Abstract
Overview
Introduction
Consumers' alcoholic drinks consumption behaviors are shifting from the flat on-trade to the off-trade. Home-based occasions are rising with consumers seeking to bring the favored aspects of on-trade alcoholic drinks consumption into the home. However, although volume sales are rising, heavy discounting is limiting value growth and undermining the potential in consumers' openness to trading up.
Scope
- Insightful analysis of the evolving consumer migration from on-trade to off-trade alcohol expenditure and the need states and occasions driving this.
- Quantitative data tracking at-home alcoholic drinking occasions by occasion type and country.
- Detailed action points offering practical strategies based on the trends and insights analyzed in the report.
- Covering eight core countries across Europe and North America; France, Germany, Italy, Netherlands, Spain, Sweden, UK and US.
Report Highlights
US consumers' alcoholic drinks purchases account for 72% of total sales. Europe has a noticeably stronger on-trade, but off-trade sales still account for 58%. Both European and US consumers' at-home alcoholic beverage occasions outnumber out-of-home and are exhibiting stronger growth.
Consumers are increasingly less inclined to compromise their quality and sensory needs when making the choice to stay at home rather than go out and drink in the on-trade. They desire authentic on-trade drinking experiences within the comfort and security of their own or their friends' homes.
Consumers, concerned with signs of wider economic uncertainty in the housing and credit markets, are increasingly likely to adjust their spending, cutting back further on on-trade occasions. Manufacturers and marketers can respond by targeting the associated rise in at-home meal occasions and the complementary relationship between alcohol and food.
Reasons to Purchase
- Learn how to drive value in the at-home drinks market by appealing to consumers' home-based needs and encouraging uptake of premium products.
- Access a blend of quantitative and qualitative data aggregating the most compelling and recent research in this increasingly important topic.
- Counter sales volume stagnation and decline by discovering the route to premiumization within the off-trade/at-home context.
Table of Contents
- Overview
- Catalyst
- Summary
- Executive Summary
- Introduction
- The Future Decoded
- Consumers are increasingly opting to stay in
- Off-trade drinking continues to grow as consumers on-trade consumption stagnates
- At-home drinking occasions are increasingly diverse
- The ' discount trap' presents a problem for building value from off-trade sales
- Consumers seek on-trade quality experiences in the home
- Consumers are "front-loading" at home before going out
- Smoking bans are influencing consumers' off-trade drinking behavior
- Attempts to build value in the off-trade may be influenced by the threatened housing/credit crunch
- Health considerations are changing consumers' at-home alcoholic drinking behavior
- Action Points
- TABLE OF CONTENTS
- Table of figures
- Table of tables
- THE FUTURE DECODED
- INTRODUCTION: The strategic importance of the off-trade to theindustry is growing
- TREND: Consumers are increasingly opting to stay in
- Improving and investing in the home encourages consumers to spend more time there
- Consumers are focusing on the home as a comfortable retreat
- US consumers' favorite summer evenings center around home and outdoor social activities
- Cocooning has evolved: consumers want to share their homes with others
- Home entertainment options continue to grow in sophistication
- Take-outs and implications: consumers want products that complement their home-based needs
- TREND: Off-trade drinking is growing while consumers' on-trade
consumption stagnates
- Off-trade sales in the US lead those in Europe as a share of total sales
- At-home alcoholic beverage occasions outnumber going out
- Per capita at-home and going out occasions vary significantly from country to country
- UK consumers drink the most alcohol per on-trade occasion
- Consumers are critical of on-trade value for money
- Price sensitivity plays a role in directing off-trade consumption, but
is far from the only factor
- It is also important to recognize that there are other factors beyond price driving the trend
- Take-outs and implications: industry players should place increasing emphasis on the need states of consumers drinking at home
- TREND: At-home drinking occasions are increasingly diverse
- Entertaining at home is a significant sub-trend in at-home alcohol consumption
- Sports events fuel male at-home drinking behaviors
- Beer is inherently social, both on and off-trade
- Alcohol consumption at home is increasingly allied to meal occasions
- Aging populations will add to the growth in at-home alcoholic beverage occasions
- Weekend alcoholic drinking occasions increasingly occur in the home
- Take-outs and implications: diverse drinking occasions at home have untapped potential, particularly with regard to premiumization
- INSIGHT: The "discount trap" presents a problem for building value from
off-trade sales
- Price-based promotions in the off-trade can negatively impact overall brand equity
- Beer continues to be particularly at risk from cut-price image problems
- Younger consumers are migrating between cheap sub-premium beer and specialty brews
- Take-outs and implications: a major threat to off-trade value generation is the continued emphasis on cut price promotion at the expense of building long term brand equity
- INSIGHT: Consumers want to replicate on-trade quality and experiences in
the home
- Consumers' experiential expectations are high
- Premium-hungry shoppers are looking for the latest on-trade trends on retail shelves
- Poor on-trade experiences and choices are putting consumers off frequenting the channel
- The ' insperiences' trend means that alcoholic beverage consumers are
recreating aspects of the on-trade at home with greater regularity
- Insperiences are offering consumers high quality on-trade experiences with home convenience
- Insperiences and entertaining at-home are tied to the rise of the kitchen as a prominent social space
- The propensity for consumers to pair alcohol and food is a developing trend with historical precedent
- Take-outs and implications: it is important to appeal to off-trade consumers by emphasizing the premium experience that brands can offer in the comfort of the home
- INSIGHT: Consumers are "front-loading" at home before going out
- Europeans show a higher propensity for front-loading than US consumers
- The growth in front loading among UK consumers is particularly notable
- Sweden has the lowest per capita occasions of the countries covered
- Germany is experiencing the fastest decline in both quiet drinking and front-loading occasions
- Take-outs and implications: front-loading is a growth occasion but presents difficulties for encouraging up-trading
- Europeans show a higher propensity for front-loading than US consumers
- INSIGHT: Smoking bans are influencing consumers' off-trade drinking
behavior
- Smoking has been linked to higher alcohol consumption among consumers
- Smokers constitute a sizeable share of the drinking demographic
- Smoking bans have impacted on on-trade sales and changed some consumers' on-trade drinking behavior
- Smoking bans may influence the off-trade behaviors of both smokers and non-smokers
- Take-outs and implications: smoking bans may not have a fundamental impact on the balance between on and off-trade alcohol occasionsINSIGHT: Trading-up in the off-trade may be restricted by the looming housing and credit crunch
- Consumers may look for economies by staying-in
- Take-outs and implications: the industry must prepare for consumers tightening their belts and look to the off-trade for opportunities
- INSIGHT: Health considerations are changing consumers' at-home alcoholic
drinking behavior
- Consumers are moderating their alcoholic beverage consumption
- Alcohol choices at home are being influenced by health considerations
- Health and premiumization foster "less but better" approaches to alcohol consumption
- At-home drinking faces a threat from the so-called "assault on pleasure"
- Take-outs and implications: health and premiumization are complementary trends in the alcoholic beverage space in an era of increasing alcohol disapproval
- INSIGHT: There is evidence that student drinking habits are shifting,
thereby affecting on and off-trade behavior
- Take-outs and implications: industry players must recognize students' changing priorities
- ACTION POINTS
- ACTION: Ensure the off-trade and on-trade brand positioning is
complementary
- Avoid a disconnection between pricing and marketing messages that confuses brand identity
- Ensure that your alcoholic beverage brand stands for something: take ownership of important product trends
- Control the discounting impulse if it threatens brand cach・
- ACTION: Align products more directly with off-trade need states and
occasions
- Capitalize on the fact that relaxation at home connects with individualism and reward
- Market products that "enable" traditional male events
- Covet the opportunities offered through the home ntertaining occasion
- Facilitate social drinking with products that enable sharing or shared experiences
- Trusted brands can be allied to front-loading occasions
- ACTION: Adjust portfolios in recognition of the defining consumer trends
shaping preferences
- Recognize that light beers are well placed to capitalize on the wellness trend
- Help fulfill consumers desire for experimentation and self-expression
- Allow consumers to act on the "less but better" impulse with widened portfolios that support trading up
- Respond to the "Natural" trend
- Organic credentials will become increasingly important
- ACTION: Take the on-trade to the home through branded events
- Branded ' insperiences' are a rapidly developing opportunity
- Look for new opportunities to offer branded experiences in the consumers' home
- Align brands with new, popular forms of at-home entertainment
- Co-branding possibilities exist in the home entertainment arena
- Branded ' insperiences' are a rapidly developing opportunity
- ACTION: Emphasize the specific links between alcohol and food
- ACTION: Ensure the off-trade and on-trade brand positioning is
complementary
- APPENDIX
- Supplementary data
- Definitions
- Methodology
- Further reading and references
- Ask the analyst
- Datamonitor consulting
- Disclaimer
- List of Tables
- Table 1: Off-trade alcoholic beverage sales (% volume), US & Europe, 2001-2006
- Table 2: Alcoholic beverage occasions (millions), going out and at home, Europe & US, 2001-2011
- Table 3: Annual per capita alcoholic beverage occasions, going out and at-home, Europe & US, 2001-2011
- Table 4: US & Europe alcoholic beverages consumption (liters) per occasion, on and off-trade, 2001-2006
- Table 5: Annual at-home alcoholic beverage occasions (millions), US & Europe, by type, 2001-2011
- Table 6: Per capita at-home alcoholic beverage occasions, US & Europe, by type, 2001-2011
- Table 7: Share of alcoholic beverage occasions (%) by type and time of week, US & Europe, 2001-2011
- Table 8: Staying in: alcoholic beverage occasions (millions), by sub-type, 2001-2011
- Table 9: Staying in: per capita alcoholic beverage occasions, by sub-type, 2001-2011
- Table 10: Number of smokers (millions) and as share of adult population (%), US & Europe, 2001-2011
- Table 11: Overall alcoholic drinking occasions (millions), Europe & US, 2001-2011
- Table 12: Alcoholic beverage occasions (millions) by type and time of week, US & Europe, 2001-2011
- List of Figures
- Figure 1: Four key factors motivate consumers to increasingly stay at home
- Figure 2: US consumers favorite summer evening activities are centered around the outdoors and home
- Figure 3: Integrated home entertainment systems fuel consumers' cocooning and hiving behaviors
- Figure 4: The off-trade market in the US is much stronger than in Europe (2006)
- Figure 5: Consumers are more price-conscious when buying alcohol on-trade than off-trade
- Figure 6: US alcohol preferences shift with age from beer and FABs towards "mature" beverages such as wine and whiskey
- Figure 7: UK consumers switch to wine earlier than Americans, peaking in their late-30s
- Figure 8: The "discount trap" threatens off-trade premium value generation
- Figure 9: Consumers still experiment with new alcoholic beverages more in the on-trade than in the home
- Figure 10: Alcoholic ' insperiences' marry on-trade quality, storage and presentation with off-tradeconvenience and accessibility
- Figure 11: Beer Insperiences bring on-trade serving and presentation home
- Figure 12: Non-smoking establishments are preferred by the majority of European and US consumers
- Figure 13: Consumers in the US and Europe are showing a higher propensity for alcohol moderation
- Figure 14: Health considerations have become an important factor in alcoholic drink choices
- Figure 15: Stella Artois' s declining brand image in the UK is a result of a disparity between its upscale positioning and heavy off-trade discounting
- Figure 16: Coors Light has successfully delivered a unified brand message on and off-trade
- Figure 17: Magners has changed the face of the UK cider market by tapping into the individualism and indulgence trends
- Figure 18: Alcoholic drink concepts that emphasize sharing behaviors
- Figure 19: The early success of Heineken Premium Light Lager Beer highlights consumer preference for ' better-for-me' beers that taste good and have strong branding
- Figure 20: Case study: Bacardi Bespoke takes the on-trade experience home
- Figure 21: Co-branding or complementary tie-ins between alcohol and food evoke the premium experience
