On-premise Alcohol Trends - US - October 2019

OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY 
Top takeaways
The issues
Americans drink at home most often
Figure 1: Alcoholic beverage consumption by location – Net, July 2019
Gen Zers drink less than Millennials or Gen Xers
Figure 2: Alcoholic beverage consumption by location – Net, by generation, July 2019
The opportunities
Diners are drinking AFH more often
Figure 3: Changes in AFH drinking, July 2019 and January 2018
Social occasions are top AFH drinking occasions
Figure 4: On-premise alcohol occasions – Net: any drink, July 2019
One-fifth of diners always try a new drink
Figure 5: Adventurous drinker segmentation, July 2019
THE MARKET – WHAT YOU NEED TO KNOW
AH still leads for alcohol consumption, but AFH sales are growing faster
Beer continues to dominate, while spirit sales surpass wine sales
Hard seltzers appeal to health-conscious consumers
MARKET SIZE AND FORECAST
Projected YOY on-premise sales growth
Figure 6: Total US sales and fan chart forecast of market, at current prices, 2014-24
Figure 7: Total US sales and forecast of on-premise alcohol, at current prices, 2014-24
MARKET BREAKDOWN
On-premise alcohol sales grow faster than off-premise
Figure 8: Share of US sales of alcoholic beverages, by location of consumption, at current prices, 2014-19 (est)
Beer remains consumers’ top alcohol choice
Figure 9: Share of US sales of alcoholic beverages, by type of alcoholic beverage, 2014-19 (est)
Figure 10: Total US on and off-premise sales and fan chart forecast of beer, at current prices, 2014-24
Figure 11: Total US volume sales and forecast of beer and craft beer, 2014-22
Wine continues to experience steady growth
Figure 12: Total US sales and fan chart forecast of wine, at current prices, 2014-24
Figure 13: Total US volume sales and forecast of wine, 2014-22
Figure 14: Wine launches by share of packaging type, 2014 and 2019*
Spirit sales projected to overtake wine sales
Figure 15: Total US sales and fan chart forecast of spirits, at current prices, 2014-24
Figure 16: Distribution of spirits sales by volume, by segment, 2019 (estimate)
Figure 17: Total US volume sales of spirits, by segment, 2017 and 2019
White spirits
Figure 18: US volume sales and forecast of white spirits, 2014-22
Dark spirits
Figure 19: US volume sales and forecast of dark spirits, 2014-22
Figure 20: US volume sales of whiskey/whisky, by type, 2014-19
RTD alcoholic beverages
Figure 21: Total US volume sales and forecast of flavored malt beverages, 2014-22
Figure 22: Total US volume sales and forecast of spirits-based prepared cocktails, 2014-22
Figure 23: Total US volume sales and forecast of wine coolers, 2014-22
MARKET PERSPECTIVE
Legalization of marijuana could be competition for alcohol
Figure 24: Cannabis statements, July 2019
Hard seltzers appeal to health-conscious consumers
Figure 25: Spiked spritzers
Figure 26: Four Loko tweet, 8/13/19
Figure 27: Bartles & Jaymes premium wine coolers
MARKET FACTORS 
Economic instability could curb going out
Figure 28: Consumer Sentiment Index, January 2007-August 2019
Millennials prioritize health over alcohol
Figure 29: Barriers to health and wellbeing improvement, by any rank and Millennials, March 2018
KEY PLAYERS – WHAT YOU NEED TO KNOW 
Bars face sobering times
Eatertainment venues attract patrons with games and high-quality menus
Restaurants struggle to implement alcohol delivery operations
Bars roll out CBD cocktails despite unclear federal approval
Lambrusco bubbles up on menus
WHAT’S WORKING?
Serving up drinks with a side of fun
Bars appeal to the spectrum of sober patrons
Bitter flavors hit the mark on menus
Figure 30: Increase in menu incidence for select bitters as an ingredient in alcoholic beverages, Q2 2016-Q2 2019
Figure 31: Increase in menu item claim incidence for bitters as an ingredient in alcoholic beverages, Q2 2016-Q2 2019
WHAT’S STRUGGLING?
Alcohol delivery has difficulties taking hold
Putting CBD on the menu is still TBD
WHAT TO WATCH
Is Lambrusco the next rosé?
Less is more for cocktail drinkers
THE CONSUMER – WHAT YOU NEED TO KNOW 
Nearly a quarter drink AFH more often
Alcoholic beverage variety is important for diners
Among those drinking less, price and health are concerns
Socialization drives alcoholic and non-alcoholic beverage purchase
ALCOHOLIC BEVERAGE CONSUMPTION BY LOCATION
Consumers drink more often AH than AFH
Figure 32: Alcoholic beverage consumption by location – Net, July 2019
Over half drink at a casual dining restaurant chain
Figure 33: Alcoholic beverage consumption by location – Net: any alcohol, July 2019
Figure 34: TGI Friday’s email, “$5 Fridays 'Rita – All month long,” May 1, 2019
Adventurous drinkers more likely to choose fast casual restaurants
Figure 35: Alcoholic beverage consumption by location – Net: any alcohol, by adventurous drinker segmentation, July 2019
Figure 36: District  Brew Yards’ beer wall
Figure 37: Lux bar drink menu
Gen Zers drink less than Millennials or Gen Xers
Figure 38: Alcoholic beverage consumption by location – Net, by generation, July 2019
Figure 39: Alcoholic beverage consumption by location – Net, by race and Hispanic origin, July 2019
AFH ALCOHOL CONSUMPTION BY TYPE
RTD alcoholic beverages are primed for on-premise consumption
Figure 40: Alcoholic beverage consumption by location – Net, July 2019
Figure 41: Alcoholic beverage consumption by location, July 2019
A variety of alcoholic beverages appeals to diners
Figure 42: Repertoire of alcohol consumption – Net: any frequency, July 2019
Figure 43: Carrabba’s Bar & Grill email: “Your Invited August Wine Dinner,” August 6, 2019
CHANGES IN AFH DRINKING 
Diners are drinking AFH more often
Figure 44: Changes in AFH drinking, July 2019 and January 2018
Figure 45: Changes in AFH drinking, by select demographics, July 2019
Figure 46: Longhorn’s email: “Look inside the best gifts for dad”, 6/13/2019
Figure 47: Shore Club’s frozen cocktail flight
REASONS FOR DRINKING AFH MORE 
Socializing is a key driver for drinking AFH
Figure 48: Reasons for drinking AFH more often, July 2019
Men are more motivated by drink variety
Figure 49: Reasons for drinking AFH more often, by gender, July 2019
REASONS FOR DRINKING AFH LESS 
Overall alcohol reduction accounts for decreased AFH drinking
Figure 50: Reasons for drinking AFH less often, July 2019
Health is a growing reason for drinking less AFH
Figure 51: Reasons for drinking AFH less often, July 2019 and January 2018
ON-PREMISE ALCOHOL OCCASIONS 
Social occasions are top AFH drinking occasions
Figure 52: On-premise alcohol occasions – Net: any drink, July 2019
AFH drinkers choose beer for a broad spectrum of occasions
Figure 53: On-premise alcohol occasions, July 2019
Beers are for all occasions
Wines are for food
Spirits are for celebrations
NEW DRINK TRIAL MOTIVATORS
One fifth of diners always try a new drink
Figure 54: Adventurous drinker segmentation, July 2019
Young, urban consumers most likely to try new drinks
Figure 55: Adventurous drinker segmentation – Always try new drinks – CHAID – Tree output, July 2019
Figure 56: Adventurous drinker segmentation – Sometimes try new drinks – CHAID – Tree output, July 2019
Almost four in 10 choose drinks based on flavors
Figure 57: New drink trial motivators – Net: any rank, July 2019
Men motivated by branding
Figure 58: New Drink Trial Motivators – Net: any rank, by age and gender, July 2019
Quality seekers motivated by server recommendations
Figure 59: New drink trial motivators – Net: any rank, by food and drink segmentation, July 2019
NON-ALCOHOLIC DRINK MOTIVATORS
Diners want to be social with or without drinking
Figure 60: Non-alcoholic drink motivators – Net: any rank, July 2019
Men may need help with moderation; women with calorie reduction
Figure 61: Non-alcoholic drink motivators – Net: any rank, by age and gender, July 2019
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Fan chart forecast
Consumer survey data
Consumer qualitative research
Direct marketing creative
Abbreviations and terms
Abbreviations
Terms
Mintel food and drink shopper segmentation
APPENDIX – THE MARKET 
Figure 62: Total US sales and forecast of market, at inflation-adjusted prices, 2014-24
APPENDIX – THE CONSUMER 
CHAID Analysis Methodology
Figure 63: Adventurous drinker segmentation – CHAID – Table output, July 2019