How can kegged cocktails help bars navigate current economic pressures?

According to the latest CreditorWatch Business Risk Index released in August, the rate of business failures in Australia is at its highest level since January 2021. Out of all industries, the risk was highest for Food and Beverage Services, which recording a failure rate of 8.2%.

“Our data, consistently and for some time now, indicates that Australian businesses are operating under extremely challenging conditions – particularly those in the Food and Beverage, Arts and Recreation, Retail Trade and Construction sectors,” said Anneke Thompson, Chief Economist at CreditorWatch.

“We don’t expect businesses to feel more confident until there have been at least two or three cuts to the cash rate. Unfortunately, this means it is likely things will get worse before they get better.”

Drinks Trade recently asked CreditorWatch's CEO Patrick Coghlan why the hospitality sector has been hit the hardest.

“There's only so much that you'll pay for a beer, for a coffee, for a bowl of pasta, for a sandwich,” he said.

“Unfortunately in the hospitality industry, you can't pass on the cost to the consumer in the same way that a software business might be able to pass costs on to a commercial customer of theirs.”

Many drinks industry stakeholders have started looking at ways they can reduce the price of drinks offerings without reducing margins. One of the leading solutions is the production of cocktail products in kegged format.

“It takes just 20 seconds to pour and garnish our tapped cocktails, and really anyone can do it,” said Michael Cox, Head of Sales at Vanguard Luxury Brands.

“That means high-volume venues can get 180 cocktails out each hour, that still command a premium price point with the quality of brands and ingredients used.”

Last month at this summer trends event, Vanguard announced two new additions to its Cocktails on Tap portfolio. The new Four Pillars Yuzu & Peach Gin Spritz and the Casa Orendain Spicy Pineapple Margarita will join the now established Four Pillars Bloody Shiraz Spritz and Broken Bean Espresso Martini in the range.

According to Nick Tesar, Creative Director of Gin Drinks at Four Pillars, “if a venue churns a mass volume of cocktails, there are plenty of options to pre-batch ahead of time, and the tapped cocktails will work a treat to keep service flowing. Whereas if a bar is looking for more creativity and new drinks for the season, then we’ve got that in tenfold.”

Interestingly, smaller producers such as Zonzo Estate are also considering the potential of selling kegged versions of their product.

“We'll definitely consider it,” said Rod Micallef, Zonzo Estate's Director, in a recent interview with Drinks Trade.

“We're doing it at Afloat this year, so some Zoncello’s on tap in Melbourne… It'll be interesting to see how it goes this summer. I think it'll do really well. And hopefully - if there's enough demand for it - we can go that way because it is better environmentally as well/less packaging [and] it's definitely more cost effective for everyone involved.”

Cocktails on Tap is just one component of Vanguard’s Drinking Summer program, which also offers its partners trend-driven menus, training and mentorship from its experts, custom glassware, and promotional material.

To help launch Drinking Summer nationally, Vanguard is offering participating venues the chance to win $32,000 in cash prizes. For more information or to sign up for the program, get in touch with your Vanguard Luxury Brands representative.