Sober nightlife is on the rise. According to new data from Nielsen CGA, there’s been a 15% decrease in the number of times Millenials are drinking out on a weekly basis - however, they are still very much visiting the on premise. Nielsen CGA OPUS (On Premise User Survey) numbers show the moderation trend is being driven largely by the 21-34 aged consumer, but gaining traction across the total U.S. population. In fact, 54% of consumers made a conscious decision to abstain from alcohol at some point during the last year, with 50% of people citing health and wellness as their main reason for reducing the amount they drink. Earlier this year, Dry January was particularly popular, with 1/5 (21%) of consumers participating in the month-long alcohol-free challenge. Of that 21%, a considerable 83% will also be taking part in Dry January 2020 (in addition to potential newcomers to the challenge).
With alcohol-free bars opening across the globe, the demand for no and low alcoholic beverages is showing no signs of slowing down. While abstinence has the potential to threaten alcohol-led brands and outlets, there is significant opportunity to claim back revenue for on-premise operators.
According to Matt Crompton, director of Nielsen CGA, “It’s no secret that we are seeing more and more US consumers looking to cut back or completely cut off their alcohol supply. Events like Dry January are no longer one-offs and for some, abstinence stretches throughout the year. However, consumers are showing an enduring thirst to still have a bar experience - and therefore, an opportunity to claim back revenue. The secret will be to understand how to cater to this new drinking preference to help deliver an alternative, fun night out for patrons, without alcohol.”
For bar and restaurant owners it is important for them to understand that abstainers typically fall into two categories: those who choose low or no alcohol alternatives and those who choose soda, soft drinks and water. Compared to the soft drinkers, no or low drinkers bring more value since they visit the on-premise more frequently (40% visit once a week) and typically spend $23 more a month than soft drinkers do.
So, what are the products to stock? While soda, juice and water will always be an option for abstainers, a robust offering of non-alcoholic beers and/or an attractive alcohol-free cocktail menu will help drive consumer spend, and appeal to the widest market. It should be noted that no and low alcoholic beer is actually the 5th fastest growing beer type in the United States and is worth a staggering $77 million at a total US level within On Premise channels.
Crompton continues, “The best outlets out there will now be looking at broadening their soft drinks range with a mixture of low and non-alcoholic alternatives, near beers, premium soft drinks and health-focused, alternative drinks such as Kombucha and botanical tinctures. By highlighting the health benefits and the variety of choice for abstaining consumers, bars and drink brands can expect to bring in more revenue.”