CGA’s previous research has highlighted that 2020 was a volatile year for the On Premise in the US, and sales suffered as a result in comparison to previous years. However, 2021 has proven to be a different story, not without its challenges, but showing the sector is on the steady road to recovery.
Using CGA’s On Premise Measurement (OPM) service, our previous analysis revealed how much 2021 has recovered compared to the levels of 2019. CGA’s OPM service is the only fully projected, extensively validated, measure of beverage alcohol performance in the American On Premise. Used to track share and trends by all the leading beverage suppliers, OPM is the most robust view of sales performance for bars and restaurants ever produced in the US. In addition, OPM data also provides deeper insight into the universe of outlets that are active in the On Premise pre- and post-COVID-19 and identifies the percentage of outlets that ordered pre-pandemic who are still ordering now.
In January 2020, pre-COVID-19, the universe of traditional On Premise accounts in the US was just under 300,000. Across the mega categories, these accounts would typically order on a regular basis month by month. However, COVID-19 had a dramatic impact on these outlets and the regularity with which they’d order stock.
By April of 2020, at the height of restrictions and lockdowns, the On Premise was at its lowest point. Only 49% of outlets who ordered beer and wine stock and 56% of those who had ordered spirits in April 2019 were now ordering stock in April 2020. At this point of the pandemic, many outlet owners were anticipating that they may be reopening in the next few months, as restrictions in some states were initially implemented for only four weeks. With this in mind, permanent closures had not been seriously considered yet.
A year later, it’s clear that confidence had returned amongst the majority of outlets, as orders were nearly reaching the levels last seen in 2019. 88% of outlets that ordered beer in April 2019 were now ordering again in April 2021 – this was the same for 91% of outlets that had ordered spirits and 90% that had ordered wine.
Moving ahead to August 2021, ordering activity had maintained these levels at approximately 90% across three categories. This indicates that the outlet universe has definitely decreased, and CGA’s outlet sales data supports this narrative, with consumers returning to the On Premise with an increase in a higher percentage of sales compared to 2019, but from a slightly smaller pool of outlets.
CGA’s data indicates that the On Premise has evolved over the last 12 months, as outlets gain more experience in implementing COVID-19 safety measures. As tracked in our Consumer Impact Study every four weeks, which evaluates the different dynamics influencing consumer behavior and visitation, this is paying off – with consumers reporting that overall they feel more comfortable and safe thanks to these measures.
However, outlets that have survived this volatile period still face more challenges. As cited in our VIBE leadership report, staff shortages are having a significant impact on the sector, and anything suppliers can do to alleviate pressures on operators will be well received.
Patrick Bannon, CGA Client Director, Americas, said: “There is evidence to suggest we are returning to normal levels in terms of the market. While there have been some changes in the overall universe, for the most part it appears that consumers have returned to the On Premise and outlets are back to consistent ways of working. CGA are working to support our suppliers and operators and ensure they can tailor their strategies to different market conditions, with our four weekly impact reports along with our range of measurement services.”
The COVID-19 On Premise Impact Report is a consumer research report tracking and reflecting on how consumers currently feel about returning to the On Premise, what other states can expect as they reopen fully and how the On Premise can position its offering to encourage more visits. The latest On Premise Impact Report by CGA, along with other special reports issued over the past several weeks, can be found here: https://cgastrategy.com/covid-19-on-premise-impact-us/
For more information and support understanding trends at category, segment and brand level within the On Premise, contact Matthew Crompton at Matthew.Crompton@cgastrategy.com