Looking at the trade press, one may be forgiven for losing hope. However, there is reason to be cheerful if one doubles down a cleverly curated and excellently executed strategy
It’s tough out there. After nearly a decade of steady growth in the On Premise sector, many beverage alcohol suppliers are struggling to find even the smallest crumb of comfort. Once plump profits are thinning while blossoming shoots of optimism are withering on the vine.
Bars, pubs and restaurants are closing in record numbers amidst a cost-of-living crisis which is landing a combination of blows to already struggling venue operators; increased costs are squeezing margins, while a lack of disposable income is leaving consumers with tough decisions on how and where to prioritise spend.
What’s more, shifts in socialising and (welcome) easing of stigmas around moderation are spawning new drinking habits which have given rise to the ‘sober-curious’ generation of youngsters visiting the sector ad choosing non-alcoholic options.
And on top of all that, we are braced for a Trump administration, backed by a baying electorate with promises of minimum 10% tariffs on all imports into the largest On Premise market in the world.
In the past month alone, we have seen huge brewers miss Q3 volume estimates and some of the largest spirits companies in the world call out underperformance in key markets.
For many in the sector, this is unchartered territory. Not since the financial crisis of 2008 have such existential questions been asked about the consumer appetite to eat and drink out and, by extension, the health of the sector. Indeed, many who have built successful careers in predominantly good times are now facing up to volatile market conditions and previously unencountered challenges, resulting in, at best, nervousness and, at worst, panic.
Yet, this is precisely the time when calmness and clarity are most vital. Just as in the financial crisis of 2008, there will be winners and, by extension, losers – and it will be those that have kept cool heads and invested in strategy that will come out on top. 
Because, despite the negative headlines and behind the ominous exterior, there remains reasons for optimism. Speaking with those closest to the sector, the picture is far from gloomy; four in five venue operators tell us that they are optimistic about their business prospects for the next twelve months, while nearly three in four hospitality professionals state that hospitality is a sector that provides good long-term career prospects.
Globally, as inflationary pressures ease, consumer confidence is on the rise and visits to the sector are actually stable. While there remains more closures than openings, an influx of innovative operators are ensuring a level of excitement and interest in the sector, which keep punters coming back.
There is a sub-set of enthusiastic consumers, for whom eating and drinking out is a vital aspect of their lives and who think little of paying that little extra to ensure quality of drink and quality of experience.
However, that sub-set is decreasing in number and the opportunities are undoubtedly sparser than previously. It is at this exact point that we, as marketers, strategists and brand owners need to work both harder and smarter.
No longer will mass-campaigns and regional approaches be effective. Nor will we see growth through generic activations. A tailored and targeted approach, built through clarity and understanding of your target audience is the only way to succeed. 
If the US presidential election taught us anything, it taught us that you are not your consumer and that you ignore your audience at your peril. By failing to properly listen to and address the needs of their traditional working-class, lower-income base, the Democrats alienated a key audience to devastating effect.
In a world where increasing polarisation, alongside distinct, differing and discordant viewpoints are shaping people’s attitudes towards pretty much everything, it has never been more important to understand and engage with your core consumer; those high frequency users and those superfans who, more often than not, determine the success of your brand.
Building a targeted strategy that resonates with this tribe of fans (including hospitality staff), based on where, when and how they drink out, alongside their views, interests and hobbies will stimulate wider interest, picking up momentum and drive growth in otherwise near-possible conditions.
Similarly, not all venue types, occasions and even countries will be fertile ground. Picking specific battlegrounds in which conditions are favourable and being relentless in a quest to understand, target and win.
Yes, it is tough, but only a laser focus, with clarity and calmness will still see success in the On Premise sector in 2025.
To learn more about CGA’s REACH survey and other sources of consumer insights for suppliers and operators across global markets to support your global strategies, contact Charlie Mitchell here.
Originally published in Global Drinks Intel Magazine
