1 Some occasions are shifting to home
The latest data indicates that some Australian consumers are switching occasions from pubs, bars, and restaurants to Off Premise channels. This is a partly a result of rising costs, with earlier this year NIQ’s Consumer Outlook Survey found that half (51%) of consumers fitted the ‘Cautious’ segment of people who are not severely affected financially, but who are watching their spending closely, while another 19% are ‘Strugglers’ who experience financial insecurity. The trend towards home drinking has led suppliers to find new and creative ways to tap into these occasions.
In the On Premise meanwhile, suppliers must work harder to drive footfall and demand and get consumers out of the comfort of their homes into outlets. The On Premise is often where trial and experimentation begins, and new consumers are recruited, where activations and great experiences can drive foot traffic and encourage repeat visits. Social media is a particularly important strand of these activation strategies.
2 Off Premise liquor sales remain resilient
The increase in home-based occasions with family and friends means total spending on alcoholic drinks continues to be strong even with lower basket sizes. The NIQ Liquor Omnishopper Panel service shows total Off Premise liquor sales in the year to end-February were 3.5% higher than the previous 12 months. Growth in beer and cider sales was even higher at 9.7%.
3 Consumers still want to go out for special occasions
CGA’s OPUS research in Australia shows a third (33%) of consumers went out less often than usual in March—higher than the 29% who are going out more often. But while some everyday visits have been lost, consumers remain eager to go out for special events and experience-led activities—both of which are often high-value occasions. They are still willing to spend but are becoming more selective.
4 The RTD category is changing
Fewer purchasing occasions and changing pack size decisions have led to a 2.2% drop in sales in the Ready to Drink (RTD) category in the last 12 months, NIQ’s Liquor Omnishopper shows. However, several RTD brands that deliver a combination of value and excitement continue to flourish, and there is still a lot of potential for suppliers to appeal to younger adults.
5 Growth potential in on-tap cocktails
Younger consumers also heavily over-index for mixed drinks in the On Premise—which suggests they are looking for On Premise experiences that cannot be replicated at home. Half (50%) of 18 to 24-year-olds told CGA’s OPUS that they typically choose cocktails when out—which means the category has a wider appeal than beer (33%) or wine (25%). Packaged and draught cocktails have increased potential, but they still lack visibility and credibility of other categories in quality. Emphasising value for money, innovation and the consistency of draught-delivered cocktails can all help to correct these attitudes.
6 Interest in health is rising
Another area of growing focus for younger adults is wellbeing. This has led to more interest in low-carb beer, sales of which have grown exponentially in recent years. However, conscious consumers do not want to compromise on quality, so suppliers need to preserve taste and design packaging that provides cues to health aspects.
7 Consumers have new digital journeys to drinks
It is not just in bars or shops that consumers make their drink purchasing decisions now—online platforms are especially important too. Digital touchpoints play active roles throughout the On Premise, from the discoverability to payment phases. Digital loyalty programmes—which two in five (39%) 18 to 34 year-olds now use in bars, pubs, and restaurants—can be an effective way to build lasting relationships with guests, but they need to provide the right rewards and be tailored to venue propositions.
CGA by NIQ helps drinks suppliers, manufacturers and venues capitalise on opportunities to drive sales across Australia’s On Premise, Off Premise and online channels, and craft effective activations and branding strategies in all three markets. To learn more, contact James Phillips at james.phillips@nielseniq.com.
