2022 was the year of On Premise resilience – expect it to continue in 2023

Charlie Mitchell, research and insight director, looks back at the continued resilience of the global On Premise and changing consumer dynamics in 2022 and how it will continue in 2023.
Charlie Mitchell, CGA research & insight director

2022 was the year of continued resilience for the global On Premise, and boy, does it need it.


Barely emerging from 2021, after two years of disrupted trading, enforced lockdowns and regulatory nightmares, the pub, bar and restaurant scene was quietly enthusiastic heading into 2022. CGA’s Business Confidence Survey showed that two thirds of UK business leaders were optimistic about the prospects of the sector, a figure broadly matched across the globe. Fast forward twelve months and, amidst a cost of living crisis that is crippling businesses, that figure now sits at just 8% – ouch. To put that into context, that is the second lowest on record, only beaten by that of April 2020; perhaps the bleakest period of the bleakest pandemic in living memory.


And yet there remains a stream of consumers heading to the On Premise. Yes, visit frequency is taking a slight hit, and yes, we are seeing new trading dynamics such as an increased focus on value, and yes, there are certain demographics for whom going out in itself is now the treat, rather than the trade up choice, but On Premise visitation levels are yet to be impacted. The reason why? The intrinsic resilience of the sector.


What I mean by the, admittedly, corny, corporate vernacular of “intrinsic resilience of the sector” is, put simply, that people will visit our sector through thick and thin. If times are good, we celebrate with friends over a drink and so too do we commiserate when times are not so good.


In our most recent global research, in H2 of 2022, we asked consumers why they visit the On Premise and what became apparent is that, rather than the product offering, or even the hospitality, it is the fundamental social experience facilitated by the sector that makes it so unmissable. Rather than answer values such as “to try new food and drink”, or “to appreciate high quality products”, the needs were more centered around community. “To catch up with friends” was near ubiquitous as the number one factor, typically followed by “to relax” or “to socialise”.


One trend of interest, especially prominent in mainland Europe is that consumers are more likely to use the On Premise as a place to “destress” and “to get out of the house”. Given the rise in hybrid working, it seems as though cafes, bars and restaurants have taken up a slightly different role from previously, acting as a way to decompartmentalise a “tough day at the office”, which has actually taken place in the confines of the home.


However, given the context of soaring energy costs, inflation and increasing bills for consumers globally, the one answer value that perhaps provides the most hope for why consumers visit the sector is “to treat myself”. Topping the list of reasons for visit in France and consistently in the top 5 globally, it is this need for self-reward that keeps the sector afloat, even in the most choppy of waters.


Around two thirds of On Premise consumers across the globe agree that, not only is eating and drinking out an affordable treat for them, it is the affordable treat that they most look forward to.


While this guarantees a certain level of visitation, at least to some extent, it does have implications on drinks choices, which are resulting in category shifts and new consumer dynamics. The On Premise has long been the spiritual home of “trade-up”, but this may be under threat with consumers looking to maximise value from their visits.


Rather than universal premiumisation, there is now a polarisation trend starting to appear, with a squeezed middle ground of brands losing consumers who are happy to trade down into a lower cost, but high-value option, but also losing those who are looking to treat themselves to high quality options.


This has led to numerous bright spots throughout 2022. Tequila’s march continues, while cocktails have been perfectly positioned for both value and treat, with happy hour deals for first-rate drinks appealing to both those looking for value and quality. There have also been losers; wine and beer are yet to fully recover from the pandemic as a whole and will need to do more to attract On Premise drinkers in 2023.


However, the positive is that there will remain On Premise drinkers in 2023. The resilience of the sector needs to endure, but endure it will.


To learn more about CGA’s REACH survey and other sources of consumer insights for operators and suppliers, click here If you would like to discuss how REACH insights across global markets can support your global strategies, or to learn more about CGA by NielsenIQ’s other sources of consumer insights email charlie.mitchell@cgastrategy.com

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