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US On-premise Alcohol Trends market report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the On-Premise Alcohol Trends market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry and how fast are its rates of growth? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Definition

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). While retail alcohol data is cited in this Report, retail alcohol (ie alcohol purchased from a grocery store, mass merchandiser, liquor store, etc) is not a focus of this Report. For more information on alcohol from a retail perspective, please look to Mintel’s Drink Report library.

This Report builds upon the previous year’s Report (see OnPremise Alcohol Trends – US, September 2017).

For the purposes of this Report, the market size covers all sales of alcohol intended to be consumed on premise, regardless of location. In addition to restaurants, it covers sales through bars/ pubs, clubs, and other entertainment venues, concessions, etc.

Consumption data is provided by Mintel Market Sizes. For information on Mintel Market Sizes methodology please see Appendix – Data Sources and Abbreviations.

Expert analysis from a specialist in the field

Written by Caleb Bryant, a leading analyst in the Foodservice sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Sales of alcohol on-premise are rising year-over-year thanks to consumers’ interest in premium alcoholic beverages. While the market is growing, competition among bars/restaurants has never been stronger. Foodservice establishments must contend with consumers’ preference for drinking at home and must prepare for the next generation of on-premise consumers. Establishments that focus on providing a unique drinking experience will stand out in the crowded market. Caleb Bryant
Senior Foodservice Analyst

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • The issues
          • On-premise alcohol consumption falls
            • Figure 1: Changes in AFH drinking, by select demographics, January 2018
          • Consumers prefer drinking at home
            • Figure 2: AFH drinking attitudes, January 2018
          • Younger consumers enjoy the personal, controlled experience of drinking at home
            • Figure 3: Reasons for drinking AH instead of AFH, by generation, January 2018
          • The opportunities
            • Exploration is driving increased consumption among some consumers
              • Figure 4: Reasons for drinking AFH more often, January 2018
            • Consumers choose new drinks based on alcohol type and flavor
              • Figure 5: AFH new drink trial motivators, January 2018
            • Young consumers are interested in new drinks and exciting flavors
              • Figure 6: AFH drink interest, by generation, January 2018
            • What it means
            • The Market – What You Need to Know

              • iGens: pragmatic, activists, and in control
                • Premium drinks offset falling volume
                  • Consumers are price sensitive despite strong economy
                  • Market Size and Forecast

                    • Projected YOY on-premise sales growth
                      • Figure 7: Total US sales and fan chart of on-premise alcohol sales, at current prices, 2012-22
                      • Figure 8: Total US sales and forecast of on-premise alcohol sales, at current prices, 2012-22
                  • Market Breakdown

                    • Consumers are drinking less on-premise
                      • Figure 9: Total on-premise alcohol consumption, liters per capita, 2010-20
                    • Beer sales grow but segments struggle with different issues
                      • Figure 10: Total US sales and fan chart forecast of beer, at current prices, 2012-22
                    • Producers rise a glass to wine’s strong growth
                      • Figure 11: Total US on and off-premise sales and fan chart forecast of wine, at current prices, 2011-21
                    • Vodka maintains its top status, but whiskey is growing fast
                      • Figure 12: Distribution of spirit sales by volume, by segment, 2017 (estimate)
                      • Figure 13: Distribution of spirit sales by volume, by segment, 2017 (estimate)
                    • White spirits
                      • Figure 14: US volume sales and forecast of white spirits, by segment, 2012-22
                    • Dark spirits
                      • Figure 15: US volume sales of dark spirits, by segment 2012-22
                      • Figure 16: US volume sales of whiskey/whisky, by type, 2012-17
                    • RTD market benefits from innovation
                      • Figure 17: US volume sales of flavored malt beverages, spirit-based prepared cocktails, and wine coolers, 2012-22
                  • Market Factors

                    • Many Americans are financially unstable despite strong economy
                      • Figure 18: Financial stability and flexibility, by status level, November 2017
                    • Will self-driving cars be the biggest boon to the on-premise market?
                      • Alcohol avoiding/substitution topics are trending on social media
                        • Figure 19: Social media mentions of “Whole 30,” 2013-17
                        • Figure 20: Social media mentions of “Dry January,” 2013-18
                        • Figure 21: Social media mentions of “mocktails,” 2013-17
                    • Market Factor Deep Dive: iGens

                      • The kids are alright: meet the sober generation
                          • Figure 22: Distribution of population aged 21+, 2018-23
                      • Key Players – What You Need to Know

                        • It’s all about the experience
                          • Beer market slows down and cider takes a dip
                            • Take on-premise off-premise via delivery
                            • What’s Working?

                              • Pop culture pubs
                                • Alco-tourism appeals to the experiential drinker
                                  • Growth in ride-sharing sharing services benefits bars/restaurants
                                    • Figure 23: Mobility services used, April 2016-November 2017
                                  • Blurred beverages expose consumers to new categories
                                  • What’s Struggling?

                                    • Major casual dining chains face declining sales
                                      • Figure 24: Changes in casual dining chain visitation, by select demos, November 2017
                                      • Figure 25: Applebee’s email, “The DOLLARMAMA is still just…well, a dollar,” February 16, 2018
                                      • Figure 26: Applebee’s email, “ABSOLUT Vodka + Lemonade = $2,” March 3, 2018
                                    • Mass market beer is in trouble…and craft beer hits a rough patch
                                      • Figure 27: Total US volume sales of beer, by segment, 2012-20
                                    • Cider can’t sustain its growth
                                      • Figure 28: US volume sales of hard cider, 2012-16 (est)
                                    • “Fewer but better trend” is detrimental for value spirit brands
                                      • Figure 29: Percent change in 9-liter cases sold, 2012-17
                                  • What’s Next?

                                    • Bringing the bar to you
                                        • Figure 30: TGI Friday’s alcohol delivery
                                      • Unfiltered and funky, natural wine enters the spotlight
                                        • Something’s in the water
                                          • Figure 31: Cocktails with waters as an ingredient
                                        • Zero waste hits mainstream
                                          • Drink locally, think globally
                                            • Figure 32: Internationally influenced cocktail examples
                                        • Mintel Menu Insights Analysis

                                          • Wine
                                            • Figure 33: Change in incidence of wine types, Q4 2015-Q4 2017
                                          • Sparkling wine
                                            • Figure 34: Change in incidence of sparkling wines, Q4 2015-Q4 2017
                                          • Red wine
                                            • Figure 35: Change in incidence of top 15 red wines, Q4 2015-Q4 2017
                                          • White wine
                                            • Figure 36: Change in incidence of top 15 white wines, Q4 2015 – Q4 2017
                                          • Dessert/fortified wine
                                            • Figure 37: Change in incidence of top 10 dessert/fortified wines, Q4 2015-Q4 2017
                                          • Beer
                                            • Figure 38: Average number of beers menued by restaurant segment, Q4 2015-Q4 2017
                                            • Figure 39: Average price of beer menued by restaurant segment, Q4 2015-Q4 2017
                                            • Figure 40: Growth of non-fruit beer flavors, Q4 2015-Q4 2017
                                          • Cocktails
                                            • Cocktail alcohol types
                                              • Figure 41: Change in incidence of alcohol types used in cocktails, Q4 2015-Q4 2017
                                            • Cocktail spirit trends
                                              • Figure 42: Change in incidence of spirits used in cocktails, Q4 2015-Q4 2017
                                              • Figure 43: Distribution of spirits used in cocktails, Q4 2015-Q4 2017
                                              • Figure 44: Change in incidence of spirit brands used in cocktails, top 25 brands Q4 2015-Q4 2017
                                            • Cocktail ingredient claims
                                              • Cocktail ingredient trends: non-alcoholic beverages
                                                • Figure 45: Change in incidence of non-alcoholic beverages used in cocktails, Q4 2015-Q4 2017
                                              • Cocktail ingredient trends: herbs/seasonings
                                                • Figure 46: Change in incidence of herbs and seasonings used in cocktails, Q4 2015-Q4 2017
                                                • Figure 47: Unique salts used in cocktails
                                            • The Consumer – What You Need to Know

                                              • Reported alcohol consumption across venues is down
                                                • New drinks can spur consumption
                                                  • Consumers of all ages prefer drinking AH
                                                    • Drinking AH is relaxing, cheap, and more personal than drinking AFH
                                                    • Alcoholic Beverage Consumption and Occasions: AH vs AFH

                                                      • Most drinks are consumed AH
                                                        • Figure 48: Alcoholic beverage consumption, AH vs AFH, January 2018
                                                      • Alcoholic beverage consumption by demographics
                                                        • Most occasions also occur within the home
                                                          • Figure 49: Drinking occasions, AH vs AFH, January 2018
                                                      • AFH Drink Interest

                                                          • Figure 50: AFH drink interest, January 2018
                                                          • Figure 51: AFH drink interest, by Millennial groups, January 2018
                                                          • Figure 52: Two Hats Online Ad, “’Meh’ No More”
                                                        • TURF analysis: AFH drink interest
                                                          • Figure 53: TURF analysis AFH drink interest, January 2018
                                                        • Unique drinks attract multicultural consumers
                                                          • Figure 54: AFH drink interest, by race/ethnicity, January 2018
                                                        • Targeting drink-type consumers
                                                          • Figure 55: AFH drink interest, top 5 drinks, by drink-type drinkers, indexed against all consumers, January 2017
                                                          • Figure 56: AFH drink interest, top 5 drinks by drink-type drinkers, indexed against all consumers, January 2017
                                                      • Changes in AFH Drinking

                                                        • Slight net decrease in AFH drinking
                                                          • Figure 57: Changes in AFH drinking, January 2018
                                                          • Figure 58: Changes in AFH drinking, by select demographics, January 2018
                                                        • FMB drinkers report greatest increase in consumption
                                                          • Figure 59: Changes in AFH drinking, by drink-type drinkers, January 2018
                                                      • Reasons for Drinking AFH More

                                                        • Variety drives increased consumption
                                                          • Figure 60: Reasons for drinking AFH more often, January 2018
                                                      • Reasons for Drinking AFH Less

                                                        • Consumers are reducing their alcohol consumption or drinking AH
                                                          • Figure 61: Reasons for drinking AFH less often, January 2018
                                                      • Changes in Venue Visitation

                                                        • Traditional bars see greatest visitation drop
                                                          • Figure 62: Changes in venue visitation, January 2018
                                                          • Figure 63: Changes in venue visitation, rebased among visitors, January 2018
                                                        • Venue switching deep dive: nightclubs and casual dining chains
                                                          • Figure 64: Nightclub consumers: venue switching behaviors, rebased among visitors, January 2018
                                                          • Figure 65: Casual dining chain consumers: venue switching behaviors, rebased among visitors, January 2018
                                                        • Visitation changes dependent on income
                                                          • Figure 66: Changes in venue visitation, rebased among visitors, by age and HH income, January 2018
                                                      • New Drink Trial Motivators

                                                        • Consumers most open to drink types they already enjoy
                                                          • Figure 67: AFH new drink trial motivators, January 2018
                                                          • Figure 68: AFH new drink trial motivators, by area, any rank, January 2018
                                                        • Men are brand-conscious purchasers
                                                          • Figure 69: AFH new drink trial motivators, by gender and age, any rank, January 2018
                                                        • Drink-type consumers respond to different motivators
                                                          • Figure 70: AFH new drink trial motivators, by beer-type drinkers, any rank, January 2018
                                                        • Drink specials motivate those drinking AFH less
                                                          • Figure 71: AFH new drink trial motivators, by changes in AFH alcohol consumption, any rank, January 2018
                                                      • AFH Drinking Attitudes

                                                        • Majority of consumers prefer drinking at home
                                                          • Figure 72: AFH drinking attitudes, January 2018
                                                          • Figure 73: AFH drinking attitudes, by changes in AFH alcohol consumption, January 2018
                                                        • Delivery appeals to the “hometainment” generation
                                                          • Figure 74: AFH drinking attitudes, by age, January 2018
                                                          • Figure 75: AFH drinking attitudes, by age and gender, January 2018
                                                        • Multicultural consumers often try before they buy
                                                          • Figure 76: AFH drinking attitudes, by race/ethnicity, January 2018
                                                        • Opportunity for FMB brands on-premise
                                                          • Figure 77: AFH drinking attitudes, I try new drinks at bars before buying from stores, by drink-type drinkers, January 2018
                                                      • Reasons for Drinking AH

                                                        • Home comforts and cheap drinks drive AH alcohol consumption
                                                          • Figure 78: Reasons for drinking AH instead of AFH, by those who prefer drinking AH, January 2018
                                                        • Young consumers want control, can’t be bothered to go out
                                                            • Figure 79: Reasons for drinking AH instead of AFH, by generation, January 2018
                                                          • Bars/restaurants losing price-conscious consumers
                                                            • Figure 80: Reasons for drinking AH instead of AFH, by changes in AFH alcohol consumption, January 2018
                                                        • Appendix – Data Sources and Abbreviations

                                                          • Data sources
                                                            • Sales data
                                                              • Fan chart forecast
                                                                • Consumer survey data
                                                                  • Consumer qualitative research
                                                                    • Consumption data: Mintel Market Sizes
                                                                      • Purchase Intelligence
                                                                        • Mintel Menu Insights
                                                                          • ePerformance
                                                                            • Social media methodology
                                                                              • Abbreviations and terms
                                                                                • Abbreviations
                                                                                  • Terms
                                                                                  • Appendix – The Market

                                                                                      • Figure 81: Total US sales and forecast of on-premise alcohol, at inflation-adjusted prices, 2012-22
                                                                                  • Appendix – The Consumer

                                                                                    • TURF methodology