Ten big trends in the US On Premise recovery

How is the US On Premise shaping up as it continues its journey back from COVID-19 disruption?

CGA’s Matthew Crompton and Andrew Hummel provided a recent Brewbound Data Club webinar with the answers.


1 Falling outlets, rising sales

The pandemic has caused a sizeable number of business closures, with CGA measuring a 7.9% drop in On Premise outlets since the start of COVID-19. But sales have bounced back well over the first six months of 2021, and are now running ahead of 2019 levels. “Demand is up and supply is down—and when that happens we see a huge increase in velocity,” said CGA’s client solutions director Matthew Crompton. “The market’s recovered a lot quicker than we thought… I think we’re in for a really good summer.”


2 Consumer confidence soaring

CGA’s surveys of consumers in various states have tracked a rise in numbers planning to go out to eat over the next two weeks—to 74% in New York, for example, compared to just 34% in December 2020. Frequency is rising fast too, and 43% of US consumers plan to visit venues more often than they did in 2019—nearly twice the number who will go out less (22%).


3 Check values up

Enthusiasm for getting back to bars and restaurants is translating into higher spend. Average check value is up by 20% from pre-COVID-19 times, and younger adults are spending particularly freely. But it’s worth remembering that while some people have cash in their pockets and want to treat themselves, many have been hit financially by COVID-19 and will be more cautious. “We’ll see a polarized market—people going for luxury brands, but value brands doing well too,” Crompton said.


4 Older people coming back to the market

It’s not just young people driving sales in US. After the rapid roll out of vaccines, there has been a particularly sharp increase in numbers of older people in the On Premise too. Four in five (81%) of those aged 55+ plan to eat out in the next two weeks—nearly three times as many as in December (29%). Since many of these people have a lot of disposable income, this is a valuable group to target.


5 A return to familiar brands

After months in lockdown, consumers are tending to choose drinks options they knew and enjoyed before COVID-19, CGA’s data shows. Nearly half (45%) have only chosen drinks brands they are familiar with and trust since COVID-19 hit.


6 Short-term challenges in craft

A side-effect of this return to trusted brands is that craft beer has lost a little market share. However, there is still a big appetite for new beer brands, and volumes should pick up again as the market settles back down. “I expect the more experimental categories to come back,” said Crompton, who emphasised the need for brands to stand out. “Craft is more competitive than ever before… showing what your brand can bring to the table is key.”


7 More growth for hard seltzers

Hard seltzers have picked up where they left off when the pandemic hit—in rapid growth. They have gained 1.3 percentage points of drinks volumes in the last 12 months alone, and increased their penetration into menus. “We’re really seeing hard seltzers taking hold in the On Premise… they’re almost ubiquitous now,” Crompton said. Another growth area could be packaged cocktails, said Andrew Hummel, CGA’s client solutions manager. “RTDs [Ready to Drink] definitely offer consistency and speed of service… there’s definitely opportunity for increased engagement there.”


8 Physical service is still valued

COVID-19 triggered an increase in remote, app-based ordering in the US On Premise. But as restrictions ease, many guests want to return to physical service. More than two thirds (69%) of consumers say it is still their preferred method, compared to 9% who want to order through their phone. While many younger people have embraced digital order and pay, older ones haven’t. “The majority are still uncomfortable ordering digitally,” Hummel said.


9 People want printed menus

COVID-19 brought a similar shift from paper to digital menus—but two thirds (65%) still prefer the former, and many of them are turned off by digital lists. “We think the best approach to reach the broadest audience is some sort of physical menu, supplemented by digital menu,” Hummel said.


10 Operators need suppliers’ help

With so many bars and restaurants packed out with returning consumers, partners have a chance to step up their support and share their knowledge and resources. “Customers need the help of suppliers and distributors more than ever at the moment,” Crompton said.


To watch the Brewbound Data Club webinar in full, click here.


To learn more about CGA’s extensive research and insights for the US On Premise, contact Matthew Crompton at matthew.crompton@cgastrategy.com

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