The Dark Side of the On Premise: A Wake-Up Call for Beverage Alcohol Brands
The On Premise, once the lifeblood of the beverage alcohol industry, is facing a crisis. Despite accounting for 61% of global beverage alcohol value sales, the channel is struggling to maintain its relevance in a rapidly changing market. Our research reveals that consumers are drinking less, and the trend is not limited to just one demographic. Generation X and infrequent visitors to the On Premise are leading the charge in cutting their alcohol intake.
The Numbers are Alarming
- Global beer, malt beverages, and cider sales have fallen by a staggering 4.0% in the last 12 months.
- Spirits have suffered an even greater decline, with sales plummeting by 7.6%.
- The volume of private labels in Off Premise accounts for less than 10% of total sales, a figure far lower than the equivalent for other FMCG categories.
The On Premise is Dying
The data is clear: consumers are losing interest in the On Premise. Visitation has remained stable globally, but this is largely due to the fact that consumers are visiting less frequently, not more. The average On Premise visit is becoming less frequent, and the quality of the experience is suffering as a result.
The Future is Uncertain
With consumers drinking less and the On Premise struggling to adapt, the future of the channel is uncertain. Beverage alcohol brands must rethink their strategies and find new ways to connect with consumers. The days of relying on traditional marketing tactics are over; it’s time to get creative.
The Experts Weigh In
"Consumers are increasingly savvy, and they’re looking for experiences that are authentic and meaningful," says Phil Tate, Managing Director for Global Clients at NIQ. "The On Premise must evolve to meet these changing expectations. It’s time for brands to think outside the box and find new ways to engage with consumers."
The Time for Change is Now
The On Premise is at a crossroads. Will beverage alcohol brands adapt to the changing landscape, or will they continue to cling to outdated strategies? The choice is theirs.
