Why consumer appetite for premiumisation lives on in the on-premise - Consumer Intel

Two in three consumers globally favour high-quality drinks over cheaper alternatives, with 55% willing to pay extra for more premium beverages
Consumption times are shifting – 19% of consumers head to the on-premise earlier in the day than they did in 2024, with nearly one in four premium drinkers going out earlier
Whiskey/whisky, gin and cocktails offer strong trade-up opportunities in several Asian markets, but which on-premise channels – wet-led or food-led – consumers prefer for high-end drinking experiences differ from country to country

Inflation has led some consumers to cut back on spending, but the demand for indulgent drinking experiences remains strong.

The world may be facing challenging times, with geopolitical tensions and rising inflation across numerous markets, yet the demand for premium experiences remains strong.

Two in three global consumers favour high-quality drinks over cheaper alternatives, according to CGA by NIQ’s latest ‘Global Reach’ consumer survey. Even more notably: 55% are willing to pay extra for a better-quality drink.

Financial pressures are certainly narrowing the trade-up opportunity, but premiumisation remains a priority for many.

In exploring the combinations of ‘quality over quantity’ consumers prioritise in their drink purchases, it turns out that most favour either “a single super-premium drink” or “two high-quality drinks” rather than a higher quantity of lower-quality options.

It must be noted that while the preference for a single super-premium drink has remained steady at 21% over the past year (indicating that those who can afford it continue to prioritise quality), the appeal of “two high-quality drinks” has declined slightly. This shift has favoured options that include more average or lower-end serves, suggesting that the average consumer is becoming more cautious with their spending.

Indeed, the share of consumers willing to pay extra for better-quality drinks dropped from 63% in 2022 to 55% last year, impacting sales volumes. In the UK, for instance, premium and super-premium spirits saw significant declines in 2024, with volumes down 13.2% and 14.9%, respectively, compared with the previous year.

A closer look at demographic data, however, reveals ongoing opportunities in the premium segment. Millennials, in particular, have increased their trade-up to super-premium options. Brands can attract these consumers in various ways, such as offering appealing spirits-and-mixer serves, leveraging visual triggers or celebrity endorsements.

Europe bucks the trend

Regional data highlight opportunities for premiumisation too. In Europe, for instance, drinkers are bucking the global trend. While premium beverage consumers seem to be declining worldwide, they have risen by a notable 3 percentage points (pp) in Europe since 2022, now reaching 14% of all on-premise users.

Businesses must closely track their habits if they want to offer them the right products at the right time and place.

CGA by NIQ research indicates that globally, drinkers are gradually starting their nights out earlier than they used to. When asked whether the time of the day they go out to drink has changed compared with last year, 19% of consumers reported going out earlier, while just 9% are going out later.

This shift is even more pronounced among premium consumers, with nearly one in four now going out earlier. This should be carefully considered, as changes in the timing of on-premise visits may influence how people perceive these occasions.

This isn’t necessarily a challenge to overcome, but rather an opportunity to introduce innovative products tailored to different time slots or to develop new ways for consumers to enjoy existing brands.

Businesses can also focus on the factors that influence premium drinkers’ brand or product choices. For example, one in three trust recommendations from friends and family, indicating that this segment values social connections and sharing experiences.

A comparable percentage of premium drinkers, meanwhile, pay attention to menus, meaning they are keen to be personally involved in the decision-making process.

Servers as brand ambassadors

A further crucial element is that one in four premium drinkers seek recommendations from bartenders: they trust drinks professionals and interact with them as a central part of their going-out experience.

CGA by NIQ research shows that around four in five bartenders regularly make drink recommendations to guests: businesses must recognise the key role of servers and view them as true ambassadors for their brands.

The key is to get bartenders genuinely excited about the brand – when bartenders are passionate about a product, they are more likely to promote it enthusiastically to guests, creating an authentic connection and enhancing the overall consumer experience.

Waiting staff know they must prioritise guest preferences when suggesting drinks, but CGA by NIQ research indicates that they want to promote brands they personally enjoy – 42% proactively recommend their own favourite brands, while 39% focus on high quality as a key criterion when making recommendations to guests.

Targeting Asian markets

With gradual societal shifts worldwide and a more challenging trade landscape in the West, Asian markets are becoming increasingly attractive to drinks brands, especially premium ones. When targeting these countries, drinks companies should carefully assess which on-premise channels consumers prefer for high-end drinking experiences.

In Singapore, for example, the strongest demand for premium-plus drinking is in wet-led venues, yet suppliers must also establish a strong presence in food-led venues, perhaps by developing a ‘with-food’ consumption strategy to fit with the occasion.

In Malaysia, premium drinking dominates in wet-led venues, while late-night bars and nightclubs are the preferred premium venues in Japan. In Indonesia, a well-established higher-end consumer base spans all on-premise channels, presenting an opportunity for premium brands to drive higher-value sales across various venue types.

Targeting the right venues alone, however, is not enough to win over those consumers who are looking to trade up. This data must be cross-referenced with category specific insights to identify and offer the drinks with the strongest appeal to premium drinkers.

The whiskey/whisky opportunity

Beer is by far the most popular alcoholic beverage among the average consumer in Japan, but when it comes to premium experiences, sparkling wine and whiskey/whisky are the key categories that brands, operators and suppliers should focus on.

In fact, whiskey/whisky consumers are more likely to prioritise quality over quantity and are willing to spend more for it. Around 55% of whiskey/whisky drinkers would prefer one luxury drink or two high-quality premium drinks over any other option if given the choice.

In Thailand, whiskey/whisky is not only the most popular spirit overall, but it also holds a prominent position in premium spaces, especially in high-end bars. With 91% of Thai drinkers likely or very likely to pay extra for a better-quality drink, the potential for growth in this market is clear.

Thailand has long been an attractive market for the beverage alcohol industry, and with recent reports suggesting the country may soon relax some regulations on alcohol sales and advertising, the opportunities for higher-end brands look even more promising.

Similarly, in Malaysia, whiskey/whisky is the most consumed spirits category, chosen by 38% of on-premise users. Once again, these consumers are likely to trade up, with 59% willing to spend more for a higher-quality drink.

Gin leads trade-ups

Ove in unaged spirits, gin is the most promising category for brands, suppliers and operators looking to tap into the Malaysian market. It might well be only the fifth most popular spirit, but over half of the country’s gin drinkers are inclined to trade up. Also, the consumers are more loyal than whiskey/whisky lovers, making the opportunity in this category particularly compelling.

The juniper-based spirit is even more popular in Singapore, where 37% of gin drinkers are eager to trade up, and in Indonesia, where consumers enjoy the spirit across various channels and occasions.

These people are seeking unique and exclusive drinks, so fostering innovation – whether through serve presentations, experiences or other brand associations – is key to driving premiumisation.

Cocktail drinkers opt for luxury

Focusing on cocktails can be a winning strategy in Indonesia too, especially if businesses personalise the experience for drinkers through the likes of customised garnishes, unique glassware or other elements that enhance the visual appeal and elevate the overall drinking experience.

In Thailand, an impressive 30% of consumers choose cocktails, and among them, 70% consume cocktails nearly every time they go out. What’s more, the vast majority of these (74%) already opt for luxury or premium serves, which presents a substantial opportunity for high-end brands.

The situation is similar in Malaysia, where there is a strong demand for premium-plus cocktails, which brands, suppliers and operators can capitalise on by offering innovative and appealing high-quality serves.

In Asia, as in Europe, there are plenty of consumers still eager to trade up. Alcohol companies need to assess who these on-premise users are, the channels they favour and frequent, the reasons behind their trade-up choices, and the categories they are most likely to invest in, to tailor their strategies and maximise profits from the ongoing premiumisation trend.

The Research

CGA by NIQ’s ‘Opus’ and ‘Reach’ surveys offer a comprehensive suite of tools for on-premise businesses to make informed decisions and drive success. The former provides insights into category, channel, occasion and brand questions, aiding in sales and marketing strategy optimisation in various markets. ‘Reach’, meanwhile, illuminates eating and drinking behaviours, offering valuable in-market insights and benchmarking for targeted consumer outreach.

To learn more about CGA’s capabilities across the global on-premise, click here, or email Jonny Jones, MD international markets.