‘Cheers’ to change: How evolving drinking trends are transforming the pub experience

Hospitality is the oldest industry in the world - but there’s no denying it has been a tough few years for most in the sector. While many still had the benefit of Covid loans and reduced rents in 2022, last year was characterised by uncertainty, with a raft of challenges to overcome: inflation, high interest rates, extreme energy costs, rising minimum wage, worried customers cutting back on non-essential spending, and rising beer prices saw sales and margins across the sector drop.

2024 didn’t start in spectacular fashion, but slowly this year we started to see a recovery in both business and optimism. A snap election caught most by surprise, but England’s progression to another Euro Final was not, and gave the pub and restaurant sector a welcome £1 billion pound boost. People started going out again - not at pre-pandemic levels, but now they go “Out Out” and spend more when they do, wanting to be wined and dined. We have also seen investors coming back into the sector, especially in pubs, with operators acquiring and developing food-led pubs across the UK.

One thing has become clear: innovation is key.

The buzz word in the industry currently is providing an experience. This can be in many forms, from axe-throwing to stunning fitouts which are “Instagrammable”.  This section of the market has grown 29% over the last year, as consumers want more to tempt them off the sofa.

Operators should consider tapping into the growing demand for competitive socialising activities such as bowling, darts, mini golf, go-karting and karaoke, to attract customers to the pub for reasons other than consuming alcohol.

The growth in “staycations” and the grey pound that has enjoyed better rates on savings has seen many operators look to develop bedrooms above or around their premises. Heartwood, originally founded by Raymond Blanc, has focused on acquiring character buildings with rooms to target this more reliable market segment.

Maybe as a result of Covid, gardens have become more important, with outdoor pods, heating and table service making them all year-round spaces despite the unpredictable British weather. Immersive events like live music, mass sporting events, and food and drink festivals attract customers through the door.

It’s also becoming clear that Gen Z, those 27 and under, are less loyal, preferring to try new concepts and seek out something different. As such, operators have to be rethinking their offer to be the next trend.

Another area which is really undergoing a transformation is drinking. For a number of reasons, people don’t want to fall over as much anymore, so the growth in Low and No alcohol drinks is accelerating. The taste has improved, the variety is there, and in many cases people prefer it to the real thing.  This is where pubs are now focusing, to maintain custom from the younger generation who don’t want to drink to excess.

Recent research shows that older people are most likely to drink, while around a quarter of 16 to 24s are teetotal. Under 30s are starting to find boozing at traditional pubs and bars Intimidating, and instead want safe spaces where they can socialise with friends and enjoy memorable experiences.

Another obvious step for operators then is to expand the range of low/no alcohol beverages available, including beers, wines, spirits, and cocktails, to cater to a diverse range of taste preferences. The quality of low/no alcohol drinks has come a long way but typically, still only third of beverages on offer at venues are non-alcoholic, and margins can be higher.

In my work at Christie & Co, I am excited to continuously see operators trying out new trends and concepts that keep the UK pub scene thriving. Many are just re-inventing the wheel with a trendy new take (I mean, how many years have there been darts boards in pubs!) but all are aimed at attracting people through the door.

Pubs have proven to be an important part of the fabric of our communities, however consumers are more health-conscious than ever. The low/no alcohol trend is here to stay, and venues need to get on board, to better serve those looking for alcohol alternatives and keep them coming back for years to come.

With dramatic headlines, and talk of a pub crisis, many have been put off investing in the industry. In fact, the reality is that, whilst the news shouts 50 pubs a week that are closing, even the real ale campaigners CAMRA admit we lost fewer than 200 pubs permanently last year and we still have a steady flow of entrepreneurs keen to buy their own pub.

For owners and operators, the message is clear - pubs need to adapt to capture the hearts and minds of Gen Z, who are already redefining the future of pubs.

For more information contact:
Simon Chaplin, Senior Director - Pubs & Restaurants
P: +44 7764 241 351
E: simon.chaplin@christie.com