Research from drinks market analysts IWSR indicates consumers are showing a clear preference for home consumption versus visiting the on-trade which, the company says, points to behaviours learned during the Covid-19 pandemic becoming entrenched.

IWSR tracks 15 of the world’s leading markets, including Australia, and says that in markets across Europe and North America, on-premise withdrawal is being used as an economising measure in the cost of living crisis, while in many countries across Asia attitudes are more positive, and the on-trade is recovering more strongly.

Although many bars and restaurants around the world bounced back in 2022 following the lockdown-induced lows of 2021, most markets have yet to see their on-premise share of overall alcohol consumption reach pre-pandemic levels, according to IWSR data.

In terms of total beverage alcohol (TBA) the on-premise accounted for 35 per cent in 2019, which understandably fell in 2020, to 23 per cent. The recovery saw on-premise account for 28 per cent TBA in 2021 and 29 per cent in 2022.

“The trend around going out is polarised across key markets, with consumers in most regions recalling net withdrawal from the on-trade,” says Richard Halstead, COO Consumer Insights, IWSR. “Asia is the only region showing net positive sentiment towards going out.

“Home-premise consumption is being used as an economising tool in many markets to allow consumers to maintain relationships with premium brands. But this is not the case in Asia, where the on-premise revival remains in full swing.”

According to IWSR consumer research conducted in April 2023, on average, around 60 per cent of consumers in North America, parts of Europe, South Africa, and Australia say they are going out less. Meanwhile in China and India, around 50 per cent say they are going out more.

Asked for their preferred drinking venue, consumers in all regions expressed a net preference for at-home; again, this was strongest in Australia/South Africa, and weakest in Asia.

IWSR said that attitudes to the on-premise versus at-home are driven by a number of factors, such as the macroeconomic climate and cultural attitudes towards socialising.

The cost of living increases being felt across the world are more hits the on-premise did not need as it continues to pull itself out of the problems caused by the pandemic, with reduced disposable income prompting consumers to go out less.

Halstead said: “High costs – of energy, staff, food and drink – are making life very hard for the on-premise in many countries now. There are expected to be further closures in 2023 as a result.”

In many markets, the willingness to go out is stronger amongst LDA Gen Z, however, the overall consumer mood across most markets, especially those outside of Asia, is still pessimistic towards the on-trade.

The other factors hampering the on-premise include the LDA Gen Z cohort being the age segment that is also most likely to say that they are under financial pressure, and that the group also has higher moderation/abstention rates than older age groups, both for economic and health reasons. These factors, according to IWSR, will inevitably impact their spend level in the on-trade and their frequency rates.

Andy Young

Andy joined Intermedia as Editor of The Shout in 2015, writing news on a daily basis and also writing features for National Liquor News. Now Managing Editor of both The Shout and Bars and Clubs.

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  1. Great article! It’s encouraging to see that home consumption is preferred by consumers, indicating the positive effects of behaviors learned during the pandemic. The on-trade industry’s ability to recover in Asia is particularly impressive. Well done for providing insightful data and analysis!

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