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Inflation doesn’t deter on-trade visits in US
Research from CGA by NIQ has shown that consumers in the US still have a strong desire to visit bars, despite rising prices caused by inflation.
CGA’s USA Category Channel Report 2024 revealed more than a third of consumers plan to go out more than they did in 2023, while 42% plan to as often as they did last year. In addition, 48% of consumers plan to go outside the home for a drink in the next month, although they are aware of rising prices, which is two percentage points higher than in 2023.
Moreover, the research entails that even if some are reducing their on-premise visits, 16% of users will treat themselves when they do – spending more on premium options. One in four would consume fewer drinks when out, which CGA believes shows a preference for quality over quantity, creating opportunity for premium bars.
CGA said that people view socialising over drinks and drinking out as ‘an affordable luxury worth preserving’. In the US on-premise, spirits account for 46% of the drinks share. It has, though, seen a 7.9% decline in volume, which CGA suggests may have been spurred by the demand for ready-to-drink (RTD) serves, which have enjoyed a 33% growth in volume.
It added that the volume decline was largely driven by brandy and Cognac, while vodka, Tequila and whisky has experienced smaller drops.
CGA noted that brands and suppliers should invest widely in channels where categories are experiencing their highest demand. For instance, ultra-premium and super-premium vodka is experiencing a boom in fine-dining restaurants, where 78% of all vodka sold is from this subcategory. CGA added that 41% of vodka drinkers are increasing their visits to these establishments.
Although vodka slightly decreased its share in casual dining venues, CGA noted the volume of spirits sold in these venues still ‘far outweighs’ that of its fine-dining counterparts.
Tequila saw a 0.5 percentage point loss of volume share in fine dining, but it gained the same figure in casual dining, where its sales outweigh fine dining by approximately tenfold.
Tequila has also been resilient in nightclubs. Premium (5.27%) and ultra-premium (11.81%) Tequilas both grew in this sector, and now match vodka’s share of total spirits sales in nightclubs (26.1%).
Positive outlook
To take advantage of the opportunity within spirits for the on-premise, the report added that ‘brands, suppliers and operators simply need to meticulously analyse granular data to ensure they are investing wisely in the right categories and sub-categories, within the appropriate channels’.
Drew Hummel, client solutions director at CGA by NIQ, who carried out the report, said: “There is an encouragingly positive outlook for the American on-premise sector, albeit one characterised by complexity and nuance.
“Opportunities abound, especially within the spirits category. Brands, suppliers, and operators simply need to meticulously analyse granular data to ensure they are investing wisely in the right categories and sub-categories, within the appropriate channels.”
In its latest On Premise Measurement (OPM) Impact Report, CGA by NIQ found that on-premise spirits sales in the US dropped by 3.3% in value and 6.5% in volume, in 2023. However, sales favoured premiumisation.
Data from CGA’s BeverageTrak service, meanwhile, showed that the US is favouring Tequila cocktails with the Margarita the most popular serve.
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