‘Pub’ is the buzz word for Diageo, says sales director

Ronak Mashru, who has worked in various roles at Diageo during the past five years, but has been in his current job for almost two, is passionate about the pub trade, which is made clear by the venue where he suggests we meet.

The Misty Moon in Northwood, in Hillingdon, north-west London, is an example of a pub that makes every effort to squeeze money from every minute of the day. And it’s this sort of mentality, Mashru says, that should be replicated across the rest of the trade.

In the run-up to St Patrick’s Day, for example, the Misty Moon’s licensee Jennifer O’Keeffe displayed a diorama of leprechauns, Irish dancers and pots of gold — a dramatic spectacle that kept the punters talking and coming back. There was also, to Mashru’s satisfaction, a massive push on Guinness, as well as lots of other events in the lead-up to the big day.

Although he is a big fan of pubs and eager to highlight the successes of his local, the former stand-up comedian realises the past few years, for many pubs, have been no joke. Those that survived the darker days — the smoking ban and the lengthy recession — still have to diversify and are likely to have a stronger future if they continue to think of new ideas to make more money throughout the day.

“The thing that’s really clear is the importance Diageo is placing on the pub and the on-trade in particular,” he says. “You feel a buzz about the on-trade now. Everyone felt the pinch of the smoking ban and the economic conditions. There’s a feeling that, if you’ve survived the past few years, then you’ve done something right and there almost seems to be a renewed energy with our customers right now.”

A big part of the trade’s future lies in high-quality drinks, skilfully served by well-trained staff, he believes. Diageo’s Spirits Revolution — a campaign championed by the Publican’s Morning Advertiser, which aims to help pubs and bars take advantage of rising consumer interest in spirits — focuses on up-skilling bar staff as well as providing pubs with sound business advice and guidance. More than 20,000 bar staff have been trained through Diageo’s Bar Academy since its 2011 launch.

What cocktails?

Spirits fit the consumers’ increasing appetite for theatre and better quality drinks, Mashru points out. In the US, a third of all alcoholic drinks served are spirit drinks, it was around a quarter 10 years ago, he explains.

“In the UK it’s at about a quarter now and we’re already starting to see spirits sales here rocket like they did in the States. London, I think it’s fair to say, is now the cocktail capital of the world. I know that’s just London, but the trend for cocktails has already spread across the UK.”

He’s right, last year, spirits was the fastest growing drinks category in the on-trade, according to recent trade data. Total spirits sales were up 5.9% last year when compared with 2014 levels, which was driven by rising consumer demand for better quality drinks, according to the review. But pubs shouldn’t just think about cocktails when it comes to boosting spirits sales in their businesses. Driving more sales of spirits and raising interest around your spirits offer could come from something as simple as serving a mixed drink perfectly, he suggests.

“I’d like to see every pub become famous for at least one drink,” Mashru says. “It could be something simple like doing a G&T really well and that means serving it in a clean glass with lots of ice, a nice tonic, with a good gin and a garnish that sets it off.

“People now expect even a high-quality mixer, they want to know a bit about what they’re drinking and they want to know that it’s been made by someone who is skilled. I talk to people a lot about bar staff being the stars of the show. People are much more likely to have a second drink in your pub, particularly a spirit and a mixer, if their first one has been served well by a knowledgeable member of the team.”

Once the basics have been mastered, though, you could attempt to perfect a simple cocktail and even create a signature drink. It may consist of just two or three spirits with a mixer. But, importantly, getting the serve right on any drink is key because if it’s served poorly, the customer is not going to come back, he says.

“Getting the spirits offer and serve right, for pubs, means two big things. First, the customers are more likely to come back. Second, it’s better for your margins. It’s very difficult to run a pub business and if you look at the margins on spirits compared with beer, it’s much higher.”

However, it is easy for Diageo to suggest how licensees should boost their own business, but what else is the corporation, which produces top-selling brands Smirnoff, Guinness, Baileys and Johnnie Walker, doing to support the on-trade? It all gets a bit technical, as Mashru reels off several of Diageo’s past and present marketing plans to help boost trade in pubs.

New staff to sell brands

For example, more than 20 new staff members were recently hired to go into the trade and talk about Guinness, which includes giving licensees advice on how to keep the beer at its best. Mashru says: “Maybe outlets aren’t selling a lot and need a 30-litre keg instead of a 50-litre keg.” The new ‘feet on the street’ are also there to discuss marketing materials and share information about the brand’s ingredients, history and new products, such as the recent launch of Guinness’s ales and porters.

The more ‘feet on the street’ approach also applies to Diageo’s many other brands. While having more representation in pubs may not sound innovative, other approaches to boosting Diageo’s presence are a little more technical.

“I call it i-marketing — I’m sure that’s not the phrase — but we’re doing more in terms of digital and proximity marketing,” Mashru says. “During the summer in London last year, we had digital marketing boards that lit up with Pimm’s advertising when the temperature rose over a certain point. There was also a message that said ‘enjoy a Pimm’s at the pub 20 metres down the road’.”

He admits that such tactics won’t work for every pub, but reveals ongoing work with Google to ensure that when someone searches for the nearest beer garden, drinks options for the pubs that appear in the search results are also available.

Mashru also points to the regular research the company carries out as part of its business support function. Recent information suggests food-serving pubs should tap into the £100m food and cocktail pairing opportunity. While the firm is drinks-focused, the casual-dining trend isn’t one that’s gone over its head, he says. Sales of cocktails grew by 6.5% last year and about 10% of consumers in a casual-dining venue had one with their meal.

“With that in mind, it’s definitely an area that foodie pubs should be looking at and thinking about in the long term. Imagine being told about what cocktails go best with what dishes in a gastropub.”

And that’s what Mashru means when he talks about pubs putting business-boosting bright ideas into practice. “Successful pubs are working out how to generate revenue across the day more often and being creative by doing things out of the ordinary. We want to work with customers who are like that,” he says. “It’s hard to be successful in the pub trade, but there are so many examples of how it can be done and that’s why there’s a buzz about pubs at Diageo.”