How can pubs adapt to the evolving on-premise landscape?

The on-premise landscape continues to evolve at a rapid pace, and one thing is clear, pubs that want to stay ahead of shifting consumer preferences must adapt.

Last week, Tom Graham, senior client success manager at NIQ, hosted CGA by NIQ’s ‘Does it pass the pub test?’ webinar. Graham uncovered the latest trends in the pub landscape and changing consumer behaviours, but he also highlighted the versatility of pubs and the industry’s ability to cater to a diverse range of consumers and occasions.

Graham was joined by Ryan Kimball, ALH Group’s beverage category manager, who provided insights into the latest consumer and category trends from one of Australia’s largest pub groups.

Kimball explained how ALH maintains the sense of familiarity that pubgoers seek while keeping a pulse on emerging trends.

“We’ve spent a lot of time understanding the unique characteristics of our pubs and segmenting them. Through that segmentation we shape everything from the local menus to pricing to how we work our pubs into the renewals and renovations program,” he stated.

“Typically, the pub veers towards familiarity, instead of experimenting. [Consumers] tend to stick to what they know and love, so when we’re putting in the range for these pubs, our focus is on products and brands that guests are familiar with, and brands that they really trust.

“Because of where we’re positioned, we have a pretty long horizon on viewing trends, so we can see trends that are coming more in different channels, but see that they’re up and coming in a pub or on the edge of breaking into the mainstream. That balance is key to making sure that our venues have that familiar product offer, but also that fresh and trendy offer as well,” Kimball continued.

Experiential pub visits

Experience-led on-premise visits have gained significant traction in recent years. The 2024 On Premise User Study (OPUS) Australia found that 39 per cent of on-premise visits were focused around events and special occasions, a four per cent increase on the year prior – and this is at the expense of drink-led (32 per cent) and food-led (29 per cent, down four per cent) occasions.

Within these occasions, live music and live sports were key drivers of event-led on-premise visits, each making up five per cent of overall on-premise visitation. Themed events and ticketed events made up four and three per cent of visits respectively.

Adapting to increased appetite for experiential pub visits, Graham and Kimball highlighted the opportunity for drinks suppliers to collaborate with pubs for activations and sponsored events.

_{“Sports are obviously super important and a great occasion that happens [pretty regularly]. We’ve worked with suppliers to bring together beverage offers, merch giveaways and a whole host of other different ways we can add value to sports taking place at the pub, as opposed to on somebody’s couch as they scroll through highlights on their phone.”}

Ryan Kimball

While drink-led occasions only accounted for 32 per cent of on-premise visits, quiet and relaxed drinks made up 10 per cent of overall visits, followed by after work drinks at seven per cent – both being occasions that pubs cater to particularly well.

Similarly, casual meals were the leading reason for food-led visits, making up 11 per cent of overall on-premise visits.

Understanding the path to purchase

The versatile nature of pubs means that the core drinking occasions vary dramatically across each category, with beer more centered around sports viewing and drink-led pub visits, while wine is better to suited to food-led occasions.

Beyond category-led occasions, it’s also important to consider which venue features patrons are using to decide their drinks. Graham says the menu reigns supreme across all drink category consumers, with category dynamics then influencing the specific touchpoints.

For example, pub beer drinkers are influenced by tap handles at the bar or typically stick with the same drink choice, while RTD drinkers are likely to refer to a specials board or browse the fridge, and spirit and cocktail drinkers are most likely to ask the bartender.

“For me, it’s not about tailoring individual paths to purchase or mechanisms to certain guest cohorts or category drinkers, it’s about using this kind of information to ensure that every element – whether it’s back bars, digital, or specials boards – ultimately come together to deliver consistent and coherent messaging,” Kimball stated.

Digital menus remain a nice-to-have as opposed to a must-have, with 13 per cent of consumers in October 2024 using this method – a five per cent year-on-year increase – while 57 per cent still choose to order at the bar. As expected, the demographic of patrons that choose to use digital ordering mechanisms skews towards Gen Z and Millennial.  

Draught beverages beyond beer

As consumer tastes continue to evolve, beer alternatives have gained a greater share of the tap bank. In the pub, data shows that consumers typically expect 63 per cent of the tap bank to be made up of beer, 27 per cent beer alternatives and 10 per cent cider.  

“There is definitely demand for more non-beer options on tap,” says Kimball. “But it’s also really focused on specific and popular choices. For us, it’s quite helpful to think beyond the broad non-beer tap label, because we’re seeing two pretty distinct trends on tap.

“The first is your convenience driven taps, and these are things like classic spirit mixers and prebatched cocktails, that have been put on the tap for faster and more convenient service. Then you have brand-driven taps that are established brands that gain a lot of popularity and warrant a tap.”

As the lines between beverage categories blur, Kimball says the key is to offer a diverse range of drinks across categories and provide a variety of delivery mechanisms in the most efficient and appealing way, encompassing draught products, packaged and freshly made drinks.