Attracting New On-Trade Alcoholic Drinks Consumers in 2006

Consumers across the US and Europe are cutting their consumption of alcohol in bars, restaurants, cafés, hotels and nightclubs. But on-trade alcohol revenues still rose to US$383 billion in 2005, and the number of going-out occasions rose to 34.8 billion. The core on-trade consumer groups and behaviors are changing, and industry players need to adjust to this new landscape.



Report Highlights
Between 2000 and 2005, the total number of on-trade alcoholic drinks occasions rose in both Europe and the US, reaching a total of 26.2 billion occasions in Europe and 8.6 billion occasions in the US. However, average consumption per occasion fell from 54ml of pure alcohol in Europe to 51m, while the US average fell from 79ml to 77ml.

The on-trade consumption gap between male and female drinkers is narrowing in Europe and the US, driven by changing demographics and by the increased attractiveness of the on-trade to female drinkers. Between 2005 and 2010, women's share of US drinks consumption will rise by 0.5% a year, while their share in Europe will grow at 1.6% a year.

The on-trade is going through a period of major transition. There are still strong opportunities for alcoholic drinks marketers and venue proprietors to make profits in the on-trade, but players need to focus on adapting to the changes that are happening and those that will inevitably happen.
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CHAPTER 1 EXECUTIVE SUMMARY 3
The hot topic 3
The future decoded 3
Action points 5
CHAPTER 2 THE FUTURE DECODED 16
Introduction 16
TREND: People are spreading their on-trade alcohol intake 17
The number of on-trade alcoholic drinking occasions is rising 17
Alcohol consumption per occasion is falling everywhere 19
Consumption patterns are different from country to country 22
TREND: On-trade experiences are less reliant on alcohol 25
On-trade soft drinks sales have outstripped alcohol growth 25
Food is becoming vital to the on-trade across the US and Europe 27
Midweek going-out is driving on-trade occasion growth 28
INSIGHT: Beer remains the dominant on-trade drink 30
European drinkers switch to wine, but beer holds up in the US 30
Only spirits have successfully built a price premium 32
Wine and spirits will drive future growth 34
INSIGHT: Midlifers challenge Young Adults as the key on-trade group 36
Midlifers drive growth in Europe and the US 37
Young Adults' share is biggest in Northern Europe 40
Early Midlifers are the new biggest target group 41
INSIGHT: Women are challenging men’s on-trade dominance 42
European drinking venues are decreasingly ‘men-only’ 42
US on-trade egalitarianism gets deeper 44
Women’s drinking behaviors and needs are different from men’s 46
INSIGHT: Smoking bans will speed change in the on-trade 47
Smoking is still popular among consumers and especially drinkers 48
Short-term alcohol sales may be hit by smoking restrictions 49
In the longer term, the on-trade will attract new customers 50
INSIGHT: Health concerns are shaping drinking behavior 51
Consumers believe moderate drinking is healthy 51
Fears of binge drinking persist across all countries 53
The switch to healthy drinking currently favors the off-trade 54
INSIGHT: The home is a tempting alternative to pubs or bars 54
People’s homes offer increasing amounts of entertainment 54
Technology heightens the at-home beer drinking experience 56
Consumers’ homes offer better drinks choices than going out 57
Conclusions 59
CHAPTER 3 ACTION POINTS 60
Target high-growth consumer occasions 60
Market drinks that complement food occasions 60
Target midweek alcohol drinking occasions 62
Tailor new products to changing consumer tastes 63
Develop premium and super-premium beers, wines and spirits 63
Improve on-trade wine ranges 66
Create venues and drinks that attract Midlifers 67
Treat European Early Midlifers like sophisticated Young Adults 67
Provide an escape for US Midlifers and European Late Midlifers 68
Adjust to an increasingly feminized on-trade environment 69
Make venues and promotions female-friendly 69
Make female-friendly beverages available in the on-trade 70
Position the on-trade as a healthy choice 71
Adapt to smoking bans ahead of their introduction 71
Show that on-trade drinking can be actively healthy 72
Make the on-trade experience better than drinking at home 73
Turn bars into comfortable, convenient ‘homes from home’ 74
Create on-trade venues that outclass the off-trade alternative 75
CHAPTER 4 APPENDIX 77
Supplementary data 77
On-trade alcoholic drinks in France 77
On-trade alcoholic drinks in Germany 79
On-trade alcoholic drinks in Italy 81
On-trade alcoholic drinks in the Netherlands 83
On-trade alcoholic drinks in Spain 85
On-trade alcoholic drinks in Sweden 87
On-trade alcoholic drinks in the UK 89
On-trade alcoholic drinks in the rest of Europe 91
Definitions 93
Research methodology 95
Future readings 95
Report writing team 96
How to contact experts in your industry 96
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Table 1: Answers to the question “Will the volume share of on-trade alcohol consumption rise or fall over the next five years?”, 2005 16
Table 2: On-trade alcoholic drinking occasions, US and Europe (millions), 2000-2010 17
Table 3: On-trade alcoholic drinking occasions per person per week, US and Europe, 2000-2010 18
Table 4: Alcohol consumption per on-trade drinking occasion, US and Europe (ml of pure alcohol), 2000-2010 20
Table 5: Spending per on-trade drinking occasion, US and Europe (US$/occasion), 2000-2010 21
Table 6: On-trade alcohol volume sales, US and Europe (liters of pure alcohol m), 2000-2010 23
Table 7: On-trade alcoholic drinks spending, US and Europe (US$ m), 2000-2010 24
Table 8: On-trade soft drinks spending, Europe and US, 2000-2010 (US$ m) 25
Table 9: On-trade soft drinks spending as % of on-trade alcoholic drinks spending, Europe and US, 2000-2010 (%) 26
Table 10: Forecast profit-sector foodservice compound annual growth rate, 2005-2010 (%) 27
Table 11: On-trade alcoholic drinking occasions in the US and Europe, midweek versus weekend (%), 2000-2010 29
Table 12: On-trade alcoholic drinks category share in Europe, by volume of pure alcohol (%), 2000-2010 31
Table 13: On-trade alcoholic drinks category share in the US, by volume of pure alcohol (%), 2000-2010 32
Table 14: Relative on-trade alcoholic drinks prices in Europe, by volume of pure alcohol (average = 100), 2000-2010 33
Table 15: Relative on-trade alcoholic drinks prices in the US, by volume of pure alcohol (average = 100), 2000-2010 34
Table 16: Answers to the question “How will on-trade sales of the following product types change over the next five years?”, 2005 34
Table 17: Answers to the question “How is the on-trade price per unit of the following product types (excluding inflation) likely to change over the next five years?”, 2005 35
Table 18: Perceived importance of different demographic groups to the on-trade alcoholic drinks industry, 2005 36
Table 19: European on-trade alcoholic drinks consumption index by age group (average adult = 100), 2000-2010 38
Table 20: Average age at first marriage and childbirth, Europe and US, 2005 38
Table 21: US on-trade alcoholic drinks consumption index by age group (average adult = 100), 2000-2010 39
Table 22: Young Adults’ share of on-trade alcoholic drinks consumption, US and Europe, by volume of pure alcohol, 2000-2010 40
Table 23: Perceived on-trade alcoholic drinks growth potential of different demographic groups, 2005 41
Table 24: Europe on-trade alcoholic drinks consumption index by gender (average adult = 100), 2000-2010 43
Table 25: Women’s share of on-trade alcoholic drinks consumption in Europe, by volume of pure alcohol, 2000-2010 44
Table 26: US on-trade alcoholic drinks consumption index by gender (average adult = 100), 2000-2010 46
Table 27: Prevalence of regular smokers in the US and Europe (%), 2000-2005 48
Table 28: Home entertainment penetration rates (% population), US and Europe, 2005 55
Table 29: France on-trade alcoholic drinks spending (US$ m), 2000-2010 77
Table 30: France on-trade alcoholic drinks consumption (liters m), 2000-2010 77
Table 31: France on-trade alcoholic drinks consumption index by age group (average adult = 100), 2000-2010 78
Table 32: France on-trade alcoholic drinks consumption index by gender (average adult = 100), 2000-2010 78
Table 33: Germany on-trade alcoholic drinks spending (US$ m), 2000-2010 79
Table 34: Germany on-trade alcoholic drinks consumption (liters m), 2000-2010 79
Table 35: Germany on-trade alcoholic drinks consumption index by age group (average adult = 100), 2000-2010 80
Table 36: Germany on-trade alcoholic drinks consumption index by gender (average adult = 100), 2000-2010 80
Table 37: Italy on-trade alcoholic drinks spending (US$ m), 2000-2010 81
Table 38: Italy on-trade alcoholic drinks consumption (liters m), 2000-2010 81
Table 39: Italy on-trade alcoholic drinks consumption index by age group (average adult = 100), 2000-2010 82
Table 40: Italy on-trade alcoholic drinks consumption index by gender (average adult = 100), 2000-2010 82
Table 41: Netherlands on-trade alcoholic drinks spending (US$ m), 2000-2010 83
Table 42: Netherlands on-trade alcoholic drinks consumption (liters m), 2000-2010 83
Table 43: Netherlands on-trade alcoholic drinks consumption index by age group (average adult = 100), 2000-2010 84
Table 44: Netherlands on-trade alcoholic drinks consumption index by gender (average adult = 100), 2000-2010 84
Table 45: Spain on-trade alcoholic drinks spending (US$ m), 2000-2010 85
Table 46: Spain on-trade alcoholic drinks consumption (liters m), 2000-2010 85
Table 47: Spain on-trade alcoholic drinks consumption index by age group (average adult = 100), 2000-2010 86
Table 48: Spain on-trade alcoholic drinks consumption index by gender (average adult = 100), 2000-2010 86
Table 49: Sweden on-trade alcoholic drinks spending (US$ m), 2000-2010 87
Table 50: Sweden on-trade alcoholic drinks consumption (liters m), 2000-2010 87
Table 51: Sweden on-trade alcoholic drinks consumption index by age group (average adult = 100), 2000-2010 88
Table 52: Sweden on-trade alcoholic drinks consumption index by gender (average adult = 100), 2000-2010 88
Table 53: UK on-trade alcoholic drinks spending (US$ m), 2000-2010 89
Table 54: UK on-trade alcoholic drinks consumption (liters m), 2000-2010 89
Table 55: UK on-trade alcoholic drinks consumption index by age group (average adult = 100), 2000-2010 90
Table 56: UK on-trade alcoholic drinks consumption index by gender (average adult = 100), 2000-2010 90
Table 57: Rest of Europe on-trade alcoholic drinks spending (US$ m), 2000-2010 91
Table 58: Rest of Europe on-trade alcoholic drinks consumption (liters m), 2000-2010 91
Table 59: Rest of Europe on-trade alcoholic drinks consumption index by age group (average adult = 100), 2000-2010 92
Table 60: Rest of Europe on-trade alcoholic drinks consumption index by gender (average adult = 100), 2000-2010 92
Table 61: Definitions of terms 93
Table 62: Definitions of drinking occasion 94




Figure 1: On-trade growth patterns show little regional consistency 22
Figure 2: Midweek going-out occasions are rising in Europe and the US 29
Figure 3: European women’s on-trade alcohol consumption is gradually catching up with men’s 43
Figure 4: The gender gap in US on-trade consumption is disappearing 45
Figure 5: Brewers are increasingly targeting female on-trade drinkers 47
Figure 6: Home beer pumps provide on-trade quality beer at off-trade prices 56
Figure 7: Consumers vary their drinks choice by occasion and need state 58
Figure 8: Leffe’s website actively promotes the super-premium beer as a meal complement and wine replacement 61
Figure 9: Even mass-market products can be marketed on the basis of quality 64
Figure 10: Grey Goose spread from upscale bars to the mass market based on its image and style 65
Figure 11: There is a significant gender difference in bar preference 70
Figure 12: Demystifying wine in a friendly atmosphere is a good way of appealing to female consumers 71
Figure 13: Magners has built on the “time dedicated to you” concept 73
Figure 14: On-trade venues can offer direct as well as indirect convenience 74
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