Cocktails - “Defying Cost of Living”

The number of cocktail drinkers is on the rise! Research late last year revealed that on trade cocktails had increased by 11 percentage points

Despite the current economic climate , the sector has seen, post-lockdown, a return to market has seen a growth in demand for premium ser ves amongst treat-seeking consumers But, the price of cocktails is rising, against a broader market backdrop of growing inflation and a costof-living crisis

As a result, consumers are increasingly focusing on price and value And their price-consciousness highlights a renewed onus on pricing and promotional mechanics for the categor y

CGA by NielsenIQ’s sur vey of 1,000 nationally representative GB On Trade cocktail drinkers in 2022 revealed that 19% of GB consumers drink cocktails out of home Out of 9 million cocktail drinkers, 67% are ver y likely or quite likely to pay more for a higher quality cocktail, (+7pp vs Q1 2021)

Many consumers are undecided on the cocktail they will choose before visiting But the most impor tant factors when choosing a cocktail are –

1 flavour(s)

2 ngredients

3 s already tr ied and tested

4 on promotion

5 pr ice compared to other coc ktails

The cost challenges currently facing bars, pubs and nightclubs mean that costs are being squeezed, and some price rises will have to be passed on These cost expectations have grown across the On Premise with consumers expecting sharp increases to prices on each drink in restaurants (+£1 18) and nightclubs (+£1 51) vs Q1 2021 This includes significant increases in expected price points for cocktail ser ves, with inflated prices especially in the nightclub sector

“VALUE FOR EXPERIENCE”

Despite cost of living increases, consumers are still planning to prioritise food and drink spend, but they are increasingly “value led” For a significant propor tion of consumers, this means “value for experience”, for example – is the price wor th paying for? Value is considered to be more impor tant than price , however value doesn t necessarily mean cheaper, but can be considered synonymous with quality To this end, high-quality, premium cocktails that are par t of a memorable experience will keep visitors coming back

Price is also impor tant to consumers even if it’s not the most important factor in choosing a cocktail – with 56% of consumers purchasing this drink type on promotion ever y time or almost ever y time they go out for cocktails (+8pp vs Q1 2021) In addition, non-cocktail drinkers are 32% more likely to be tempted by an offer to change to the categor y

Phillip Montgomer y, director of client ser vices – UK & Ireland, said: “Many consumers are alleviating the rising cost of cocktails by focusing more on the availability of deals and promotions, as they assess the value outlets are offering So, offering cocktails at great value is impor tant for operators and suppliers hoping to appeal to a much broader consumer base rather than just competing for consumers who actively seek high quality cocktails ”

Branded Spirits

The latest CGA Consumer Impact repor t shows that in the past month 2 in 5 consumers have visited the On Premise 3 or more times and 56% of consumers ’ last trip to the On Premise was within the past week Visitation levels remain positively steady compared to the previous month, however 38% of consumers have been out for a drink-led visit, up +2pp compared to July; likely driven by consumers wanting to make the most of patio season and the warmer weather

Significantly, the repor t reveals that almost 3 in 5 cocktail drinkers have seen cocktails listing branded spirits on menus when visiting bars and/or restaurants in the past 3 months, and 44% have subsequently ordered these cocktails

Among consumers who have ordered cocktails including branded spirits in the past 3 months, 2 in 5 have done so ever y time/almost ever y time they have visited the On Premise – highlighting the influence this brand exposure has when positioned as a key ingredient in a preferred cocktail type

There is still significant room for growth in this area for brands to entice consumers to tr y a branded spirit in a cocktail by optimising this crucial par t of the consumers ’ path to purchase – 52% of consumers order cocktails with branded sprits only occasionally when visiting bars and/or restaurants

Typically, when ordering spirits, 43% of spirits drinkers order by specific brand, while just over a third (33%) order the categor y generally, and 24% do so depending on the situation This presents suppliers with the oppor tunity to engage loyal brand consumers, and to drive consumers to trial brands when presented in a range of cocktail ser ves

Matthew Crompton regional director – Nor th America said “Casual dining chains continue to be the most visited venue type in the On Premise , with over half of consumers visiting the channel in the past 3 months Working effectively with target outlets to get branding and branded descriptions on menus can help boost visibility fur ther to influence cocktail choice It’s impor tant for suppliers to consider the effectiveness of branded and non-branded options when building On Premise strategies with operators and independents ”

Steady Level Of Consumer Visits

On Premise satisfaction remains high across the board, par ticularly around quality of ser vice The research also suggests operators and suppliers can expect steady levels of consumer visits to bars and restaurants in the upcoming month, and new oppor tunities to entice target consumers to repeat purchase and trial brands

“Being able to truly understand the nuances of consumer preferences, need states and motivations to influence effective decision-making is key to success On Premise occasions are impor tant to consumers and suppliers and operators need to be able to cater to the needs and expectations during visits, said Matt Crompton