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Touching The Void

“standfirst”>CGA-Centro has launched itself into the ‘information black hole’ of the on-trade to transmit valuable data back to the outside world. Are we ready to deal with what we might find? asks Patrick Schmitt

Accurate market data and the ontrade are two things that just don’t go together. Somehow all the useful information gets lost in the murky world of cobbled streets, village pubs and underground clubs, meaning many brand owners just don’t know what is being consumed and where. It’s like a sort of boozy black hole – you throw all these bottles at it and they just get swallowed, with nothing to show for them, not even an occasional belch in the way of feedback.

But it seems there is something out there constantly and closely monitoring the 140,000-plus licenced premises in the UK, tracking and accurately reporting exactly what is drunk and exactly where, and it’s called CGA-Centro. It was set up to fill the information void in the on-premise at retailers’ and drinks suppliers’ requests. They wanted “at least a decent name and address file for all the UK outlets,” according to Martin Cullen, co-founder of the company, and ex-employee of ACNielsen. “Yes it’s fragmented,” he says of the market, “and most importantly it’s very changeable. It’s not the sort of market you can come into and say ‘We’ll blitz the thing and get an understanding of it this year and then it can be okay’. Unless you’ve got a commitment to keep pace with the change you might as well not bother.”

For this reason Cullen has a team conducting constant field and telephone research, as well as an arrangement with major customers who supply, if they are a retailer, their estate list, and if a drinks supplier, their delivered-account details. The input from these major players “means we are able to refresh and confirm about two thirds of the trading market, so that our own resource can focus on those bits of the trade you can’t otherwise find out about – independent pubs, small restaurants, sports and social clubs,” he says.

CGA-Centro has a number of key products, starting with its “Drinks Places” which is a database of all licenced outlets and “the cornerstone of the business,” according to Cullen. “It has the name and address, the phone number, the ownership profile, the type and style of the outlet, size indicators and facilities, like garden, car park, dance floor,” he explains.

Price watch

Then the agency provides a product called “On Prices” which is a “a sample-based field survey run every quarter which monitors product distribution and price,” while the third key product is “Centro” which concentrates on high-street outlets and “looks at capacity, consumer profile, and internal decor – it is a very in-depth picture which includes photos of the outlets as well.”

Other services include “Lodestar”, which is a “variation on Centro that looks at a local marketplace and gives some additional consumer insight based on in-venue group interviews”. Another is called “On Target” which focuses on a handful of brands and tracks their performance; and then there’s “Radar” which is “an early warning system which tracks venues and products coming into market. “In the case of venues we do it via field research, and we buy into databases of developments that are taking place – either brand new builds or refurbs – and that enables us to forewarn our customers of licenced outlets that are going to come into the market within three to six or even 12 months’ time,” Cullen explains.

For the drinks supplier, certain aspects of the research agency’s information can be used to assess how a brand is performing nationally compared with other products in its category, and in surprising detail. For instance, one could use CGA-Centro’s “Visibility Audit” to monitor the back bar. “This takes a look at the number of taps for draught products, the number of optics for spirits behind the bar and the number of fridges and faces of brands in each fridge, and which brands are being promoted in or behind the bar,” says Cullen. He says it gives the brand owner a “share of space analysis”.

The retailer, on the other hand, can use collected data to “try and understand price and product mix profile of their outlets compared to the locality they are operating in. They might also use us for site selection, valuation, or site disposal,” says Cullen.

Cullen notes in particular the anomalously high regional variation in the on-trade, which isn’t present in the grocery field, either in terms of product or price. He reports, “Strong regional preferences for different brands, and not just in beer. In whisky, for instance, even in Scotland, there is a difference between east and west in terms of brands preferred. If you understand these differences you can take advantage of them.”

Certain sectors are also stronger at the moment. “The suburban, community-type pub and bar is having a resurgence and is probably the strongest sector – whereas if you looked at the trade five years ago the prime investment area was the high street.” This Cullen attributes to the fact that youngperson venues in city centres tend to be very fashion-led, while the suburban communityled offering “doesn’t need quite so much specialist investment in the first place, and I think will have a longer life.”

He also suggests both food and wine sales will continue to grow in the on-trade, which is “partly linked to a slow but steady increase in the number of women using pubs and bars, and I suspect that will become even stronger as and when the smoking limitations come in. I think most people accept there will be a total ban of smoking in all public places within a matter of a few years.”

As for consumer groups, according to Cullen, “Undoubtedly the two most important are the 18-25 year-olds – because they do have a lot of disposable income – and the 55-plus age bracket because there are an increasing number of them and they are increasingly keen to enjoy themselves.”

When it comes to classifying the on-trade into sectors, things are a little less clear-cut. Cullen says the company has “come up with 40/45 different outlet types” although he can “come up with a broad overview of things like drinking places, dancing places, eating places, and sleeping places, and can segment the market into pretty useful and discrete chunks for different users.”

But to classify those 45 venue types involves using around six key variables; things like location, consumer type, size and product mix. Categories include, among others, young-person venues, rural character pubs, Irish bars, community pubs, entertainment bars and so on.

State of flux

Nevertheless, Cullen warns, “For those that don’t understand the market terribly well, they sometimes think you can break it up into compartments and then just try and bite off each block, but you to keep that knowledge refreshed because of the high degree of change in the market.”

Another aspect of the on-trade he fears new players can be ignorant of is the fact that, “Some don’t realise that when you come into the market one of the major hurdles is what is described as ‘the route to market’ – so you may have a good brand and proposition and you might have a number of pubs/bars that want/could take your product but if you don’t have a vehicle to actually distribute it to the market you’re still stuck – particularly if you are a drinks brand. You need to have an arrangement with one of the brewers or wholesalers that will get you into that appropriate market sector. The actual distribution route is tied up by the major drinks brand owners,” he adds.

Overall though, Cullen is fascinated by the on-trade, which is not highly price-sensisitive like the off-trade, but image-conscious and fashion-led. “This makes it interesting because you can never can be absolutely sure how things are going to work out, and where they are, and for how long.” In fact, as Cullen concludes, “There’s only one thing that’s for certain in the on-trade, and that’s change [which] makes it difficult to track but good for us because people are desperate to keep pace with good intelligence.”

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