This article was initially published in the February issue of Global Drinks Intel magazine. For details on how to subscribe, click here.
Once the cornerstone of the weekend and late-night rituals, it is dwindling; a far cry from the ‘revenge partying’ that saw late-night bars and nightclubs full to bursting from dusk till dawn during the heady – and hedonistic – days of the post-Covid aftermath.
Since the start of the pandemic, the UK has lost more than 30% of its nightclubs while those that have survived saw sales shrink by nearly 30% in 2023. Similarly, there are now 10% fewer independent bars than there were in 2020, reflecting a shift in consumer behaviour and an evolution of occasions, especially those traditionally associated with higher consumption.
Such huge changes pose risks to the beverage alcohol industry, especially to the spirits category. A heartland of independent bars and nightclubs has yielded a significant proportion of spirits sales over the past few decades, and the category’s consumption is intrinsically linked with the lively celebration, the after-work drinks that ‘move on somewhere else’ or the forbidden ‘final’ drink that we all know we shouldn’t have, but have it anyway.
That’s not to say, of course, that the nightclub is dead or that the late-night bar is no longer. There will always be an appetite for excess, an appetite for late-night adventure and a desire to dance. However, the pertinent questions – and the ones that venue owners are increasingly trying to answer – is: Can the on-premise channel still cater for these needs effectively, and does it offer experiences that provide sufficient value to entice consumers to return?
At CGA, we’ve seen fairly substantial sales declines in some spirits categories in the on-premise across many international markets, and subsequently commissioned our own report, ‘The Evolving High Tempo Occasion’, to understand if a shifting outlet universe and occasion profile were behind some of those declines.
The results are fascinating.
Our research found that high-tempo drinking occasions are diversifying. While a ‘big night out’ and a ‘bar crawl’ still top the list of occasions for high-energy consumption, there’s a far broader range of occasions, times of day and, by extension, types of venue in which they occur.
The ‘bottomless brunch’, for example, has shifted high-consumption occasions from nightclubs into brunch restaurants and from spirits into prosecco, while ‘competitive socialising’ (think interactive darts, ping pong or shuffleboard) has turned what were the lair of late-night into the more beer-friendly late-afternoon.
Even the increasingly popular large-scale ticketed events, such as Manchester’s Warehouse Project (a series of seasonal club nights) or the recently-opened Drumsheds in London (described as a ‘dedicated culture space’ in a disused industrial warehouse), have made late-night clubbing less of a weekly vice and more of a once-every-few-months pre-planned blowout.
What do these increasingly popular sub-occasions have in common? They’re all centred around experience, offer the consumer something different and, interestingly, come at a price premium.
Another enlightening finding from the report was the profiling of the most frequent visitor of high-tempo occasions. This is a demographic that, as would be expected, is younger (two-thirds are under 34) and spend more time in the on-premise than average. However, they’re also far more likely than average to be city centre-based. A sizable 43% live in city centres, compared with just 17% of less-frequent visitors to high-tempo occasions. While this potentially means less money spent on taxis home and more money spent in on-premise venues, it also poses a threat.
With the rise in city-centre living among younger consumers, there’s little stopping them from ditching on-premise venues altogether in favour of an after-party, especially with occasions starting earlier in the day.
Indeed, drinks sales in major cities are moving towards earlier time slots and trading is busiest during the late afternoon and early evening of a weekend. Indeed, even London’s National Theatre is moving shows to earlier in the day (The venue is piloting 6.30pm midweek performances to fit in with post-pandemic working patterns.)
For alcohol brand owners and on-premise operators alike, this evolution poses a serious challenge; one which if not accounted for could spiral. As consumption occasions have diversified, so, too, should serve strategy, portfolio, pricing and activation. Within the core occasion, working with operator partners to develop experience and value for experience to help resist temptation to carry on the party at home will also drive sales, not to mention brand equity.
There’s also the need, however, to evolve and build a broader occasion strategy, targeting the new wave of high-tempo consumption moments.
This article was initially published in the February issue of Global Drinks Intel magazine. For details on how to subscribe, click here.
