Bars and restaurants have long been an integral part of our social fabric, offering countless occasions and events for people to celebrate and connect. Whether it’s food-focused, drink-centered, or experience-driven, the on-premise sector offers something for everyone.
However, since the COVID-19 lockdown of 2020, we’ve witnessed significant shifts in the reasons people visit these establishments and the times they choose to go. Are people heading out earlier? Do nightclubs still hold appeal? Which drink categories are thriving in this new landscape? Let’s explore the numbers to uncover the trends.
The Power of Brunch
No discussion of on-premise occasions would be complete without mentioning brunch. Officially, brunch is defined as a “late morning meal eaten instead of breakfast and lunch.” However, let’s be honest: it’s often the inclusion of alcoholic beverages that transforms a simple breakfast or lunch into a true “brunch.” Once a staple in luxury hotels in expatriate hotspots like Dubai and the Caribbean, brunch has now gone mainstream, becoming a vital part of any operator’s offering.
Younger consumers are leading this trend. In fact, 39% of 21-24-year-olds report visiting bars and restaurants for brunch, making it the top daypart for Gen Z. In comparison, only 17% of this age group go out for the “early evening” daypart. When it comes to gender, brunch slightly favors females (51% vs. 49%). However, what’s truly noteworthy is the broad appeal of brunch—it’s the most popular daypart for parents as well, with 47% of them choosing this time to dine out.
Hey Big Spender
In NIQ’s latest Consumer Outlook Report, it was revealed that 31% of Americans are now categorized as ‘Strugglers,’ up from 25% in January 2022. With this economic pressure, consumers’ spending power is inevitably squeezed. However, it seems that brunch is one occasion where spending remains relatively unaffected. According to CGA by NIQ’s most recent On Premise User Survey, which gathered insights from 15,000 on-premise visitors, we asked how much people would be willing to spend on a standard cocktail during various occasions—brunch, lunch, mid-afternoon, early evening, and happy hour. Brunch came out on top, with an average spend of $12.49, while mid-afternoon was the lowest at $11.85. This trend holds for premium cocktails as well, where willingness to spend increases to $17.20.
It’s not just the usual brunch cocktails like Bloody Marys and mimosas that are popular. Beer also has a strong presence during this time of day. Forty-seven percent of consumers say their drink choice is influenced by alcohol content, while 35% consider calorie information. This aligns well with packaged beer and non-alcoholic options, which we’ve discussed in previous articles.
Challenges for Late Night?
Shifting focus from brunch to the other end of the spectrum, the struggles faced by the nightclub sector have been widely documented in recent years. During the COVID-19 pandemic, many channels, such as casual dining, were able to pivot to accommodate takeout and social distancing, but the late-night sector faced unique challenges. The rise of dating apps and younger consumers gravitating toward earlier dayparts have further compounded the situation, creating a “perfect storm” for the nightclub industry. Looking at the cold, hard numbers, NIQ’s TDLinx service reveals that nearly 1 in 5 casual nightclubs have closed their doors since March 2020, leaving just under 5,000 still operating across mainland USA.
While the challenges are clear, all is not lost. “Experience” remains a key driver of visitation, and the best nightclubs excel in this area. When we consider nightclubs as part of the broader “High Energy Venue” category, the outlook becomes much more promising. Though nightclubs may have lost their appeal as a weekly go-to, they continue to thrive in the “treat” spend category. According to CGA by NIQ’s latest High Energy Channel Strategy Report, the average consumer in these venues has a slightly lower-than-average household income, yet they tend to spend significantly more on alcohol, highlighting the potential for trade-up opportunities. Positive experiences foster satisfaction, encourage trial, and drive higher spend, ensuring consistent foot traffic. Moving forward, drinks suppliers should view nightclubs more as a marketing tool than a purely sales-driven channel.
To Finish
In conclusion, while the landscape for both brunch and late-night venues has shifted dramatically in recent years, opportunities still abound for operators who are willing to adapt. Brunch continues to be a thriving occasion, driven by younger consumers and a diverse mix of drink choices, offering venues a chance to capitalize on spending despite economic pressures.
Meanwhile, while nightclubs face their own set of challenges, the focus on unique experiences and higher alcohol spend presents an opportunity to reinvent the sector. By embracing these trends, operators can navigate the changing dynamics and continue to create memorable experiences that drive both foot traffic and revenue.
Originally published in Bar and Restaurant news
CGA by NIQ On Premise sales measurement and consumer research solutions provide many more insights into the no and low alcohol category in the US, with expert analysis of categories, channels, occasions and much more. To learn more about core services and opportunities for tailored analysis, contact the CGA team.
