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On-premise Alcohol Trends - US - May 2015

“Millennials offer an opportunity for restaurants to cater to their unique tastes and desires, as this group is more likely to drink at restaurants than are other generations. Operators that offer distinct drinks such as specialty cocktails and restaurants’ own brand of alcohol can help create the quality dining experience this group desires. More LSRs should consider offering alcohol as Millennials are very likely to eat at these types of restaurants.”

– Julia Gallo-Torres, Senior Analyst, Foodservice

This report covers the following issues:

  • How can restaurants draw Millennials?
  • How should restaurants appeal to at-home drinkers?
  • Can LSRs compete with FSRs for share of alcohol spending?

Improving economic conditions are prompting more consumers to spend on dining out, although some remain cautious about pricing and are likely to be motivated to order alcohol by drink specials. Premiumization across alcohol categories is driving sales, as many consumers gravitate toward specialty cocktails, signature drinks, restaurant brand beer/wine/spirits, and ultra-premium spirits. Millennials are a key demographic for restaurants as they tend to dine out frequently and desire a quality dining experience.

As the economy continues to slowly improve, consumers are not only dining out more frequently, they are also looking for more exclusive and unique alcoholic drinks. Specialty cocktails; signature drinks; restaurant brand beer, wine, and spirits; locally produced craft and artisanal brands; and super-premium spirits reflect an overall trade-up trend occurring across most all alcohol categories, especially in fine dining but also increasingly in casual and even fast casual settings. This evolution is likely the best strategy for restaurant operators to combat the high probability that consumers will drink at home rather than at a restaurant. Drink promotions such as happy hours and weekday drink specials are also key methods for encouraging customers to order alcohol with their meals, as close to half of consumers say drink prices are a barrier to ordering.

 

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Data sources
          • Sales data
            • Consumer survey data
              • Mintel Menu Insights
                • Abbreviations and terms
                  • Abbreviations
                  • Executive Summary

                      • Moderate growth forecast
                        • Figure 1: Total US sales and fan chart forecast of on-premise alcohol, at current prices, 2009-19
                      • The consumer
                        • More likelihood to drink at home than at restaurants
                          • Figure 2: Where alcohol is purchased and/or consumed, February 2015
                        • Special occasions, gatherings, and drink specials motivate customers to order alcohol
                          • Figure 3: Drivers to order alcoholic beverages at restaurants, February 2015
                        • Price remains a barrier for 45% of consumers
                          • Figure 4: Barriers to order alcoholic beverages at restaurants, February 2015
                        • Food/drink pairings, microbrews, and drink specials are important
                          • Figure 5: Attitudes about alcoholic beverages at restaurants, February 2015
                        • What we think
                        • Issues and Insights

                            • How can restaurants draw Millennials?
                              • The issues
                                • Insight: Focus on variety, flavor, and value
                                  • How should restaurants appeal to at-home drinkers?
                                    • The issues
                                      • Insight: Exclusive selections
                                        • Can LSRs compete with FSRs for share of alcohol spending?
                                          • The issues
                                            • Insight: More alcohol offerings, better selling programs
                                            • Market Size and Forecast

                                              • Key points
                                                • Sales and forecast of on-premise alcohol
                                                  • Figure 6: Total US retail sales and forecast of on-premise alcohol, at current prices, 2009-19
                                                  • Figure 7: Total US retail sales and forecast of on-premise alcohol, at inflation-adjusted prices, 2009-19
                                                • Fan chart forecast
                                                  • Figure 8: Total US sales and fan chart forecast of on-premise alcohol, at current prices, 2009-19
                                                • Fan chart methodology
                                                • Market Drivers

                                                  • Key points
                                                    • Slowly rising disposable income drives on-premise sales
                                                      • Figure 9: Real disposable personal income, January 2007-January 2015
                                                      • Figure 10: US unemployment rate and underemployment, January 2007-December 2014
                                                    • Median household income stagnates
                                                      • Figure 11: Median household income, in inflation-adjusted dollars, 2003-13
                                                    • Consumer confidence fluctuates
                                                      • Figure 12: Consumer Confidence Index, January 2009-February 2015
                                                    • Millennials most apt to drink alcohol at restaurants
                                                      • Figure 13: Median household income, by age of householder, 2013
                                                  • Competitive Context

                                                    • At-home alcohol drinking more popular than drinking at restaurants
                                                      • Figure 14: Alcohol at home and away from home, 2008-13
                                                    • Consumers more apt to drink alcohol at FSRs than LSRs
                                                    • Menu Analysis

                                                      • Key points
                                                        • Menu incidence of beer overtakes cocktails
                                                            • Figure 15: Types of alcoholic beverages on the menu, by menu incidence, PCYA Q4 2011-14
                                                            • Figure 16: Top 10 alcoholic beverages, by menu incidence, PCYA Q4 2011-14
                                                          • Fast casuals find opportunity in menuing alcohol
                                                              • Figure 17: Alcoholic beverages, by menu incidence, by restaurant type, PCYA Q4 2011-14
                                                            • Handcrafted options help create a quality drinking experience
                                                                • Figure 18: Top 10 alcoholic beverage claims, by menu incidence, PCYA Q4 2011-14
                                                              • Sugar, mixes/juices mentions mostly down
                                                                  • Figure 19: Top 10 ingredients used in alcoholic drinks, PCYA Q4 2011-14
                                                              • The Consumer – Overview

                                                                • Key points
                                                                  • Three in 10 consumers report high weekly alcohol consumption
                                                                      • Figure 20: Average weekly consumption of alcohol by high, medium, or low, February 2015
                                                                      • Figure 21: Where alcohol is purchased and/or consumed, by average weekly consumption of alcohol (by high, medium, or low), February 2015
                                                                      • Figure 22: Average weekly consumption of alcohol by high, medium, or low, by top five desires on alcoholic drink menus – Any Rank, February 2015
                                                                      • Figure 23: Average weekly consumption of alcohol by high, medium, or low, by top five desires on alcoholic drink menus – Any Rank, February 2015 (continued)
                                                                      • Figure 24: Average weekly consumption of alcohol by high, medium, or low, by top five desires on alcoholic drink menus, by barriers to order alcoholic beverages at restaurants, February 2015
                                                                    • Drinking at home means less opportunity for restaurants
                                                                        • Figure 25: Where alcohol is purchased and/or consumed, February 2015
                                                                        • Figure 26: Where alcohol is purchased and/or consumed, February 2015
                                                                        • Figure 27: Where alcohol is purchased and/or consumed, February 2015 (continued)
                                                                        • Figure 28: Average (mean) spend on alcohol (percentage of total check), February 2015
                                                                      • Special occasions drive purchase; happy hours likely to attract guests
                                                                          • Figure 29: Drivers to order alcoholic beverages at restaurants, February 2015
                                                                        • Price is the primary barrier to ordering alcohol
                                                                            • Figure 30: Barriers to order alcoholic beverages at restaurants, February 2015
                                                                          • Guests look for locally made, wider flight varieties, food pairings
                                                                              • Figure 31: Top five desires on alcoholic drink menus (top five rank), February 2015
                                                                            • Consumers are looking for unique dining experiences
                                                                                • Figure 32: Attitudes about alcoholic beverages at restaurants, February 2015
                                                                            • The Consumer – By Gender

                                                                              • Key points
                                                                                • Men more apt than women to be high weekly drinkers, especially beer/wine
                                                                                  • Figure 33: Average weekly consumption of alcohol by high, medium, or low, by gender, February 2015
                                                                                  • Figure 34: Where alcohol is purchased and/or consumed, by gender, February 2015
                                                                                  • Figure 35: Where alcohol is purchased and/or consumed, by gender, February 2015 (continued)
                                                                                • Men more driven by favorite brands, craft beers; women likely to order at special occasions
                                                                                    • Figure 36: Drivers to order alcoholic beverages at restaurants, by gender, February 2015
                                                                                    • Figure 37: Drivers to order alcoholic beverages at restaurants, by gender, February 2015 (continued)
                                                                                  • Men want to see wider variety; women desire lower ABV, specialty drinks
                                                                                    • Figure 38: Top five desires on alcoholic drink menus – Top five rank, by gender, February 2015
                                                                                • The Consumer – By Generations

                                                                                  • Key points
                                                                                    • Millennials most apt to be high weekly drinkers
                                                                                        • Figure 39: Average weekly consumption of alcohol by high, medium, or low, by generations, February 2015
                                                                                        • Figure 40: Where alcohol is purchased and/or consumed, by generations, February 2015
                                                                                        • Figure 41: Where alcohol is purchased and/or consumed, by generations, February 2015 (continued)
                                                                                      • Millennials will spend more on alcohol than other generations
                                                                                        • Figure 42: Average (mean) spend on alcohol, by generations, February 2015
                                                                                      • Drink specials, restaurant brand alcohol appeals to Millennials
                                                                                          • Figure 43: Drivers to order alcoholic beverages at restaurants, by generations, February 2015
                                                                                          • Figure 44: Drivers to order alcoholic beverages at restaurants, by generations, February 2015 (continued)
                                                                                        • Unique offerings most desired by Millennials
                                                                                          • Figure 45: Top five desires on alcoholic drink menus – Top five rank, by generations, February 2015
                                                                                          • Figure 46: Top five desires on alcoholic drink menus – Top five rank, by generations, February 2015 (continued)
                                                                                        • Millennials very invested in alcohol at restaurants
                                                                                            • Figure 47: Attitudes toward on-premise alcohol, by generations, February 2015
                                                                                            • Figure 48: Attitudes toward on-premise alcohol, by generations, February 2015 (continued)
                                                                                        • The Consumer – By Household Income

                                                                                          • Key points
                                                                                            • High weekly alcohol consumption increases with household income
                                                                                                • Figure 49: Average weekly consumption of alcohol by high, medium, or low, by household income, February 2015
                                                                                                • Figure 50: Where alcohol is purchased and/or consumed, by household income, February 2015
                                                                                                • Figure 51: Where alcohol is purchased and/or consumed, by household income, February 2015 (continued)
                                                                                            • The Consumer – By Presence of Children in Household

                                                                                              • Key points
                                                                                                • Presence of children often means high alcohol consumption
                                                                                                    • Figure 52: Average weekly consumption of alcohol by high, medium, or low, by presence of children in household, February 2015
                                                                                                    • Figure 53: Where alcohol is purchased and/or consumed, by presence of children in household, February 2015
                                                                                                    • Figure 54: Where alcohol is purchased and/or consumed, by presence of children in household, February 2015 (continued)
                                                                                                  • Households with children spend more on alcohol when dining out
                                                                                                    • Figure 55: Average (mean) spend on alcohol, by presence of children in household, February 2015
                                                                                                  • Households without children more apt to drink at restaurants for special occasions
                                                                                                      • Figure 56: Drivers to order alcoholic beverages at restaurants, by presence of children in household, February 2015
                                                                                                      • Figure 57: Drivers to order alcoholic beverages at restaurants, by presence of children in household, February 2015 (continued)
                                                                                                    • Parents likely to limit drinking when dining out with kids
                                                                                                        • Figure 58: Barriers to order alcoholic beverages at restaurants, by presence of children in household, February 2015
                                                                                                      • Low ABV a potential selling point for parents
                                                                                                        • Figure 59: Top five desires on alcoholic drink menus – Top five rank, by presence of children in household, February 2015
                                                                                                        • Figure 60: Top five desires on alcoholic drink menus – Top five rank, by presence of children in household, February 2015 (continued)
                                                                                                      • Parents tend to drink when dining out with friends more than with family
                                                                                                          • Figure 61: Attitudes toward on-premise alcohol, by presence of children in household, February 2015
                                                                                                          • Figure 62: Attitudes toward on-premise alcohol, by presence of children in household, February 2015 (continued)
                                                                                                      • The Consumer – Race/Hispanic Origin

                                                                                                        • Key points
                                                                                                          • Hispanics drink more at restaurants than non-Hispanics
                                                                                                              • Figure 63: Average weekly consumption of alcohol by high, medium, or low, by race/Hispanic origin, February 2015
                                                                                                              • Figure 64: Where alcohol is purchased and/or consumed, by race/Hispanic origin, February 2015
                                                                                                              • Figure 65: Where alcohol is purchased and/or consumed, by race/Hispanic origin, February 2015 (continued)
                                                                                                            • Late night drink specials, restaurant brand alcohol drive sales to Hispanics
                                                                                                                • Figure 66: Drivers to order alcoholic beverages at restaurants, by race/Hispanic origin, February 2015
                                                                                                              • Unique brands and styles appeal to Hispanic drinkers
                                                                                                                  • Figure 67: Top five desires on alcoholic drink menus – Top five rank, by race/Hispanic origin, February 2015
                                                                                                                  • Figure 68: Top five desires on alcoholic drink menus – Top five rank, by race/Hispanic origin, February 2015 (continued)
                                                                                                                • Value offerings likely to attract Hispanics
                                                                                                                    • Figure 69: Attitudes toward on-premise alcohol, by race/Hispanic origin, February 2015
                                                                                                                    • Figure 70: Attitudes toward on-premise alcohol, by race/Hispanic origin, February 2015 (continued)
                                                                                                                • Appendix – Trade Associations

                                                                                                                    • Council for Responsible Nutrition
                                                                                                                      • Food Marketing Institute (FMI)
                                                                                                                        • International Food Information Council (IFIC)
                                                                                                                          • International Food Service Executives Association (IFSEA)
                                                                                                                            • International Foodservice Distributors Association (IFDA)
                                                                                                                              • International Foodservice Manufacturers Association (IFMA)
                                                                                                                                • International Franchise Association (IFA)
                                                                                                                                  • National Council of Chain Restaurants (NCCR)
                                                                                                                                    • National Restaurant Association (NRA)

                                                                                                                                    Companies Covered

                                                                                                                                    To learn more about the companies covered in this report please contact us.

                                                                                                                                    On-premise Alcohol Trends - US - May 2015

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