The state of the On-Premise Channel in Western Europe

The webinar explored how COVID-19, persistent price pressures, and the cost-of-living crisis impact beverage alcohol sales and continue to affect consumers’ buying decisions in 2023.   

Over the last two years, more beverage alcohol sales shifted from the On- to Off-Premise channel. In Britain, 56% of beer sales now come from the Off-Premise channel compared with 49% in 2019. NIQ’s Price Tracker for Europe also reveals that alcoholic beverage prices increased 12.8% and 5.6% on average in the On and Off Premise respectively over the last 12 months. As a result, half (51%) of European consumers plan to change their On-Premise habits over the next 12 months, according to CGA by NIQ’s global REACH survey. 

These challenges could lead to fewer visits to cafes, bars, and restaurants in 2023. But the situation behind these statistics is incredibly nuanced —there is still a wealth of opportunity for brands to grow in the On-Premise channel in Western Europe.

The case for continued investment in the On-Premise channel

A closer look at CGA’s data reveals that consumers who are most likely to stay in and go out less weren’t going out much to begin with. Frequent visitors, the most important On-Premise consumers, are much less likely to cut back on the number of visits to the channel, and they remain happy to “premiumize” their drink choices to maximize their time out. They are generally willing to prioritize eating and drinking out over other areas of spending, and 63% of French consumers, well over half of British (57%) and German (54%) consumers say they are likely to pay extra for a better-quality drink.  

These consumers are still motivated to visit the On-Premise channel, even as the costs of every-day goods rise. The On Premise is a place consumers go for treats, experimentation, and time with loved ones. The top three reasons for visiting show that half of Western European consumers (50%) say they are looking forward to eating and drinking out with friends this year, while around a third are excited about celebrating special occasions (33%) and treating themselves (36%). 

The webinar also proved how important it is for brand owners to continue to invest in the On-Premise during this challenging time. The channel remains an important shop window for beverage alcohol brands, and is key for driving awareness, equity, consumption, and loyalty. The On Premise provides prime opportunities for encouraging consumers to trial brands via activations. Half (51%) of European consumers who have seen or taken part in one say that it positively impacted their opinion of the brand, and nearly as many (47%) are more likely to buy it as a result.  

Most importantly perhaps, is the fact that On-Premise experiences also heavily influence consumer spending in the Off Premise. For example, three-quarters (74%) of European consumers are likely or very likely to buy a drink for home if they have enjoyed it while they were out in a bar, restaurant, or cafe.  

 “Consumers don’t just live in one part of the market — their behavior constantly moves between the On Premise and Off Premise,” states Graeme Loudon, managing director, EMEA at CGA by NIQ “This crossover makes it essential to build top omnichannel strategies and execute them well on both sides of the market. Suppliers that get a full trade view and synchronize brand communications have a massive head start in the race for market share.” 

Ross Stoddart, VP Global Clients at NielsenIQ, concludes: “The unique fusion of CGA and NielsenIQs sales measurement and consumer research provides a complete view of both sides of the market, and joins up brands’ thinking on opportunities, strategies and growth.”