Wholesalers are getting better at serving the on-trade, but a lack of supplier support could be stunting progress. LINDSAY SHARMAN and ELIT ROWLAND look at the three things wholesalers must do to grow business with pubs.
Pubs are increasingly on the look out for a one-stop-shop to cover their needs, giving wholesalers a fantastic opportunity to cash in. But if you want to grow sales with publicans, there are three key areas you need to address: marketing – are you communicating to these customers in the right way?; support from suppliers – should you be pushing for the same prices and promotions as on-trade specialists?; and food – the pubs performing well are smashing food sales, so are you offering the right menu-support and range? Over the next few pages, we will look at these three essentials that will get publicans racing through your depot doors.
Challenge One: Marketing and communication
Although some independent pubs have cracked the food market, many have yet to tap into its potential, meaning there’s a definite opportunity for wholesalers. But there are challenges to overcome, starting with a lack of information about how pub customers want to be communicated with.
“Despite having sales of more than £180m, we simply don’t know where to begin with pubs,” says the managing director of JJ Food Service, Terry Larkin. “We just don’t know what they want – whether it’s innovation, promotions, a better range or 24-hour service. And how do they want this information? We need to know what the best way is to communicate with them.”
Of the 10 publicans we spoke to, four said that they would prefer more face-to-face contact from suppliers which is increasingly being replaced by emails and calls nowadays. “In the past, you’d have an area manager visiting with deals – I miss that,” says Caroline Lingley from The Five Bells in Colne Engaine, Essex.
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7 WAYS TO WIN WITH PUB CUSTOMERS
- FACE-TO-FACE ENGAGEMENT: Pubs want face-to-face engagement, which has died out in recent years – sending out field sales reps could give you an advantage over your competition.
- PUSH FOR PROMOTIONS: Work together with buying groups and other related associations to encourage suppliers to give you the same prices and minimum orders as on-trade specialists get.
- GET EQUIPPED: Stock the right equipment to support promotions, such as platters, glasses and napkins, and run regular giveaways on equipment, which is particularly popular with publicans.
- DIVERSIFY: Work with suppliers to see how you can help customers to capitalise on opportunities other than lunch and dinner, such as breakfast and afternoon tea.
- MEAL DEALS: Inspire customers with ideas for meal deals, themed nights, and national or local events. It could be a good opportunity for cross-merchandising.
- ENCOURAGE LOYALTY SCHEMES: Helping pubs to offer a loyalty scheme, such as a rewards card, will encourage repeat visits by their customers, especially those with families.
- MASTER THE MENU: Work with customers to develop their menus in line with their customer bases and market positioning.
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Personal contact is particularly important if you want to get a new relationship off to a good start.
“When I start with a new wholesaler, I expect weekly or fortnightly visits while we iron out the wrinkles,” explains Steve Herbert of The Old Spot Inn in Dursley, Gloucestershire.
“I prefer a knock on the door to an email or a call. The best experience I ever had with a wholesaler was when the head brewer from Fuller’s [Griffin] Brewery came to a ‘meet the brewer’ evening at my pub. He spent the evening answering my customers’ questions and sent them away with goody bags at the end of the night.”
The general manager of the Shibden Mill Inn in Halifax, West Yorkshire, Glen Pearson, says he’d also like to see more regular visits from field sales reps. “We don’t get as many visits as we used to five or 10 years ago, or promotional things like glassware.”
Challenge two: Promotions and prices from suppliers
For wholesalers with a strong field sales team, there’s an opportunity to grow business with on-trade customers. But getting suppliers to see the channel as a valuable route to market is a hurdle.
“Our members’ businesses are driven by kegs and casks of beer, which are more the domain of on-trade wholesalers,” explains Martin Williams, managing director of wholesaler Landmark. “However, our members and the likes of Booker are beginning to offer an improved service with range and promotions – we need more support from suppliers.”
Sanjay Thakrar, director of on-trade wholesaler HT & Co Drinks, agrees that the treatment he receives from suppliers is different to what on-trade specialists get. “Suppliers don’t see us as a key route to market, which is why we don’t get very good deals with kegs. They’re reserved for the breweries instead.”
But while suppliers believe they are protecting their businesses by maintaining differential terms, there could be potential problems as traditional markets become more “blurred”, according to David Armstrong, formerly head of buying at Makro.
“I recently filled up my car with petrol at a Spar forecourt and had a choice of where to buy my sandwich: the Spar shop, a Subway or a Starbucks. The perceived market structures between retail and foodservice are breaking down and by maintaining differential terms, suppliers may be executing a Canutian strategy that will eventually drown rather than protect them.”
With more pubs looking to their local cash & carries and delivered depots to be one-stop-shops, wholesalers have a strong case with suppliers about why they should have access to the same deals and promotions that breweries and on-trade specialists get. Speak with buying groups and related trade associations about how they can help.
Challenge three: The opportunity of food
While support from suppliers is critical, the next step in building business with pubs is to make sure you’ve got the right ranges, particularly food.
Food has become of an integral part of managed pubs’ business models. Last year, food sales accounted for 30% of JD Wetherspoon’s total sales, 48% of Mitchells & Butlers’ and 74% of Whitbread’s.
Promotions are important: JD Wetherspoon has a breakfast offer that includes coffee, breakfast and Wi-Fi for people on the move; Beefeater has an all-you-can-eat breakfast until 10.30am that capitalises on nearby Premier Inns’ guests.
Louise Birchall, managing director of delivered wholesaler Birchall Foodservice, says other occasions and time slots are ideal for pubs to work with, too.
“Pubs can open from 9am until midnight so there are different occasions they can cater for. Serving afternoon tea will tap into the ‘grey pound’ – retired men and women. Plenty of cafés and coffee shops close at 5pm so it gives pubs another market to target.”
Birchall says that although managed pubs are leading the way when it comes to diversifying, independent pubs are perfectly placed to follow suit.
“They are open to ideas and quite diverse – they can reflect very quickly and act on something that needs to change.” Communicating with your pub customers is an essential part of the process, too. Wholesalers “should be thinking about things like open days or summer parties”, according to research consultancy Horizons’ managing director Peter Backman, to connect with customers and communicate what they are doing to work with them.
“The important thing for wholesalers is to be on the side of pubs: understanding the business and offering advice will give customers the impression you care about the sector in general and about the publican as an individual.”
