The On Premise accounts for 61% of global beverage alcohol value sales, making it vital for brand owners to continue to invest in the channel. It provides an important platform for building brand equity and long-term consumer loyalty. This, in part, is demonstrated by the fact that beverage alcohol brands have overall been less impacted by the threat of private label than other FMCG categories. The volume of private labels in Off Premise accounts for less than 10% of total sales, (a figure far lower than the equivalent for other FMCG categories).
Innovative serve strategies and activations which connect with consumers and ensure elevated quality will be key to maintaining a positive perception of value among consumers, as well as building long term success for Beverage Alcohol brands and the global On Premise alike.
Key Highlights of the CGA On Premise Study includes:
- 83% of global LDA* consumers have visited On Premise in the last 3 months, with 62% visiting weekly
- Visitation has remained stable globally, despite most consumers feeling financially worse off than they were last year
- On Premise plays a vital role in facilitating connections with friends and loved ones, with 3 of the fastest growing reasons for visit being – Connecting with family and friends, to celebrate and to have fun
- On Premise accounts for 61% of global beverage alcohol value sales (excluding wine)
- Although visits are stable, global On Premise sales of beer, malt beverages and cider volume sales have fallen by 4.0% in the last 12 months. Spirits have fallen by 7.6%
- Gen Z and younger Millennials (to age 34) are most likely to increase their visits to On Premise over the next 3 months with a net increase of 27pp vs 14pp for all On Premise visitors
The OPM solution supports businesses’ strategies to grow sales against a backdrop of changing On Premise preferences, including a moderation in alcohol intake. Alongside OPM, CGA conducted a study of 30,000 On Premise consumers across 38 markets to reveal that even though consumer visits to the On Premise remain high, consumers’ relationship with alcohol is mixed, with more than a third (37%) of consumers now drinking less alcohol than they were 12 months ago. Generation X and infrequent visitors to the On Premise are most likely to be cutting their alcohol intake.
CGA’s OPM service drills deep into data to spotlight the impact of these consumer trends on category performance. Global beer, malt beverages and cider sales by volume have fallen by 4.0% in the last 12 months, and higher prices have led to a 0.4% increase by value. By contrast, spirits have lost 7.6% and 3.4% by volume and value respectively. There have been particularly sharp drops in brandy, rum, and gin sales in key markets, while others including tequila and vodka have performed better.
Phil Tate, Managing Director for Global Clients at NIQ said: “Our research shows how the role of the On Premise is evolving rapidly around the world. Alcohol consumption may be falling, but bars, pubs and restaurants are still pivotal to consumers lives. While moderation is clearly impacting Beverage Alcohol performance, people’s shifting drinks preferences are opening new opportunities in other categories. On Premise remains a vital channel for growing brand equity, and association with memorable moments here is a powerful way to secure trial and loyalty. With some consumer cost pressures easing and younger adults particularly engaged, there is significant headroom for growth in the months and years ahead.”
Phil Tate, ManagingDespite volume declines, there is reason to be optimistic as people remain eager to go out and are set to increase their spending in the second half of 2024. On Premise plays a significant role in consumers’ lives as a destination for bringing together loved ones and enables brands to create meaningful connections with consumers to build brand loyalty.
A quarter (26%) of global consumers surveyed by NIQ say they will raise the frequency of their visits to On Premise over the next three months—more than double the number (12%) who plan to go out less often. Gen Z are significantly more likely to increase their visits.
OPM measures brand and category sales performance in On Premise across multiple territories. The solution enables brand owners to uncover growth driving market trends, evaluate brand performance and track share, as well as identify headroom opportunities and assess competition.
CGA by NIQ is expanding its On Premise Measurement (OPM) globally. OPM has been refined by CGA over many years in the UK and US, delivering in-depth analysis of sales, distribution and pricing by region and channel that help brands to win in multiple markets. It has now been expanded to key countries including Australia, Canada, Germany and France, with South Korea to follow soon.
CGA’s OPM solution delivers in-depth intelligence on the spirits and beer categories across the global On Premise, with expert analysis by channel, sub-category, region, and much more. To discover more about the service and opportunities for bespoke analysis across international markets, click here.
