MyShout

In the trade's parallel universes, ensure revenue comes before volume, says

Tony Jennings

We all know there's an on-trade and an off-trade, and that they work like parallel universes, with their own dedicated professionals, rules and conventions and their own routes to market.

As everyone in the brewing industry knows, that division is fundamental to the smooth functioning of our world, even if a bit of overlap occurs here and there via wholesale outlets such as cash-and-carry firms.

The only problem is that in accepting this dual existence, so many brewers and brand owners seem to think that those focal-points of our existence - the drinkers, the consumers - are also inhabitants of this parallel universe, their behaviour, buying patterns and expectations shifting according to whether they find themselves in the "on" or "off" world. I have also noted that many marketing people prefer their consumers to be in some kind of dedicated situation - one where they focus completely on the on-trade or off-trade, in a distinctly one-dimensional fashion.

Of course, that's nonsense. What we're really talking about are individuals whose life-style, more likely than not, includes buying drinks for home consumption at their favourite supermarket or off-licence as well as with their pals in their local.

This is where the problem arises for those brewers and brand-owners who work on the never-the-twain-shall-meet principle, especially if they have allowed their brands to be sold in the multiples at prices that are possibly lower than the cost of production.

Being expected to pay £2.50 for a pint comes very hard for a consumer who has bought a particular beer at a ridiculous knock-down price in the supermarket. The upshot is that on-trade sales of that particular brand suffer as it becomes perceived as a rip-off and certainly not as a positive life-style symbol.

Of course an enormous number of social problems, such as underage and binge-drinking, are attendant on the off-trade's stack-'em-high and sell-'em-cheap philosophy. As an accountant, I am very much of the opinion that if you look after the pennies, the social issues will look after themselves.

By that I mean that if you make sure you put revenue before volume in the off-trade, you will not make the mistake of unwittingly repositioning your product as a cheapo brand in the eyes of consumers.

And when those customers switch identity to become on-trade consumers, your charging £3.50 a pint for the same product will seem perfectly acceptable to those drinkers.

If only the brewing industry were to take a more holistic view of the consumer and acted accordingly, we would see the end of bizarre price-deals that do nothing for the reputation of the brands concerned, only causing the beer trade further damage.

That's not to mention providing the ever-growing legions dedicated to legislating us all out of existence, beating us with an ever-bigger stick.

Just remember it's revenue not volumes that ultimately count and the rest will fall into place.