Inside Retail: What are the liquor trends you foresee in 2021?
Norrelle Goldring: The already strong trend toward healthier options has been turbocharged by the Covid lockdowns earlier in 2020. Illuminera has run a number of studies that have shown that consumers were indulgent in both alcohol and snack consumption early in lockdowns, essentially treating themselves in the absence of being able to go anywhere and whilst working from home was still a comparative novelty.
Consumers are now looking to both scale back their drinking and snacking a bit, and – more predominantly – swap to healthier options (obviously there is always a gap between what consumers think they will do or want to do, and what they actually do). This active desire for healthier options can only be a good thing for no and low alcohol beers, wines and spirits and for low sugar and carb options, such as the fast-growing hard seltzers, and potentially the more niche hard kombuchas. We would expect to see an acceleration of all of these in 2021 versus 2020.
Inside Retail: What liquor products do you think will be a hit in the upcoming year?
NG: Hard seltzers. They are already impacting ready-to-drink [beverages] and ciders. Then there’s low and no alcohol beer and wine for the ‘healthier options’.
In all the studies we ran in 2020, as a result of the early 2020 bushfires and then the pandemic, we saw an overwhelming consumer response to support local – this means macro Australian made, and also micro local (down to regions and suburbs). We are seeing consumers want to support, for instance, the craft beers manufactured within 10km of where they live. This may result in a tap beer brand rationalisation in the on premise and a reshuffle of slow moving non-local craft beer lines in the off premise.
IR: How has the lockdown affected the business?
Alex Freudmann: When Covid first hit we really had no idea of what it would mean for Dan’s. However, straight away, all these great ideas started to flow and people stepped outside of their day jobs and made things happen. Covid-19 has changed the ways our customers discover and shop not just in 2020, but for the foreseeable future. As retailers, we have had to adapt and innovate to meet their needs. We are using technology to offer increasing convenience to customers, and Covid has accelerated the demand for innovative ecommerce solutions. Through Covid, we are more in touch with our customers than ever before. Customer-centric-led businesses are the only way forward.
Alex Howard: We have noticed an increase in demand for at-home-drinking as well as online retail. Consumers also seem to be spending more time on social media, which means they receive more exposure to our online advertising, as well as seeing more industry trends.
IR: How did the business adapt to the pandemic as it impacts most businesses worldwide?
AF: We rolled out contactless direct-to-boot service, which means customers order online, drive to store and stay in their car while their order is placed in the boot by a team member after RSA checks are completed. Although it started as a response to the pandemic, because it has been so popular, we have decided to make it a permanent service at the majority of our stores.
In August, we launched an Australia-first at our Dan Murphy’s drive-thru in Manly Vale; direct-to-boot service which uses number plate recognition technology to make the experience even faster and more seamless for the customer. In December, just in time for the festive season, we also introduced Q-tracker, a web tool that uses real-time data to show customers whether stores have a queue. It helps customers and team members have a covid-safe and convenient experience. The Q-tracker will help customers plan their shopping, beat the queues when a store has reached capacity due to social distancing measures and help everyone have some peace of mind.
IR: What are the new drinking habits of consumers?
AH: Definitely the ‘better-for-you’ movement. Buying decisions are being influenced by social media trends and therefore this becomes a major platform in our marketing strategy. We have also noticed that consumers are much more likely to plan ahead for their drinking occasions, which means that they are more willing to spend money on premium products that can be delivered to them directly.
AF: When it comes to wines, curiosity reigns supreme with wine lovers increasingly exploring emerging varieties with Fiano and Grenache leading the way. In beer, we expect to see food-inspired beers – like bread beer and black forest stout – as well as sour beers to increase. The seltzer trend will continue, as we continue to see more Australian and international drinks producers jump on the trend and experiment with a greater variety of fruit flavours.
IR: Will bars be able to make a comeback as the lockdown eases over the next few months?
NG: Some will not survive the lockdowns and the reduced capacity limits which compromise financial viability. We would expect to see a reduced on premise outlet universe going forward. The surviving remaining outlets should see an uptick in trade, particularly from consumers looking to experiment.
It will be interesting to observe whether the 2020 trend of in-home cocktails switches into on premise consumption, or whether a residual level of at-home cocktail consumption remains.
In the vast majority of cases, according to our research, consumers expect covid-safe venues and are unlikely to return to a venue with noted unsafe practices.
IR: What are some of the new products or services that you see rolling out in 2021?
AF: We are investing in our digital experience and new store formats, and we are partnering with [the] best producers around Australia and the world, so expect lots of exciting new innovations from Uncle Dan in 2021!
AH: We will be looking to do exclusive flavours and brand collaborations as well as keeping on top of new seltzers coming to the market. Our aim is to be a one stop shop for all hard seltzers.