NIQ dives deeper into on-trade drinks

NielsenIQ (NIQ) is taking a deeper dive into drinks analysis in the on-trade to measure the impact of consumer trends more effectively.

The intelligence company revealed that it will be “expanding its measurement of on-premise markets (OPM) globally” to assist in “delivering the most complete understanding of consumer buying behaviour and revealing new pathways to growth”.

To support this, NIQ analysts said in a recent statement to the sector how the hospitality sector is “crucial for connecting with consumers and building brand equity for beverage alcohol brands” and reminded that it “accounts for 61% of global beverage alcohol value sales, making it vital for brand owners to continue to invest in the channel”.

The analysts also pointed out that the on-trade also “provides an important platform for building brand equity and long-term consumer loyalty” and noted that “this, in part, is demonstrated by the fact that beverage alcohol brands have overall been less impacted by the threat of private label than other FMCG categories.”

For instance, the volume of private labels in the on-trade accounts for “less than 10% of total sales,” a figure that is said to be “far lower than the equivalent for other FMCG categories,” its team added in its statement.

Evolving

According to the consumer intelligence firm, “innovative serve strategies and activations which connect with consumers and ensure elevated quality will be key to maintaining a positive perception of value among consumers” as well as building long term success for alcohol brands and the on trade.

Speaking about the business taking a greater focus into the hospitality sector, NIQ managing director for global clients Phil Tate admitted that research has shown how so many things connecting drinks and the on-trade have been “evolving rapidly around the world”.

Tate explained that “alcohol consumption may be falling, but bars, pubs and restaurants are still pivotal to consumers’ lives” and highlighted how, despite this, “while moderation is clearly impacting beverage alcohol performance, people’s shifting drinks preferences are opening new opportunities in other categories”.

Tate insisted that pubs bars and restaurants remain “a vital channel for growing brand equity, and association with memorable moments” and described the channel as “a powerful way to secure trial and loyalty”.

He added that “with some consumer cost pressures easing and younger adults particularly engaged, there is significant headroom for growth in the months and years ahead”.

The firm also highlighted how “83% of global legal drinking age consumers” have visited pubs, bars and restaurants in the last three months, “with 62% visiting weekly”.

Other elements noted was that “visitation has remained stable globally, despite most consumers feeling financially worse off than they were last year” and it was reiterated that the on-trade “plays a vital role in facilitating connections with friends and loved ones”.

Fall

The on-trade “accounts for 61% of global beverage alcohol value sales (excluding wine)” and, although visits are stable, global on-trade sales of “beer, malt beverages and cider volume sales have fallen by 4% in the last 12 months” while “spirits have fallen by 7.6% in volume and 3,4% value respectively”. Plus, “there have been particularly sharp drops in brandy, rum, and gin sales in key markets, while others including Tequila and vodka have performed better”.

NIQ also noted that “Gen Z and younger Millennials (to age 34) are most likely to increase their visits” to pubs, bars and restaurants over the next three months.

According to NIQ, alongside OPM, it also conducted a study of 30,000 consumers in pubs, bars and restaurants across 38 markets to reveal that even though consumer visits to venues remain high, “consumers’ relationship with alcohol is mixed, with more than a third (37%) of consumers now drinking less alcohol than they were 12 months ago” with Generation X and infrequent visitors to pubs, bars and restaurants being “most likely to be cutting their alcohol intake”.

OPM is powered by on-trade experts CGA, which was acquired by NIQ in 2022 and has been refined by CGA over many years in the UK and US, delivering in-depth analysis of sales, distribution and pricing by region and channel to help drinks brand owners see success in multiple markets. It has now been expanded to key countries including Australia, Canada, Germany and France, with South Korea to follow soon.