth looking at this opportunity. Forget the Shoreditch drinker, and ask your own shoppers what’s missing. There is always room to grow.