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On-premise Alcohol Trends - US - May 2016

Published By :

Mintel

Published Date : May 2016

Category :

Alcoholic Beverages

No. of Pages : N/A

Sales of alcohol at bars, restaurants, and other establishments continue to grow as consumers feel relatively positive about the US economy. The alcohol industry is continually adapting to new consumer preferences including the movement toward craft beer, lower alcohol drinks, and cocktails made with the freshest ingredients. Bars/restaurants can potentially increase alcohol sales by understanding what consumers order which beverages, what motivates consumers to try a drink, and what flavors consumers find appealing.

Table of Content

Overview

What you need to know
Definition

Executive Summary

The issues
Sales of on-premise alcohol are experiencing steady growth
Figure 1: Total US sales and fan chart forecast of on-premise alcohol, at current prices, 2010-20
Gen Xers and Boomers are infrequent on-premise drinkers
Figure 2: On-premise alcohol consumption frequency, at least weekly, by generation, February 2016
Drink type loyalists won’t branch out
Figure 3: AFH new drink trial motivators, by number of different types of alcoholic beverages consumed AFH, February 2016
There is a disconnect between what consumers want and what is trendy
Figure 4: Appealing alcoholic beverage descriptors, any rank, February 2016
The opportunities
Consumers want drinks that complement their meals
Figure 5: AFH alcoholic beverage statement agreement, any agree, February 2016
Millennials drink often and order a variety of drinks
Figure 6: Repertoire analysis of beverages consumed, typically consume 3+ different beverage types AFH, by select demographics, February 2016
IPAs, liquors, and dessert wines are making their marks on menus
Figure 7: Growth of select alcoholic beverages on menus, Q4 2012-Q4 2015
What it means

The Market – What You Need to Know

On-premise alcohol sales grow steadily
A positive economy leads to bar sales
Craft beer is here to stay

Market Size and Forecast

Sales of on-premise alcohol continue to grow; will soon pass $100 billion annually
Figure 8: Total US sales and fan chart forecast of market, at current prices, 2010-20
Figure 9: Total US sales and forecast of on-premise alcohol, at current prices, 2010-20
Figure 10: Total US sales and forecast of on-premise alcohol, at inflation-adjusted prices, 2010-20

Market Factors

Americans are cautiously optimistic about the economy
Figure 11: Unemployment and underemployment, January 2007-March 2016
Figure 12: Consumer Sentiment Index, January 2007-March 2016
Number of breweries at all-time high. Craft distilleries also on the rise.
Millennials are key consumers, but the money is with the older generation
Figure 13: Population by generation, 2011-21
Figure 14: Median household income, by age of householder, 2014

Key Players – What You Need to Know

Restaurants are upgrading their alcohol programs
New bars are making drinking a full experience
Mixers and light beer are struggling to keep up with trends
Trends are shaping bars/restaurants

What’s Working?

Restaurant bars get a makeover
FSR chains become beer-centric
All fresh everything
Make your mark on social media
Figure 15: Mentions of spirits and drinking at bar/restaurant, April 2013-16

What’s Struggling?

Light beer struggles with its identity
Premade alcohol mixers face an image problem

The New Bars

An emerging segment offers opportunity for all alcohol brands
Barcades
Taprooms/distilleries
Tiki bars

What’s Next?

Foodservice trend: New bar stars
Bar tech
Nitro beer
Figure 16: Nitro beers released in 2016
Low alcohol cocktails
Hard soda
Figure 17: Hard soda examples from GNPD
Nice ice
Will fermented tea be the next trendy ingredient?
Great opportunity exists for flavored beer
Figure 18: Beer launches by flavor, 2010 and 2015
Figure 19: Examples of flavored beer launched in 2016

MMI Analysis

On-premise alcohol growth
Figure 20: Growth of alcohol at restaurants, Q4 2012-Q4 2015
Beer: IPAs drive overall growth
Figure 21: Top 10 beers at restaurants, Q4 2012-Q4 2015
Wine
Figure 22: All wine at restaurants and % growth, Q4 2012-Q4 2015
Red wine
Figure 23: Top 10 red wines at restaurants, Q4 2012-Q4 2015
White wine
Figure 24: Top menued white wines at restaurants, Q4 2012-Q4 2015
Dessert/fortified, sparkling, and non-grape wine
Liquor and cocktails
Figure 25: Top menued liquors at restaurants, Q4 2012-Q4 2015
Whiskey
Tequila
Rum
Gin
Cocktail menus get more specialized
Figure 26: Top 10 cocktails at restaurants, Q4 2012-Q4 2015
Cocktail ingredients
Figure 27: Beer/cider cocktails at restaurants, Q4 2015
The bitter truth about liqueurs
Figure 28: Elderflower-flavored alcoholic beverages released in 2016

The Consumer – What You Need to Know

Millennials are key consumers
Consumers are most interested in familiar drink flavors
Word-of-mouth is a powerful motivator
Not all drinkers are the same

Away from Home Alcohol Consumption

On-premise alcohol consumption frequency varies by demographics
Figure 29: On-premise alcohol consumption frequency, February 2016
Figure 30: On-premise alcohol consumption frequency, at least weekly, by select demographics, February 2016
Consumers plan on spending more at bars in 2016
Figure 31: Perceived change in spend on alcoholic drinks (out of home), January 2013-16.

Alcohol Consumed On-premise

Beer is the most consumed alcoholic drink on-premise
Figure 32: Alcoholic beverages typically consumed AFH, February 2016
Millennials, Hispanics, urbanites, and the affluent drink a variety of alcoholic beverages AFH
Figure 33: Repertoire of beverages consumed, February 2016
Figure 34: Repertoire of beverages consumed, typically consume 3+ different beverage types AFH, by select demographics, February 2016
Drink preferences of the “drink loyalist”
Figure 35: Alcoholic beverages typically consumed AFH, by consumers who typically drink one type of alcoholic beverage AFH, February 2016

Drinker Profiles

Beverage drinker indexes
Beer/cider drinkers
Beer drinkers vary dramatically by beer of choice
Figure 36: Drinker indexes: Any beer, non-craft domestic, imported, craft, and hard cider drinkers, February 2016
Wine and champagne/sparkling wine drinkers
Age differences exist among wine versus champagne drinkers
Figure 37: Drinker indexes: Any wine, wine (excluding sparkling), and sparkling wine drinkers, February 2016
Cocktail and spirit drinkers
Marketing to the neat/on the rocks drinker
Figure 38: Drinker indexes: Spirit neat/on the rocks, spirit with mixer, shot drinkers, February 2016
Not all cocktail drinkers are the same
Figure 39: Drinker indexes: Any cocktail, tropical cocktail, classic cocktail, craft cocktail, after dinner drinkers, February 2016

Drink Trial Motivators

Specials, word-of-mouth, and a clear menu motivate trial
Figure 40: AFH new drink trial motivators, February 2016
In their own words: Motivators for trying new drinks
Women value recommendations. Men are brand loyal.
Figure 41: AFH new drink trial motivators, by genders, February 2016
Drink type loyalists are elusive consumers
Figure 42: AFH new drink trial motivators, by number of different types of alcoholic beverages consumed AFH, February 2016

Alcoholic Beverage Flavor Interest

Consumers respond to familiar flavor profiles
Figure 43: Appealing alcoholic beverage descriptors, any rank, February 2016
Men and women have vastly different flavor preferences
Figure 44: Appealing alcoholic beverage descriptors, any rank, by gender, February 2016
Gen Xers and Boomers crave a “smooth” drinking experience
Figure 45: Appealing alcoholic beverage descriptors, any rank, by gender, February 2016

Alcohol Attitudes and Perceptions

Food/drink pairings and other areas of opportunity
Figure 46: AFH alcoholic beverage statement agreement, any agree, February 2016
Figure 47: AFH alcoholic beverage statement agreement, “I like to experiment by trying new alcoholic drinks away from home,” any agree, by generation, February 2016
On-premise alcohol brand attitudes
In their own words: Branded spirits in cocktails
Perception of craft alcohol
Figure 48: AFH alcoholic beverage statement agreement, “‘Craft’ alcohol brands are higher quality than big brands,” any agree, by generation, February 2016
In their own words: Craft alcohol brands
Consumers typically stick to one type of drink when they go out
Alcohol brand matters more to men
Figure 49: AFH alcoholic beverage statement agreement, any agree, by gender, February 2016
Urbanites are adventuresome drinkers
Figure 50: AFH alcoholic beverage statement agreement, any agree, by area, February 2016
Craft beer drinkers care more about the pour
Figure 51: AFH alcoholic beverage statement agreement, “Draft beer tastes better than bottled or canned beer,” any agree, by beer drinkers, February 2016

CHAID Analysis – Ultra-premium Spirit Drinkers

Methodology
Millennial neat/on the rocks drinkers value ultra-premium spirits
Figure 52: AFH alcoholic beverage statement agreement, CHAID – Tree, February 2016

Qualitative Analysis – Drink Frustrations

Panelists cite drink price as a major frustration

Appendix – Data Sources and Abbreviations

Data sources
Fan chart forecast
Consumer survey data
Consumer qualitative research
Mintel Menu Insights
Social media methodology
Abbreviations and terms
Abbreviations
Terms

Appendix – Market

Figure 53: Total US sales and forecast of on-premise alcohol, at current prices, 2010-20
Figure 54: Total US sales and forecast of on-premise alcohol, at inflation-adjusted prices, 2010-20

Appendix – Consumer

CHAID Analysis
Figure 55: Attitudes toward drinks – CHAID – Table output, February 2016

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