Spirits sales at restaurants and bars are mostly steady, with recent data from WSWA’s SipSource and NIQ’s CGA revealing more optimism for the year but still pointing to lower growth levels than in past years. In other happenings on-premise, March Madness was a slam dunk for bars and vodka may find more possibilities in fine dining.
On-Premise Bright Spot for Spirits in Q1, RTDs on The Rise
In both on-premise and off, overall 12-month spirits depletion trends ending in March were down -2.7%, and have dropped further to -5.2% over the last three months, according to a new report from WSWA’s SipSource.
But on-premise depletion trends were nearly flat in Q1, with spirits on-premise down only -0.1%.
A significant amount of growth on-premise is driven by premixed cocktails, which are up on-premise +24.6%, with all major channels showing significant increases.
While on-premise share of spirits depletions rebounded to pre-pandemic levels at the end of March, the latest data shows depletions down -8.0% for combined wine and spirits – marking a potential peak in depletions, according to the report.
The analysts faulted continued inflationary pressures and rising gas prices, as well as the gap between the cost of food and beverage at-home versus away from home impacting consumer spending. Trends for spirits will get better this year but not at the growth rates of 2022, they added.
Consumers Bounce Back for March Madness
Over a quarter of consumers enjoyed the March Madness festivities on-premise, jumping to over two-in-five (40%) among the 21-34 age demographic, according to NIQ’s CGA.
Consumption patterns show beer was the top choice for half of those visitors, with vodka and whiskey the preferred spirits among almost a quarter of fans. For suppliers to note for next year: three out of five consumers engaged with featured drink promotions, and two in five bought discounted offerings during the event.
Vodka Finds Share in Fine Dining
Despite a recent dip in sales, CGA also recently highlighted continued opportunities for spirit and beer brands in fine dining, a channel that held a 7.6% share of all spirits sales by value in the 12 months through February, 0.3% less than in the previous year.
With fewer fine dining outlets in the market, there may be heightened competition in this channel but spirit brands have shown positive trends. Vodka in particularly has made gains, increasing its share of fine dining spirits sales by +0.8 percentage points in the 12 months to February, thanks to the popularity of ultra and super-premium brands.
Vodka now attracts 29.2% of all spirits sales in the channel, making it the top shareholder. Whiskey, cordials and gin have all gained share in the last 12 months, but tequila and rum have lost 0.5 and 0.7 percentage points respectively.
The data agency recommended that suppliers “align the right brands to the right venues and craft compelling sales stories.”