Consumer spend in the on-trade holds steady in September Demand in the on-trade held steady in September, despite the squeeze on consumers’ disposable income. 52% visited the trade weekly, up 8pp vs August, driven by consumers going out more for special occasions. Whilst a third of consumers are going out less, mostly due to inflationary concerns, the vast majority (63%) have been going out the same (32%) or more (31%) than usual. When out, drinks consumers are typically maintaining how much they usually spend per visit (42%) rather than decreasing it (32%). Moreover, 1 in 4 have been increasing their spend, driven mainly by rising prices (69%) as well as treating/celebrating (53%). This is reflected in market data: in the 12 weeks to 10th September, drinks value in the on-trade is on level (-0.3%) compared to 2019, whilst equivalent serves are down 8.3%. It’s clear that drinks consumers want to protect their on-trade spending: 69% of consumers say the on-trade is “the treat I most look forward to” and they are more likely to prioritise going out (45%) than clothing (33%) or international holidays (23%) as budgets tighten. Drinks occasions are also more protected than food. This all suggests that we will see premiumisation trends continue for drinks categories in the on-trade. Sources: PROOF Insight POURtraits research Sept 2022, CGA Pulse September 2022, CGA OPM MAT to 10.09.22 |
Affordability is crucial for nightclubs Despite increases in spend on a late night out, around 9 in 10 will reduce the amount they go out as budgets tighten due to the cost-of-living crisis. According to Rekom’s UK Night Index, the average total spend on a night out is now £73.36 – an increase of 6.8% since March 2022. When spend was broken down, it was revealed that spend on pre-drinks (up 16.8%) and transport (up 11.4%) had increased the most, whilst spend on drinks in the venue has increased by 3.7% to £20.29. As the cost-of-living crisis squeezes budgets, around 47% have already or will be significantly reducing the frequency of their nights out with a further 30% saying they have already or will be marginally reducing the frequency. Around 1 in 10 claim that they have stopped going out completely, or will have to do so in the coming months. Many drinks consumers say they will look to pre-drinking to mitigate the cost of a night out, with 38% opting to pre-drink more at home and 33% buying cheaper drinks to pre-drink with, showing the opportunity for the off-trade in student-led cities. When out, 28% will look to mitigate costs by going to less expensive venues and 27% will buy cheaper drinks in the venue. Pricing is the second most important factor in choosing a venue, so offering an affordable option will be key to tempt consumers away from their homes and into nightclubs. Sources: Rekom UK Night Index October 2022, Spirits Business |
Spirits and cocktails are the key to Halloween success This weekend will see the first COVID restriction-free Halloween since 2019, with younger consumers looking to celebrate. PROOF Insight’s consumer survey revealed that 58% of 18-34s will be celebrating Halloween this year, making them almost twice as likely as the average UK consumer to do so. The holiday represents a significant opportunity for both the on-trade and off-trade, with 36% of 18-34s looking to attend a Halloween themed event in the on-trade and a further 36% doing so in the off-trade. Spirits and cocktails drinks trends are key to success during Halloween. In 2019, vodka and tequila both saw sales uplifts of over 100% compared to the average day whilst liqueur, rum and whiskey also saw significant uplifts of over 50%. Typically, Halloween consumers spend 36% more than the average consumer. This spend can be unlocked with drinks promotions such as 2 for 1 or 2 for £X deals. Themed drinks will also encourage consumers to spend more, with 8 in 10 of 18-34s interested in trying a Halloween themed drink this year. Premium bars and party spaces have historically seen the greatest uplift during Halloween, with spirits serves increasing by over 100% compared to the average day in 2019. There is also a significant opportunity for local pubs and hotels who saw a spirits uplift of 17.4% and 7.8% respectively. With Halloween taking place on a Monday (31st), there are opportunities for venues to capture spend with themed events throughout this weekend. Sources: PROOF Insight Consumer Survey October 2022, CGA Halloween in the GB on-trade 2020 |
Investments, Mergers & Acquisitions
Sources: Big Hospitality, Propel, Drinks Business, Spirits Business, Langton Capital |
New Drinks Product Launches & Campaigns
Sources: Drinks Business, Spirits Business |