Bourbon and Scotch to Drive 2015 On-​Premise Sales

Drink sales in bars and restaurants are projected to grow modestly in 2015, according to Technomic's expectations for the on-​premise alcohol industry. Conditions at major chain restaurants that serve alcohol are slowly improving, and greater consumer confidence will lead to a more positive trend than seen in 2014.

Technomic's forecasts – released via its now available BarTAB Report and its Adult Beverage Insights Group – call for consumer expenditures on alcohol away from home to rise 2.7 percent next year, a slightly greater increase than is expected for alcohol expenditures at retail.

"Conditions are improving, and with lower gas prices and better consumer confidence, we're continuing to see positive movement in consumer spending away from home," statesDavid Henkes, Vice President at Technomic and director of the firm's adult beverage practice. "However, there's still a lot of lost ground to make up relative to how the industry was performing prior to the recession."

In looking at specific adult beverage categories in on-​premise channels, Technomic finds the largest category – beer — challenged in terms of volume. BarTAB Report outlines sales growth of 2.3% for beer in 2015, lower than the projections for wine and spirits.

"Craft beer, cider and imports are generally doing well at the bar, but domestic beer, which accounts for nearly half of on-​premise beer sales, continues to lose share," observes Eric Schmidt, Director of Research at Technomic. Wine is expected to achieve the highest sales growth rate of the three adult beverage categories, with spirits a close second.

Technomic's positive projection also comes with a note of caution. Alcohol sales will still lag broader restaurant and bar sales, due to fairly flat volume. "Dollar growth is driven largely by price increases and gains in certain categories such as craft beer and whiskeys including bourbon, Irish and single malt Scotch," notes Henkes. "Bars and clubs, the segment that generates two-​fifths of alcohol sales, is expected to underperform many other industry segments, holding down overall growth expectations."

"We continue to stress to our clients the importance of a strong adult beverage program – it drives customer satisfaction, and it's obviously a source of incremental profitability," Henkes adds. "Many restaurant concepts that outperform the industry are emphasizing adult beverage, and we contend opportunities exist to leverage spirits, wine and beer to achieve greater traffic, sales and profits in 2015."

About 15% of U.S. adults drink a cocktail or liquor on a weekly basis. And, 12.4% of U.S. adults enjoy straight liquor at least once a week. Younger adults, those below age 45, make up 50% of this audience. These folks enjoy going out at a higher than average rate for special occasions according to AudienceSCAN. For example, 35% celebrate New Year's Eve at a commercial establishment. About 25% celebrate St. Patrick's Day at a restaurant or bar and 20% enjoy their Thanksgiving meal at a restaurant.

Marketers may want to connect with these folks through ads at movie theaters. 23% have taken action after seeing these ads in the past 30 days. In addition, about 41% of Cocktail/​Liquor Drinkers have taken action within 30 days after reading an ad in the newspaper — print, online or mobile.

AudienceSCAN data is available as part of a subscription to AdMall for Agencies. Media companies can access AudienceSCAN data through the Audience Intelligence Reports in AdMall.

Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.