Since the onslaught of COVID-19, visiting on-premise locations to socialize was not high on my list. However, these days, I am feeling more comfortable venturing out — and it looks like I’m not alone.
CGA’s latest OPM analysis reveals that consumers in the U.S. are opting to spend more for drinks in bars and restaurants as premiumization drives the recovery of the on-premise channel after COVID-19.
A trend that was paused during the pandemic now is accelerating again, according to CGA’s On Premise Measurement (OPM) service.
“The premium price tier of the spirits market took a 40% share of sales by value in February 2022, while super-premium took 18%,” it says. “The ultra-premium segment had a 4% dollar share, having grown sales by 180% year-on-year. It means that the three premium categories now account for 62 cents in every dollar spent on spirits.”
However, the shift toward premium is creating challenges for some spirit brands in the mid-price tier, which saw its share trimmed to 23% in February, from 25% in the same month in 2021, it adds.
The following are other CGA insights within specific spirits categories:
- Half (50%) of gin sales now come from the premium price tier. Premium and super-premium segments have grown their sales by 137% and 167%, respectively, year-on-year.
- Super-premium tequila’s share of total sales has jumped from 28% to 32% in a year, while the mid-price tier’s share has gone the other way — from 32% to 28%.
- Vodka’s premium price tier has increased its share from 42% to 44%.
- Whiskey’s super-premium and ultra-premium sales have grown by 163% and 165%, respectively, over the last year.
Additionally, there have been more notable moves toward premiumization in other categories that include brandy and rum, which traditionally are dominated by the mid-price category, it notes.
“Celebration and treat occasions are crucial to the U.S. on-premise, and the data suggests that more and more consumers are looking for more premium offerings after two years of disruption from COVID-19, said Patrick Bannon, CGA client director for the Americas, in a statement. “However, mid-priced brands still have a big role to play too, and beverage suppliers and operators that can respond to ever-changing tastes and preferences with the optimal spirits assortment will have a significant competitive advantage.”
As premium takes on a bigger presence in the on-premise channel, it will be interesting to see which brands decision-makers will stock on on-premise shelves.
