New research from NiQ indicates that beer consumption is back on the rise in Australia, both at home and in venues – trumping spirits.
Recent consumer trends have been impacted by the pandemic, cost-of-living pressures as well as a desire to moderate consumption and a focus on more sustainable products. These factors have all combined to influence consumer behaviour in terms of managing expenses, becoming more home-centric and thinking more about where and when to go out.
NIQ’s ‘Full View of Liquor’, which combines the NIQ Omnishopper panel with CGA’s OPM (On-Premise Measurement) & OPUS (On-Premise User Study) has revealed some interesting trends given the shifts in the current economic landscape.
According to the CGA’s Pulse+ report 39 per cent of consumers claim they are going out less than usual. As expected, this penetration and frequency reductions bring challenges for on-premise liquor performance, leading to a contraction of -7.7 per cent in total spirits volumes, in contrast to beer’s 1.4 per cent volume growth compared to the previous year. NiQ says this suggests “that spirits are more impacted by factors such as price increases and perceived value for money”.
NiQ added: “The data indicates consumers are replacing out-of-home occasions with drinking at home, with off-premise unit sales stable, but value growing compared to the previous year.
“Although ‘units per occasion’ has dropped by -3.3 per cent, there’s an uptick in both buyers (+2.1 per cent) and occasions per buyer (+1.7 per cent). This suggests people might be shifting some occasions to at-home consumption, but also purchasing smaller pack sizes more frequently, indicating a move towards occasion-based buying rather than stocking up.
“Beer is the primary beneficiary of value-driven consumer mindsets, facing double-digit dollar value growth through increased buyers and occasions per buyer, enjoying growth in consumption at home and on-premise.”
The NiQ data also looks at which groups are going out more, who’s staying at home more and how moderation manifests itself in drinking habits.
Although there are widely reported cost-of-living challenges, not all consumers are reducing their on-premise visits equally. Young consumers (18-34 years old) are visiting pubs, bars and restaurants more often than before, but on the other hand, older consumers (35-54) – more likely to be paying mortgages and raising children – are the ones usually going out less often.
Consumers in the 55-plus age group show the strongest increase in liquor retail sales growth (34.1 per cent value growth compared to the previous year), while under 35s show the biggest reduction in retail spending on total liquor (-8.0 per cent).
NiQ reports: “Declines for under 35s are driven by decreases in buyers and occasions per buyer, potentially as people counteract the effects of the cost-of-living crisis by stopping their at-home drinking or reducing occasions to prioritise experiences and consumption in the On-Premise. In addition to that, this could also reflect moderation trends manifesting as abstinence among these consumers.”
Marco Silva, Customer Success Director, NIQ said: “Diving a bit deeper, we can see that demographic differences play a key role in on-premise consumer occasions and categories, and helps to understand why young consumers are still going out. Gen Z (40 per cent share of all occasions) and Millennials (41 per cent) prioritise these experiential occasions more than Gen X (36 per cent) and Boomers (32 per cent).
“In line with their quest for experiences, we also note the high proportion of these younger consumers who prefer different drinks at bars/restaurants compared to home. This suggests that on-premise consumption/visitation plays a more unique and differentiated role in their lives than it does for older consumers, making it less replicable at home and could be one of the reasons why many young consumers are either going out as much as before or even more often despite the higher cost-of-living.”