We’re nearly into the final quarter of 2025, On Premise recovery continues at a steady pace. City centre visits are up, and younger, higher-spending consumers remain engaged. Yesterday’s tax relief news adds a welcome boost.
Yet operator confidence remains fragile, challenged by the compound impact of inflation, tight margins, and shifting consumer habits. The trading environment has clearly evolved – so how can drinks brands strengthen client relationships and stay competitive through the rest of 2025 and beyond?
Consumers expect more and different
The traditional night out formula isn’t cutting it anymore. Today’s consumers, particularly Gen Z and younger millennials, want curated, engaging, and social-first experiences. This is why we’re seeing market outperformance across third space venues, experience-led concepts and competitive socialising formats.
Correspondingly, operators are paying attention-a third (32%) of business leaders adding entertainment to their offer in a bid to appeal to new audiences or occasions.
All the same, the entire customer experience is evolving beyond just entertainment or aesthetics. And it’s a green light for drinks brands to come up with fresh ideas, engaging activations, and serve strategies tailored to the new rhythms of the day, dayparts and occasions.
Price sensitivity is real and growing
There’s no avoiding the fact consumers are watching what they spend. In turn, operators are walking a tightrope.
On one hand, margins are under siege from rising wage costs, NICs, and food inflation. Yet on the other, value perception is vital for attracting footfall and repeat business.
Buying decisions of consumers, especially in mainstream outlets and earlier dayparts, are driven by:
- Discounted drinks
- Accessible pricing
- Good value for money drinks packages
Those who tap into targeted price mechanics and value-led serves will stand out to these cost-conscious consumers, particularly when quality and affordability go hand in hand.
Declining alcohol consumption triggers a rethink
Moderation is here to stay. And three quarters (74%) of business leaders believe falling alcohol consumption will have a significant impact on the sector.
In fact, the no and low trend is considered the second biggest political or social impact operators are preparing for. And it continues to gain traction as a result.
But this isn’t bad news. Conversely, it’s an opportunity for innovation.
To this end, there’s room to reposition spirits away from their traditional late-night stronghold, and towards spritz serves and sessionable lower-ABV cocktails across lunchtime and mid-afternoon. Brands who adapt and optimise strategies across all parts of the day will help win sales and share.
Diminished investment exacerbates problems
This might be the most concerning of all the trends we’re tracking. Operators are cutting back on staff training by -25% and recruitment by -29%, often as a direct result of profitability pressures.
And the consequences?
- Inconsistent service,
- Poor serves
- Missed brand-building moments
This is risky for drinks brands, seeing as the On Premise is often the first touchpoint for consumer trial. After all, the brand experience breaks down at the bar if venue staff get it wrong.
Yet it’s a massive chance for suppliers to step up with training, advocacy, and incentive programmes to protect both brand equity and guest experience.
Are you ready for rising tender activity?
On top of all the above factors, around half of operators say they’ll be tendering their spirits and LAD range this year, with a third looking to rationalise the number of suppliers thy work with. It’s a continuing trend, emphasising how the return on investment of stock held is being evaluated.
Interestingly, rationalisation demonstrates a desire to form brand partnerships that add real value, beyond streamlining for efficiency, across pricing, support, and customer appeal.
It’s a window to reset. And competitive edge is there for the taking by drinks brands and suppliers who:
- Demonstrate relevance
- Deliver category insight
- Offer versatile portfolios
But you’ve got to come to the table prepared.
So, What Now?
There’s little room to play it safe for the rest of 2025. Yet success is achievable by optimising strategy in the right channels, showing up in imaginative and compelling ways, and being essential to work with.
This means:
- Focusing on where your brands add the most value
- Supporting new occasions and evolving expectations and needs
- Tapping into the power of venue staff advocacy and education
- Understanding the operator’s pressures
Yes, the landscape is shifting. But it means opportunity for drinks suppliers who can flex, adapt, and lead in this new On Premise reality.
CGA by NIQ provides a best-in-class suite of research to help On Premise stakeholders understand the latest sales trends and consumer engagement in the sector. It delivers in-depth analysis of channels, occasions, segments, pricing and much more. Contact Rachel Weller, CGA by NIQ commercial leader – GB and Ireland here.
