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Upselling

Customers want to be inspired and have an experience they can't replicate at home. They want something new and exciting with great service and quality.

Down

ENCOURAGING TRADE-UP

More people spending more on spirits

10 serves
per day per outlet
up by 50p

or

5 serves
per day per outlet
up by £1

With standard spirits performance flat and premium spirits in 9% volume growth the trend of "Premiumisation" is one that is here to stay. To increase value sales in an outlet we need to encourage "Trade Up" to a more premium brand.

Source: CGA on trade report MAT to 28/12/2013

+£219m
category sales

Source: CGA Total On Trade, Average Wtd Price per 25 ml measure 5.10.13

FOCUS ON PREMIUMS

Source: TNS Omnibus Research 2012

 
People

OVER 1/3
of people would buy a premium brand if it was recommended to them

 
People's chart

54%
of people agree that premium spirits  brands are a sign of a quality pub/bar

 
People chart

65%
of people agree that they would be willing to pay more for premium spirits

 
People's Chart

49%
of people agree to be drinking less, but choosing higher quality when they do

Standard    Premium
£13.15 Bottle £16.03
£2.50 Sell £3.40
£42.85 Profit £60.13
     

By upselling to a premium brand this could deliver on average an incremental profit opportunity of
£1,825

£219m Category Sales / 120,000 On Trade outlets = £1825 - Based on CGA total trade servings and average price data

Disclaimer: Bottle price based on 70 cl Diageo sell in price to MCW +10% on standard and +15% on Premium. Licensee profit is minus 20% VAT. Prices shown are used as an illustration and are not an indication of what the price for a spirit should be. All sell prices refer to a standard 25ml serve, based on Total On Trade CGA data, Average Wtd Price per 25 ml measure 5.10.13

Conclusion

Encourage Trade-Up, More people spending more on spirits.
Focus on Premiums - "Premiumisation" is a trend here to stay.
Upselling to a premium brand could deliver an incremental profit opportunity.