Can new product innovation arrest declining sales?

Drinks producers need to focus on developing new products in order to target changing consumer demographics among pub goers, according to a new report.

This report, by market researchers Mintel, supports another, by the British Beer & Pub Association (BBPA), released this week in painting a gloomy picture of declining drinks sales in the on-trade. However, Mintel also suggests a new generation of drinkers coming through that the on-trade can capture as a way to redress this.

It projects an 11 per cent increase in the number of 25-34-year-olds by 2013, compared to a two per cent decline since 2003.

"With younger people more likely to go out and experiment with different drinks, this presents an opportunity for drinks suppliers to build brand loyalty among the next generation of drinkers," the report says.

It also projects that 43 per cent of the population will be over 45 years old by 2013, and says "the on-trade needs to consider how it positions itself to be more attractive to older users. The general trend over the past 5-10 years has been to modernise to attract the younger drinkers - it is time the same thought and effort was made for older drinkers.

"The maturity of most market sectors means that new product development is a key feature, sustaining interest in established sectors and in some cases rejuvenating product categories."

This work appears badly needed. Mintel's report forecasts that alcohol sales in the on-trade will decline 22 per cent in volume, and 17 per cent in real value by the end of 2013. The volume of alcohol sold in the on-trade has already declined 10.4 per cent since 2005, it claims.

It comes as the BBPA's quarterly Beer Barometer found beer sales in pubs, bars and restaurants have dropped 8.1 per cent between July and September year-on-year.