Promise for global bar scene despite decline

The global bar industry has declined US$7.3 billion over the past five years due to a slowdown in Europe and South America, but smaller markets are showing signs of “strong growth”.

While the global on-trade industry has seen widespread declines, Euromonitor analyst Elizabeth Friend identifies key trends which indicate future growth

According to a new report by Euromonitor International analyst Elizabeth Friend, this drop in global on-trade sales from 2008-2013 is predominantly a result of reduced consumption in Western Europe and Latin America, which are both battling economic difficulties and tough alcohol legislation.

However, Friend states that this “does not show the whole story about how global drinking habits are evolving”, with markets in the Middle East, Africa and Asia Pacific witnessing on-trade growth over recent years.

In these regions, consumers are showing a willingness to spend on drinking outside of the home when the occasion is deemed “worth it”, giving the on-trade the chance to sell more complex drinks that are seen to offer “high value”.

“With this need to maximise value has come a trend away from ‘every day’ alcoholic beverages like beer, and toward those that are more special occasion-oriented, such as wine and spirits,” said Friend.

This trend is also mirrored in the developed markets, where speciality drinks such as “craft beers, house-made soda mixers, barrel-aged cocktails and other unique cocktails” are becoming increasingly popular.

“Though this trend encompasses many different menu terms, the goal of all of them is to communicate to the customer that a particular beverage is special, unique, and somehow worthy of the added cost of an on-trade drinking experience,” said Friend.

“This can also be achieved through unique flavour pairings, such as those using herbs, spices, vegetables, unique textures and fruit flavours.”

She also notes that a global trend of premiumisation has led to a “number of opportunities for operators in developed markets”, including the chance to sell more alcoholic drinks in non-traditional service environments, offering more unique and interesting options, and broaden alcoholic drink occasions with “indulgent dessert drinks”.

Friend identifies casual dining as another trend which is aiding the on-trade drinks sector, as consumers are becoming more “open-minded” about drinking alcohol during “quick service meals”.

In March this year, research group Technomic claimed that despite an overall decline in US on-trade sales, high-end whisky is expected to grow in the sector. Meanwhile, CGA Strategy predicted that spirits will grow to account for 24% of sales in the UK on-trade by 2018.