Historically in the US, approximately 80% of alcohol sales were conducted at off-premise retail establishments with the remaining 20% being dedicated to the on-premise (bars, restaurants).
What’s driving the ‘at-home’ occasion?
- For more than 20 years, the United States has seen off-premise alcohol consumer expenditures outpace that of the on-premise.
- Between 2000 and 2020, on-premise prices have consistently risen across all categories. Data shows that in the same time period, off-premise prices have been increasing as well, however, at lower rates than that of the on-premise.
- The number of restaurants serving alcohol in the US has decreased by 20% from 2001 to 2019. There have also been a number of smaller, but crucial, drivers that have also been influencing consumer behavior: stricter DUI laws, the societal/generational shift towards online experiences, food delivery services, and the rise in on-demand at-home entertainment options.
We have analyzed white wines listed in the liquor stores of Florida, USA
1. Cakebread Cellars
2. Cloudy Bay
3. La Crema
4. Rombauer Vineyards
6. Castello Banfi
8. Louis Latour
9. Santa Margherita
11. Dr. Loosen
12. Ecco Domani
14. Kenwood Vineyards
15. Louis Jadot
What appeals to the ‘at-home’ drinker
- Wine significantly skewing towards female consumers and beer skewing towards male drinkers.
- The 25-34-year-old bracket leads all others for beer and spirits, while wine is dominated by those 65 years and older. What’s interesting is that the much sought after 21-24-year-old bracket prefers spirits, beer and then wine
- The income brackets that outpace others (in ranked order) includes $100,000-$149,999, which prefer spirits. The $150,000-$249,999 bracket prefers wine. The $25,000-$49,000 income bracket is split rather evenly across spirits, wine and beer.
2. Napa Valley
4. Russian River Valley
5. Sonoma County
6. Venezia Giulia
7. Sonoma Coast
9. Columbia Valley
11. Central Coast
13. Rias Baixas
14. Willamette Valley
15. Alto Adige
What is the long-term importance of these ‘at-home’ occasions post-pandemic?
- Trends prior to Covid-19 show more millennials living alone and without children than previous generations, and Gen Z is likely to follow a similar pattern. This group has grown comfortable with staying home and/or communicating digitally, from ordering food/alcohol delivery and online dating to connecting with friends – all occasions that would have once centered around the on-premise
- While there has currently been a significant increase in off-premise beverage alcohol volumes, it has not been enough to compensate for the losses in the US on-premise.
- Convenience is the driving factor for consumer popularity of e-commerce purchases.
A full return to the on-premise will largely be dictated by the development of a vaccine as well as consumer confidence to return to bars and restaurants amidst social distancing measures. This new dynamic of operations to survive the pandemic changes how beverage alcohol producers will meet the current needs of bars and restaurants in the US.