Value in focus
With many South African consumers facing high inflation in their household costs in recent times, there is a strong emphasis on good value in the On Premise. Just over half (51%) of consumers say it is more important to them that a drink is good value than it was 12 months ago—a figure that is much higher than the global average of 38% from CGA’s REACH survey. However, value for money doesn’t necessarily mean cheap. Only 14% think value means a cheap option, while half (50%) say it means a good deal and 42% equate it with something that is worth its cost.
Demand for quality
While spending is under pressure for many consumers, others remain happy to spend freely in the On Premise, as long as the quality is right. Two in five (41%) say high quality is more important to them than it was a year ago—and again, this is well above the REACH global average (32%). When asked about their purchase plans with a fixed amount of money, two thirds (65%) would buy just one or two premium or luxury drinks—far more than the 11% who would select four or five lower quality ones. There is a clear trend for drinking fewer but better drinks.
Growing interest in health
South Africans also over-index against the rest of the world for their interest in health. Well over a third (38%) of them say health has increased in importance to them in the last 12 months, against the REACH average of 27%. While this is leading many consumers to reduce their alcohol intake, it is also opening up opportunities for no and low alcohol alternatives. However, these options are often perceived to offer less value for money than alcoholic drinks, so suppliers need to prove they are worth the price.
Domestic preferences
Around the world, REACH finds that 24% of consumers think it’s more important than a year ago that their drinks are from their own country. However, this number is much higher in South Africa at 35%. Suppliers and venues need to prioritise domestic brands and local heritage, while also catering for those who want to try new and interesting options from overseas.
Earlier visits
There has been a global shift towards earlier visits to pubs, bars and restaurants, and 33% of South Africans are going out to eat earlier than they were a year ago. This is six percentage points more than the REACH average—and mid-range spenders and Gen Z are both even more likely to do so. This has significant implications for people’s drinking choices, and atmosphere, time-limited promotions and outdoor seating are three of the key considerations for appealing to lunchtime and afternoon guests.
CGA by NIQ Client Solutions manager Abhi Sehgal points out; “Consumers in South Africa show a strong preference for value, with 51% prioritising good value in their drink choices compared to 38% globally. This highlights the need for suppliers and venues to provide products that offer genuine worth rather than just low prices, ensuring a balance between affordability and quality to effectively cater to local consumer preferences.”
CGA by NIQ’s On Premise User Survey is the primary and trusted source for global On Premise channel insights. Its expert-driven analysis covering occasions, channels and categories is delivered by On Premise experts who help drinks suppliers, manufacturers, brand owners and venue operators understand trends in South Africa and respond with successful brand engagement strategies. To learn more about how CGA’s research solutions support winning On Premise activity, click here and contact Abhi Sehgal here.
