Industry

Why Off- Premise Consumption is Eating into On-Premise Performance

June 29, 2017
Wine & Spirits Daily
As American consumers increase their alcohol intake at home, the on-premise channel shifted some share over to off-premise in 2016, a trend both Nielsen and IWSR have pointed out to your editors recently.
 
In a presentation during the annual NABCA convention, Nielsen's Danny Brager shared that volume growth for wine grew 1.5% off-premise and 1.2% on-premise, while spirits volumes grew 2% off-premise and 1.4% on-premise.
 
According to Nielsen, the key reasons consumers are opting to spend more time drinking at home include:
 
.         Popularity of pre-gaming
.         E-commerce
.         Prepared meals/ meal kits
.         Airbnb taking people out of hotel bars
.         More people working from home (lunch impact)
.         Drinking/driving laws
.         Cost/value of drinks under more scrutiny
 
"The transparency of on-premise mark-ups makes it easier for people to weigh the cost of eating out and paying $12.00 for a glass of wine, versus buying that same bottle of wine for $24.99," IWSR's Brandy Rand tells WSD.
 
Zeroing in on what IWSR considers the two most important factors behind the increase off-premise, convenience and cost, Brandy says: "Most people believe they can make a meal or cocktail at home better--and cheaper--than going out," she says. In addition, prepared foods at grocery stores are on the rise, and replacing casual dining. "In the end, it's about what's most convenient," says Brandy, and technology is making at-home consumption more convenient.
 
Subscription food and beverage services, and meal kits like Hello Fresh and Blue Apron, allow consumers to get their hands on items that might not be available in their neighborhood grocery store, which they might have formerly relied on on-premise for.
 
"As more and more technology is actually enabling and telling people what to buy, that brand experience and brand resonance becomes crucially important," said Jordan Rost, Nielsen's vp of consumer insights, at the NABCA convention.
 
 
 
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