A major shift that has been taking place within the alcoholic beverage industry is the rising tendency for consumers to enjoy their drinks at home, rather than at a bar or restaurant. Of course, the current pandemic has eliminated on-premise drinking entirely, for the time being. But even before Covid, drinks consumed ‘on-premise’ have been in a steady decline for several years, while the number of people drinking at home is on the rise.
While every company responds to trends like these differently, the ones who are best able to utilize data to quickly recognize and react to them find the most success.
Dimensional Insight’s case study of Campari America provides a glimpse into this and other changes in the industry, and how one company used data to respond to them. Here’s what we can learn by studying their example.
According to the case study, the trend was first observed after the recession in the year 2000. Although a decline in sales was to be expected at that time, the number of people drinking off-premise never fully bounced back. People seem to be more frugal with drinking habits now, commonly ‘pre-gaming’ at home before going out to save money.
There has been a measurable change in the quantity and quality of beverages that people are drinking. The trend of “premiumization,” meaning a shift towards quality over quantity in drinks, has been an observed effect for years. A report by Nielson CGA points out that this trend is more pronounced in off-premise drinking than it is with on-premise drinking. This is likely because drinks at bars and restaurants are already so expensive that people don’t mind spending a little bit more.
What liquor producers and distributors can do
Liquor distributors that are attentive to this change may even end up profiting from it. Campari saw positive results from developing a line of easy in-home cocktails that cater to customers who want to enjoy more complex drinks from the comfort of their own home.
By observing this and other market trends, such as an increase in the popularity of brown liquors, Campari manages to stay ahead of its competitors.
Other wine and spirit producers can take advantage of this shift towards off-premise drinking by promoting their products for drinking at home. This can be as simple as putting food pairings or cocktail recipes on bottle labels, or can involve more in-depth strategies like partnering with a liquor delivery service.
Offering samples at bars and restaurants may also, counterintuitively, be a good strategy for getting people to drink your product at home. Many customers try more expensive or unfamiliar drinks while they are out to determine whether they like them enough to order a larger quantity from a liquor store.
What bars and restaurants can do
For bars, restaurants, and other businesses that are reliant on people ordering drinks in-person, focus on offerings that customers can’t easily recreate at home. Unless your customers have several beers on taps in their houses, beer flights are something that they’ll have to go out to get. And while beer flights might be the most well-known variety, flights of wine and spirits can be equally popular.
Flights are a unique offering that don’t take much time or skill for bartenders to make, but more technical drinks are another great way to get customers out of their houses. Complex cocktails aren’t easily made without the help of a fully-stocked bar and a knowledgeable bartender. Having a wide selection of cocktails is a great way to offer customers something they can’t get elsewhere. This is especially true if you come up with a few ‘signature cocktails’ that can’t be found anywhere else. If someone finds a new favorite drink that is exclusively served at your establishment, then you can be certain that they will come back.
In addition to crafting the cocktails that customers crave, well-trained bar staff can be a draw all by themselves. Inexperienced or indecisive drinkers will often ask a bartender for their recommendation, while others may simply want someone to talk to. Having friendly and professional bartenders gives people another good reason to come out.
The current situation for bars and restaurants looks bleak, but hopefully once things return to normal people will be eager to patronize their favorite establishments again.
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