CGA’s sales data has indicated a 7.6% drop in global spirits sales over the last 12 months. But as an exclusive CGA webinar showed, there are still plenty of growth opportunities if businesses can respond nimbly to changing consumer habits and priorities.
Here are some of the key paths to recovery:
1 Understand the growth areas
While the global trajectory of spirits sales is downward, some sub-categories have been resilient. For example, CGA’s data shows rum and brandy have both lost more than 5% of sales in the last 12 months, but tequila has shed less than 2%. Similarly, trends vary from country to country, with spirits down by 10.7% year-on-year in Britain but by only 2.4% in France. Identifying market hotspots is the first step towards rebuilding sales.
2 Emphasise connections
REACH research shows the enduring global appeal of pubs, bars and restaurants—especially as a place to make connections, relax and celebrate. Spirits brands that can build campaigns around these special connections and show how they facilitate good times for consumers have the best chance of building goodwill and loyalty.
3 Target daytime occasions
There’s a significant global shift towards earlier visits to the On Premise driven in part by the impact of inflation on spending. The preference for quieter and food-led occasions is creating different need states, and spirits brands need to increase their daytime appeal via new serve strategies and lower tempo activations.
4 Respond to polarisation
REACH demonstrates the widespread impact of the cost-of-living crisis, and 83% of all consumers say they have noticed costs rise in the last year. However, while 34% are worse off than they were a year ago, 28% are actually better off. This polarisation makes it vital to cater for a very wide range of needs—from consumers seeking high-value, tried-and-trusted drinks to those who are ready to trade up to super-premium and luxury brands.
5 Stress value
Consumers’ sharp focus on value means some sales have been lost to longer serves like beer, which are often perceived to provide more for the money. However, consumers are much more likely to link value to quality rather than price, so spirits brands that can reinforce their quality credentials with smart offers, promotions and perfect serves and glassware can still compete very well with longer drinks.
6 Leverage staff recommendations
Brands that can win bartenders’ endorsement can get a big head start in the race for sales. CGA’s Global Bartender Report shows four in five (79%) staff recommend drinks every shift, and 95% say guests are likely to order those drinks every or almost every time. Building engagement and advocacy in venues is essential.
7 Adapt to moderation
Another consistent global trend is for moderation in alcohol intake. Nearly a third (31%) of weekly visitors to the On Premise say they are drinking less alcohol than they were a year ago—nearly double the number (18%) who are drinking more. While this brings challenges for the spirits category, it also delivers opportunities for no and low alcohol alternatives that can align with people’s health motivations.
8 Build social currency
More and more consumers seek On Premise experiences that boost their social currency. Visually-appealing, ‘Instagrammable’ serves and memorable activations are now essential—especially in cocktails. With nearly half (47%) of consumers turning to social media to get ideas of where to drink, gaining traction on these platforms is hugely powerful.
9 Increase excitement through experimentation
REACH proves the On Premise is the home of experimentation—especially for younger adults. Well over half (57%) of all consumers prefer to have different drinks here than at home, while only a fifth (20%) want the same options. And because two thirds (69%) are likely to repurchase a drink in the Off Premise if they have enjoyed it while out, the On Premise is the vital incubator of new and exciting drinks.
10 Tap into draught
While draught cocktails remain a small part of spirits sales, it’s a segment of the market that is set to grow. More than half (54%) of consumers have noticed an increase in the availability of draught or tap RTDs, and there’s a lot of investment in this space at the moment. The challenge for suppliers and venues now is to turn growing awareness into consumption.
CGA’s ‘How to Win in the On Premise in 2024’ webinar provided many more insights into trends in spirits and consumer engagement with the On Premise. To watch on demand, click here.
REACH research delivers in-depth analysis of 38 key countries, with responses from around 30,000 On Premise consumers and 600 operators. The survey complements a range of other CGA sources, including sales and outlet measurement and deep dives into On Premise users’ habits, to create a 360-degree view of markets and give suppliers a competitive advantage. Click here for a guide to CGA’s global capabilities. To learn more about how CGA can support you to win in the On Premise, contact the expert team.
