As we head into the summer months, here’s a look at what’s happening in the on-premise industry.
Summer Drinking Trends
Union’s OnPrem Insights recently took a look at last year’s summer data to make some predictions about the 2023 summer season. What they found is that operators should prepare for a surge of traffic at the end of the season. In fact, Union found that last year Labor Day was the busiest of all summer holidays for its on-premise venues. In fact, it was the busiest day (by sales) since St. Patrick’s Day for the on-premise channel.
Union also says operators should expect more late night traffic in the summer as the days are longer and nighttime events, like firework displays, draw people out.
“The summer is a huge opportunity for bars and restaurants, but it is important to understand the ebbs and flows in traffic,” said Gary Ross, Union’s chief growth officer. “The data within our report provides operators with unique seasonal insights that helps them optimize their offerings and operations during a period when demand can be unpredictable.”
As for what people are drinking, spirits are the strongest summer drinking category at Union venues (63%) followed by beer/RTDs (31%), and wine (5%).
Cocktails
Speaking of spirits, CGA powered Nielsen IQ finds that cocktails continue to flourish in the U.S. on-premise, boosting average earnings in Q1 2023 vs Q4 2022 by +3% to $11,700. This uplift can be attributed to a promising increase in both traffic (+4%) and check value (+$0.50).
CGA also reported that the ever-dominant margarita continues to reign as the country’s top cocktail. The Moscow Mule recently reclaimed the #2 spot in the Top 10 Cocktails in the latest quarter, moving the martini back into third place.
The slip of martinis to third hasn’t stopped the growth of the espresso martini, however, which has nearly doubled in velocity over the past year. With a quarterly growth of +11%, the espresso martini has overtaken the Long Island Iced Tea to become the sixth most popular cocktail. At Union establishments, the espresso martini ranks even higher at number four.
The CGA Cocktail Tracker recorded the biggest jump from the spritz cocktail, which moved up four places to the 11th most popular cocktail type, with a +36% increase in velocity.
Union found similar results from the data at its on-premise venues while adding that another tequila cocktail, the Paloma, is popular (6th on its list), and flavors like lemon, espresso, and lime come out on top at its venues.
Ready-to-Drink
RTD offerings continue to dominate in the off-premise, especially in the summer, as customers seek convenience and portability, but how are these products faring in the on-premise? Union’s OnPrem Insights recently released a study focused on the sales of RTDs in its on-premise accounts, where RTDs are available at nearly three out of four venues and represent about 1.3 percent of alcohol sales by dollar share.
The results show that just a handful of RTD brands still dominate bar and restaurant sales: White Claw (67% share of malt-based RTDs) and High Noon (82% of spirit-based RTDs).
“RTD alcohol is a rapidly expanding category even though it represents a small percentage of sales in the on-premise channel. At this point, there’s clear-cut brand domination, with White Claw and High Noon far ahead of the pack at Union venues,” says Lance Obermeryer, PhD, Union’s Chief Scientist. “There are likely a variety of reasons for this, from consumer brand loyalty to operators’ desire to maintain a focused inventory. With brand names dominating RTD sales, bars and restaurants should apply this insight to optimize their menu offerings.”
When it comes to varieties, Union’s study found that the top five flavors are: Black Cherry, Lime, Mango, Pineapple, and Berry.
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