Here are nine of the top takeaways to help beverage suppliers and operators understand their markets and craft effective strategies.
1 There’s enduring affection for the On Premise
The REACH survey of 30,000 consumers shows the deep affection for the On Premise. More than four in five (83%) respondents say they visit restaurants, pubs, bars and similar venues at least quarterly, and nearly two thirds (62%) do so weekly—up by 1 percentage point in the last 12 months, despite some tough headwinds. Around the world, the On Premise is a place of connection and fulfils every need state, from socialising to relaxing to celebrating and much more. Understanding the habits and needs of this core of heavily engaged consumers is vital to success.
2 Moderation is intensifying competition for sales
The moderation of alcohol is a big theme of the REACH survey. Well over a third (37%) of consumers say they are drinking less alcohol while only 13% are drinking more, and the trend is particularly apparent among younger adults—for both health and financial reasons. Reduced intake is impacting volumes, with beer and spirits sales in the last 12 months down by 4% and 7.6% respectively. However, there are plenty of growth areas, and suppliers that can develop campaigns around the special connections made in the On Premise can still grow sales and brand goodwill.
3 Consumers are going out earlier
Across the globe, more people are going out to eat and drink earlier than are going out later—even in traditionally late-night markets like Spain. This is a challenging trend for the spirits category in particular, where sales have traditionally peaked in later dayparts, but it is opening up opportunities in lower-tempo and with-food occasions. Suppliers and venues need ranges and serves that fit these earlier moments and stand out from the competition.
4 There’s high demand for value
The research shows a polarisation of consumers who feel better or worse off than they did a year ago, creating hour-glass economics. Well over a third (38%) say value is more important to them than a year ago, and many are looking for tried-and-trusted drinks that they know will be worth their money. However, value doesn’t necessarily mean cheap—just something that is worth its cost and delivers on expectations of quality, execution and overall experience. This is where serve and all-round hospitality become more important, helping guests feel they are securing full value.
5 The thirst for quality is concentrated
While some consumers are sharply focused on value, high spenders continue to demand luxury venues and super-premium drinks choices. In many regions including Asia and Africa, wealth has been heavily concentrated in a top tier of consumers for suppliers to target. With the proportion of consumers willing to pay extra for a better quality drink falling from 63% in 2022 to 55% now, the high-end market has been squeezed. But the large majority of consumers will choose premium over value options whenever they can: asked about their intentions with the same fixed spend, 64% would buy one or two premium or super-premium drinks—far more than the 11% who would buy four or five cheaper ones.
6 Recommendations are the route to sales
Whatever their spend, consumers want to make informed choices and are looking for help. Friends, family and menus are all important, but the biggest influences on drinks sales are bartenders’ suggestions. CGA’s Global Bartender Report shows 79% of staff recommend drinks every shift, and 95% say guests are likely to order that drink every or almost every time. This highlights the huge importance of building advocacy among venue teams. In short, suppliers need to influence the influencers.
7 There’s a quest for social currency and experiences
Across the world, the focus of spending is shifting from things to experiences. Consumers are looking for social currency that is rewarded by likes and followers, and the quality of the all-round experience is crucial. Atmosphere, friendly and knowledgeable staff, cleanliness, range—all these aspects and more contribute to the experience. Aesthetics and Instagrammability are more important than ever too, and there’s an opportunity for brands to support venues with serve innovation, memorable activations and compelling social media stories.
8 Consumers like to experiment…
While some consumers are sticking to familiar drinks, others are eager to experiment. Well over half (57%) like to have different drinks in the On Premise than they do at home—and that figure rises to 65% of 18- to 34-year-olds. The On Premise is also pivotal in Off Premise sales, as 69% will buy a drink they have enjoyed in the On Premise at home as well.
9 … And they’re looking for the serves of tomorrow
Consumers’ interest in new drinks makes the On Premise a powerful incubator of new brands. More than four fifths (82%) of sales for the top 10 new products in the LAD and spirits categories of the last year have come in the On Premise. Matcha-based drinks, Radlers and twists on the Margarita are just three of the serves identified by CGA by NIQ for growth potential, and it will be vital to keep track of changing preferences in the months and years ahead.
To watch the ‘How to win in the On Premise in 2024’ webinar on demand, click here.
Client Solutions Director,
CGA by NIQ
CGA by NIQ’s 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 and to discuss country and regional specific analyses, global insights to shape your strategies and to address your specific challenges, get in touch here.
