CGA Research and Insights Director Charlie Mitchell commented, “An increasing number of consumers, including those in traditionally late-night markets like Spain, are choosing to go out earlier to eat and drink. This trend is also evident in South Africa, where early evening outings are becoming more popular. While this poses a challenge for the spirits category, which typically peaks in later hours, it also presents opportunities for suppliers and venues to offer ranges that fit these earlier moments and stand out from the competition.“
Wining and dining still hold major appeal
The webinar presentation also underlined the continued deep affection for the on-premise restaurant and bar experience. More than four in five respondents visit these venues at least quarterly, and nearly two-thirds do so weekly. This is up by one percentage point in the last 12 months, despite some tough headwinds. “In South Africa, the on-premise remains a vital social hub, catering to every need state, from socialising to relaxing to celebrating. Understanding the habits and needs of this core group of engaged consumers is crucial for success,” says Mitchell.
Experimentation nation
While some consumers stick 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% among 18- to 34-year-olds. The on-premise is also pivotal in off-premise sales, with 69% of respondents saying they will buy a drink they have enjoyed in the on-premise at home as well.
Moderation intensifying competition for sales
The moderation of alcohol consumption was another notable trend highlighted during the presentation, with a third (37%) of consumers saying they’re drinking less alcohol, while only 13% report drinking more. This trend is particularly apparent among younger adults, driven by health and financial considerations which is evident in South Africa, where there is a growing interest in lower-alcohol and non-alcoholic beverages.
High demand for value
Client Solutions Director,
CGA by NIQ
Economic pressures were also reported as creating polarisation among consumers, with well over a third (38%) indicating that value is more important to them than it was a year ago. CGA EMEA Client Solutions and Services Director George Argyropoulos comments, “In South Africa, value does not necessarily mean cheap but rather something that is worth its cost and delivers on expectations of quality, execution, and overall experience. This highlights the importance of serve and all-round hospitality, helping guests feel they are securing full value.”
A concentrated thirst for quality
Another interesting shift highlighted during the webinar was that while some consumers are sharply focused on value, high spenders continue to demand luxury venues and super-premium drinks choices. In many regions including South 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, this shows that the high-end market has been squeezed. But the large majority of consumers say they will continue to choose premium over value options whenever they can.
Recommendations are the route to sales
The power of endorsement was also mentioned with the insight that consumers, regardless of their spending habits, seek informed choices with recommendations from bartenders being particularly influential. Mitchell underlined this by referencing CGA’s Global Bartender Report, which shows that 79% of staff recommend drinks every shift, and 95% of guests are likely to order those recommended drinks. “Building advocacy among venue teams is crucial, especially in South African cities known for their vibrant bar scenes,” says Argyropoulos.
An experiential incubator
Overall, Argyropoulos commented that consumer interest in new drinks positions the on-premise as a powerful incubator for new brands. He adds that the trend towards prioritising experiences over things is also evident, with South African consumers valuing social currency that translates to likes and followers, making the overall experience crucial. Brands can enhance this by supporting venues with innovative serves, memorable activations, and compelling social media stories.
For more detailed insights, watch the ‘How to Win in the On Premise in 2024’ webinar on demand here.
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.
To learn more about how CGA can support you to win in South Africa’s 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.
