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On-premise Alcohol Trends - US - May 2016

"Sales of alcohol at bars, restaurants, and other establishments continue to grow as consumers feel relatively positive about the US economy. The alcohol industry is continually adapting to new consumer preferences including the movement toward craft beer, lower alcohol drinks, and cocktails made with the freshest ingredients. Bars/restaurants can potentially increase alcohol sales by understanding what consumers order which beverages, what motivates consumers to try a drink, and what flavors consumers find appealing."
- Caleb Bryant, Foodservice Analyst

This report discusses the following key topics:

  • Sales of on-premise alcohol are experiencing steady growth
  • Gen Xers and Boomers are infrequent on-premise drinkers 
  • Drink type loyalists won’t branch out
  • There is a disconnect between what consumers want and what is trendy

This Report covers consumer attitudes and trends relating to all alcoholic beverages consumed at any on-premise location (eg, bars, restaurants, nightclubs, sport arenas, etc).

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • The issues
          • Sales of on-premise alcohol are experiencing steady growth
            • Figure 1: Total US sales and fan chart forecast of on-premise alcohol, at current prices, 2010-20
          • Gen Xers and Boomers are infrequent on-premise drinkers
            • Figure 2: On-premise alcohol consumption frequency, at least weekly, by generation, February 2016
          • Drink type loyalists won’t branch out
            • Figure 3: AFH new drink trial motivators, by number of different types of alcoholic beverages consumed AFH, February 2016
          • There is a disconnect between what consumers want and what is trendy
            • Figure 4: Appealing alcoholic beverage descriptors, any rank, February 2016
          • The opportunities
            • Consumers want drinks that complement their meals
              • Figure 5: AFH alcoholic beverage statement agreement, any agree, February 2016
            • Millennials drink often and order a variety of drinks
              • Figure 6: Repertoire analysis of beverages consumed, typically consume 3+ different beverage types AFH, by select demographics, February 2016
            • IPAs, liquors, and dessert wines are making their marks on menus
              • Figure 7: Growth of select alcoholic beverages on menus, Q4 2012-Q4 2015
            • What it means
            • The Market – What You Need to Know

              • On-premise alcohol sales grow steadily
                • A positive economy leads to bar sales
                  • Craft beer is here to stay
                  • Market Size and Forecast

                    • Sales of on-premise alcohol continue to grow; will soon pass $100 billion annually
                      • Figure 8: Total US sales and fan chart forecast of market, at current prices, 2010-20
                      • Figure 9: Total US sales and forecast of on-premise alcohol, at current prices, 2010-20
                      • Figure 10: Total US sales and forecast of on-premise alcohol, at inflation-adjusted prices, 2010-20
                  • Market Factors

                    • Americans are cautiously optimistic about the economy
                      • Figure 11: Unemployment and underemployment, January 2007-March 2016
                      • Figure 12: Consumer Sentiment Index, January 2007-March 2016
                    • Number of breweries at all-time high. Craft distilleries also on the rise.
                      • Millennials are key consumers, but the money is with the older generation
                        • Figure 13: Population by generation, 2011-21
                        • Figure 14: Median household income, by age of householder, 2014
                    • Key Players – What You Need to Know

                      • Restaurants are upgrading their alcohol programs
                        • New bars are making drinking a full experience
                          • Mixers and light beer are struggling to keep up with trends
                            • Trends are shaping bars/restaurants
                            • What’s Working?

                              • Restaurant bars get a makeover
                                • FSR chains become beer-centric
                                  • All fresh everything
                                    • Make your mark on social media
                                      • Figure 15: Mentions of spirits and drinking at bar/restaurant, April 2013-16
                                  • What’s Struggling?

                                    • Light beer struggles with its identity
                                      • Premade alcohol mixers face an image problem
                                      • The New Bars

                                          • An emerging segment offers opportunity for all alcohol brands
                                            • Barcades
                                              • Taprooms/distilleries
                                                • Tiki bars
                                                • What’s Next?

                                                  • Foodservice trend: New bar stars
                                                    • Bar tech
                                                      • Nitro beer
                                                        • Figure 16: Nitro beers released in 2016
                                                      • Low alcohol cocktails
                                                        • Hard soda
                                                          • Figure 17: Hard soda examples from GNPD
                                                        • Nice ice
                                                          • Will fermented tea be the next trendy ingredient?
                                                            • Great opportunity exists for flavored beer
                                                              • Figure 18: Beer launches by flavor, 2010 and 2015
                                                              • Figure 19: Examples of flavored beer launched in 2016
                                                          • MMI Analysis

                                                            • On-premise alcohol growth
                                                              • Figure 20: Growth of alcohol at restaurants, Q4 2012-Q4 2015
                                                            • Beer: IPAs drive overall growth
                                                              • Figure 21: Top 10 beers at restaurants, Q4 2012-Q4 2015
                                                            • Wine
                                                              • Figure 22: All wine at restaurants and % growth, Q4 2012-Q4 2015
                                                            • Red wine
                                                              • Figure 23: Top 10 red wines at restaurants, Q4 2012-Q4 2015
                                                            • White wine
                                                              • Figure 24: Top menued white wines at restaurants, Q4 2012-Q4 2015
                                                            • Dessert/fortified, sparkling, and non-grape wine
                                                              • Liquor and cocktails
                                                                • Figure 25: Top menued liquors at restaurants, Q4 2012-Q4 2015
                                                              • Whiskey
                                                                • Tequila
                                                                  • Rum
                                                                    • Gin
                                                                      • Cocktail menus get more specialized
                                                                        • Figure 26: Top 10 cocktails at restaurants, Q4 2012-Q4 2015
                                                                      • Cocktail ingredients
                                                                          • Figure 27: Beer/cider cocktails at restaurants, Q4 2015
                                                                        • The bitter truth about liqueurs
                                                                          • Figure 28: Elderflower-flavored alcoholic beverages released in 2016
                                                                      • The Consumer – What You Need to Know

                                                                        • Millennials are key consumers
                                                                          • Consumers are most interested in familiar drink flavors
                                                                            • Word-of-mouth is a powerful motivator
                                                                              • Not all drinkers are the same
                                                                              • Away from Home Alcohol Consumption

                                                                                • On-premise alcohol consumption frequency varies by demographics
                                                                                    • Figure 29: On-premise alcohol consumption frequency, February 2016
                                                                                    • Figure 30: On-premise alcohol consumption frequency, at least weekly, by select demographics, February 2016
                                                                                  • Consumers plan on spending more at bars in 2016
                                                                                    • Figure 31: Perceived change in spend on alcoholic drinks (out of home), January 2013-16.
                                                                                • Alcohol Consumed On-premise

                                                                                  • Beer is the most consumed alcoholic drink on-premise
                                                                                    • Figure 32: Alcoholic beverages typically consumed AFH, February 2016
                                                                                  • Millennials, Hispanics, urbanites, and the affluent drink a variety of alcoholic beverages AFH
                                                                                    • Figure 33: Repertoire of beverages consumed, February 2016
                                                                                    • Figure 34: Repertoire of beverages consumed, typically consume 3+ different beverage types AFH, by select demographics, February 2016
                                                                                  • Drink preferences of the “drink loyalist”
                                                                                    • Figure 35: Alcoholic beverages typically consumed AFH, by consumers who typically drink one type of alcoholic beverage AFH, February 2016
                                                                                • Drinker Profiles

                                                                                  • Beverage drinker indexes
                                                                                    • Beer/cider drinkers
                                                                                      • Beer drinkers vary dramatically by beer of choice
                                                                                        • Figure 36: Drinker indexes: Any beer, non-craft domestic, imported, craft, and hard cider drinkers, February 2016
                                                                                      • Wine and champagne/sparkling wine drinkers
                                                                                        • Age differences exist among wine versus champagne drinkers
                                                                                          • Figure 37: Drinker indexes: Any wine, wine (excluding sparkling), and sparkling wine drinkers, February 2016
                                                                                        • Cocktail and spirit drinkers
                                                                                          • Marketing to the neat/on the rocks drinker
                                                                                            • Figure 38: Drinker indexes: Spirit neat/on the rocks, spirit with mixer, shot drinkers, February 2016
                                                                                          • Not all cocktail drinkers are the same
                                                                                              • Figure 39: Drinker indexes: Any cocktail, tropical cocktail, classic cocktail, craft cocktail, after dinner drinkers, February 2016
                                                                                          • Drink Trial Motivators

                                                                                            • Specials, word-of-mouth, and a clear menu motivate trial
                                                                                              • Figure 40: AFH new drink trial motivators, February 2016
                                                                                            • In their own words: Motivators for trying new drinks
                                                                                              • Women value recommendations. Men are brand loyal.
                                                                                                • Figure 41: AFH new drink trial motivators, by genders, February 2016
                                                                                              • Drink type loyalists are elusive consumers
                                                                                                • Figure 42: AFH new drink trial motivators, by number of different types of alcoholic beverages consumed AFH, February 2016
                                                                                            • Alcoholic Beverage Flavor Interest

                                                                                              • Consumers respond to familiar flavor profiles
                                                                                                • Figure 43: Appealing alcoholic beverage descriptors, any rank, February 2016
                                                                                              • Men and women have vastly different flavor preferences
                                                                                                • Figure 44: Appealing alcoholic beverage descriptors, any rank, by gender, February 2016
                                                                                              • Gen Xers and Boomers crave a “smooth” drinking experience
                                                                                                • Figure 45: Appealing alcoholic beverage descriptors, any rank, by gender, February 2016
                                                                                            • Alcohol Attitudes and Perceptions

                                                                                              • Food/drink pairings and other areas of opportunity
                                                                                                • Figure 46: AFH alcoholic beverage statement agreement, any agree, February 2016
                                                                                                • Figure 47: AFH alcoholic beverage statement agreement, “I like to experiment by trying new alcoholic drinks away from home,” any agree, by generation, February 2016
                                                                                              • On-premise alcohol brand attitudes
                                                                                                • In their own words: Branded spirits in cocktails
                                                                                                  • Perception of craft alcohol
                                                                                                    • Figure 48: AFH alcoholic beverage statement agreement, “‘Craft’ alcohol brands are higher quality than big brands,” any agree, by generation, February 2016
                                                                                                  • In their own words: Craft alcohol brands
                                                                                                    • Consumers typically stick to one type of drink when they go out
                                                                                                      • Alcohol brand matters more to men
                                                                                                        • Figure 49: AFH alcoholic beverage statement agreement, any agree, by gender, February 2016
                                                                                                      • Urbanites are adventuresome drinkers
                                                                                                        • Figure 50: AFH alcoholic beverage statement agreement, any agree, by area, February 2016
                                                                                                      • Craft beer drinkers care more about the pour
                                                                                                        • Figure 51: AFH alcoholic beverage statement agreement, “Draft beer tastes better than bottled or canned beer,” any agree, by beer drinkers, February 2016
                                                                                                    • CHAID Analysis – Ultra-premium Spirit Drinkers

                                                                                                      • Methodology
                                                                                                        • Millennial neat/on the rocks drinkers value ultra-premium spirits
                                                                                                          • Figure 52: AFH alcoholic beverage statement agreement, CHAID – Tree, February 2016
                                                                                                      • Qualitative Analysis – Drink Frustrations

                                                                                                        • Panelists cite drink price as a major frustration
                                                                                                        • Appendix – Data Sources and Abbreviations

                                                                                                          • Data sources
                                                                                                            • Fan chart forecast
                                                                                                              • Consumer survey data
                                                                                                                • Consumer qualitative research
                                                                                                                  • Mintel Menu Insights
                                                                                                                    • Social media methodology
                                                                                                                      • Abbreviations and terms
                                                                                                                        • Abbreviations
                                                                                                                          • Terms
                                                                                                                          • Appendix – Market

                                                                                                                              • Figure 53: Total US sales and forecast of on-premise alcohol, at current prices, 2010-20
                                                                                                                              • Figure 54: Total US sales and forecast of on-premise alcohol, at inflation-adjusted prices, 2010-20
                                                                                                                          • Appendix – Consumer

                                                                                                                            • CHAID Analysis
                                                                                                                              • Figure 55: Attitudes toward drinks – CHAID – Table output, February 2016

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                                                                                                                          On-premise Alcohol Trends - US - May 2016

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