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Looking ahead: Troy Christensen, CEO, Enotria and Coe

Published:  23 August, 2017

With the autumn tasting season soon upon us, as the trade prepares for the run up to the all-important Christmas trading period, Harpers continues its web series asking leading voices in the trade what trends and challenges they’re expecting to face in the latter half of 2017.

We continue our series with Troy Christensen, CEO, Enotria and Co.

1. How has the first half of 2017 compared to 2016?

There are a few notable trends we are seeing in the on-trade. The concept of drinking less, but better is certainly true. The economic uncertainty has changed consumer behavior and large cost increases in regulatory, tax and inflation has put undue pressure on most on trade outlets.

But, this is different than the credit crunch where there was a trading down impact. When consumers go out, they want an experience and won’t sacrifice quality.

2. What’s your strategy for the second half of the year, through autumn and leading up to the Christmas trading period?

Many on-trade outlets are in a difficult position trying to recoup margin related to cost increases. Across-the-board price increases are turning off consumers, but quality deterioration is equally turning off consumers. We are working with our customers to find the best entry-level product, but then put efforts into encouraging consumers to trade up.

As an example, we had one outlet convinced he needed to migrate into a lower cost gin list. We worked with him to get an interesting 10 gin list with some activation and he found a substantial increase in turnover, even if quantity was slightly down.

3. What will be your main focus during this time?

Consumers need an experience to spend. We are working with our customers to help engage their consumers with interesting and engaging products. People will spend a bit more to have their “insta-gramable” drink. So, the old rules of people trading down is not the case any longer.

4. Are there any specific challenges that you’re planning for?

The ongoing currency weakness puts pressure throughout the supply chain and ultimately continues to pressure the consumer. There are many actions to re-engineer wine and cocktail lists to allow customers to eke out margin recapture without trying across the board increases.

5. Any specific trends you anticipate?

Consumers may spend less time going out, but will want better experiences and willing to pay for them when out. Increased events, pop-ups, food-led and experience-driven spending, less vertical drinking spending.

6. Have there been any early indications as to what this period has in store for 2017 and what the trade can expect?

Every on-trade outlet must differentiate themselves when consumers are more selective in their spending. Until Brexit uncertainty goes away, there will be this type of volatility and pressure on consumer sentiment. No longer will on trade growth “lift all boats”. There will be winners and losers, it is the experience, quality and category engagement that will make a difference.