Understanding Alcoholic Drinking Occasions: The Off-Trade

Understanding Alcoholic Drinking Occasions: The Off-Trade

Introduction

The alcoholic drinks industry is facing challenges in generating value in its on-trade operations. This is against the backdrop of an off-trade market that continues to account for the majority of alcohol sales and occasions. This report analyses how industry players can tap into the market by building an understanding of the diversity of at-home consumption occasions and the trends fuelling them

Scope

*Detailed quantitative analysis of off-trade alcohol consumption indicators including occasions by type, market value and volume data.

*Qualitative examination of the 'who, where and why' of off-trade alcoholic drinks consumption, tracking the shift to frequent but moderate occasions.

*Detailed action points offering practical strategies based on the trends and insights analyzed in the report.

*Covers France, Germany, Italy, Netherlands, Spain, Sweden, UK, US, Australia, New Zealand, Japan, South Korea, China, India, Brazil and Russia

Highlights

Consumers are questioning their need for indulgences during a downturn and are thus more likely to search for value for money. They may remain committed to their preferred brands (consumers' brand loyalty is strong) but are more likely to try and seek better deals. This behavior clearly favors off-trade sales.

Datamonitor's 2008 survey suggests that consumer behaviors are contradictory, as they are showing heightened awareness of price and sensitivity to the cost of alcohol both on and off-trade, but there is an attitude-behavior gap, with financial concerns not necessarily translating into trading down or significant reduction of alcohol consumption.

When drinking in the off-trade, consumers will often have greater choice and freedom than they would on-trade. This offers particular opportunities to players with considerable product portfolios or even more a limited on-trade presence key will be delivering marketing messages that draw attention to such products' off-trade availability.

Reasons to Purchase

*Understand the key issues affecting the market for alcoholic beverages off-trade.

*Access detailed quantitative and insightful qualitative data aggregating the most compelling and recent research in this timely and important topic.

*Strategic conclusions and actionable recommendations on harnessing the positive opportunities that exist within a difficult marketplace.

Overview 1
Catalyst 1
Summary 1
TABLE OF CONTENTS 2
Table of tables 3
TABLE OF figures 4
The Future Decoded 5
Introduction 5
TREND: Hostile economic conditions are favoring off-trade alcohol consumption 5
Consumers' spending behavior is being pressured by negative economic trends 5
The need to cut back on spending has contributed to the ongoing prevalence for "front-loading" 7
Further legislation prohibiting alcohol marketing is a possibility 8
Key take-outs and implications: the off-trade holds advantages over the on-trade in terms of the 'credit crunch' 9
TREND: Off-trade alcohol sales continue to overshadow the on-trade 10
The UK and US lead the growth in off-trade drinking occasions 10
The off-trade accounts for a growing share of total sales volumes 11
Consumers typically drink more when consuming alcoholic beverages in the off-trade 12
UK consumers lead in alcohol consumption per occasion on-trade, but growth is much stronger off-trade 13
Key take-outs and implications: despite on-trade occasions growth and increased diversity, off-trade sales dominate all major markets 15
TREND: Growing diversity in at-home drinking occasions is fuelling consumers' drift to the off-trade 16
Consumers are increasingly choosing to stay in 16
Consumers are finding time for socializing with friends and family 17
US consumers' favorite activities for summer evenings center around the home and emphasize value 17
Pricing is not the only factor when considering drinking on- or off-trade 19
Consumers are matching alcohol to a wider variety of at-home occasions 23
The association of alcohol with food continues to grow but still has untapped potential 26
Key take-outs and implications: success in a difficult market will be governed by responding to consumers' range of off-trade needs 28
INSIGHT: Gender considerations play a distinct role in the opportunities within the off-trade sector 29
Men are driving much of the growth seen in off-trade consumption and occasions 31
Men will typically drink more per off-trade occasion 35
Both men and women are increasing the time they spend socializing with friends and family 36
Key take-outs and implications: gender cues can be a powerful aids in targeted marketing but should not replace inclusive views of the marketplace 37
INSIGHT: Health considerations will continue to impact alcoholic drinks preferences 38
Moderate consumption of alcohol is often linked with a positive impact on health 38
Health and premiumization foster "less but better" approaches to alcohol consumption 39
There are mixed attitudes among consumers towards moderation of alcohol consumption in the off-trade 40
Key take-outs and implications: health is one of many considerations for consumers when purchasing alcoholic drinks 40
Action Points 42
ACTION: Assist consumers in replicating on-trade experiences at home 42
Social occasions offer opportunities to emulate on-trade experiences and encourage experimentation 42
Facilitate social occasions with products that enable sharing behaviors 44
ACTION: Promote the premium and healthy credentials of alcoholic beverages 44
Recognize that light beers are well placed to capitalize on the wellness trend 46
ACTION: Target front-loading occasions with a responsible approach 46
ACTION: Avoid the discount trap but provide price advantages that appeal during a downturn 47
Protect against undermining brand equity through contradictory off-trade and on-trade brand positioning 47
ACTION: Ensure that marketing spend is maintained during times of recession 48
Use Datamonitor's strategic reports outlining the key innovation opportunities that arise from consumer mega-trends 48
APPENDIX 49
Definitions 49
Methodology 50
Further reading 51
Ask the analyst 51
Datamonitor consulting 51
Disclaimer 51
List of Tables
Table 1: Standard drink driving limits across Europe, US and Australia 9
Table 2: Overall off-trade alcoholic drinking occasions, (millions), US, Europe and Australia, 2002-2012 11
Table 3: Proportion of volume of alcoholic beverages consumed by channel, US, Europe and Australia, 2002-2012 12
Table 4: Total volumes consumed in the off-trade, millions of liters, US, Europe and Australia, 2002-2012 14
Table 5: Alcoholic beverages consumption (liters) per occasion, on and off-trade, US, Europe and Australia, 2002-2012 15
Table 6: SURVEY: Degree of attention given to expenditure on alcohol (% of consumers), Europe, Americas, Asia, 2008 20
Table 7: SURVEY: Propensity to choose alcoholic drinks based on value or cost in the last six months, (% of consumers) Europe, Americas, Asia, 2008 22
Table 8: SURVEY: Propensity for choosing higher quality alcoholic drinks for at-home consumption (% of consumers), Europe, Americas and Asia, 2008 23
Table 9: Annual at-home alcoholic beverage occasions (millions), US, Europe and Australia, by type, 2002-2012 25
Table 10: The proportion of off-trade alcoholic drinking occasions, US, Europe and Australia, 2002-2012 26
Table 11: SURVEY: Propensity for choosing alcohol based on how well it goes with food (% of consumers), Europe, Americas, and Asia, 2008 28
Table 12: SURVEY: Frequency of consuming alcoholic drinks at home/someone else's home in the last month, by gender, Europe, Americas, Asia, 2008 30
Table 13: Off-trade alcoholic beverage sales, (millions of liters), by gender, US, Europe and Australia, 2002-2012 32
Table 14: Off-trade alcoholic beverage sales, (% share), by gender, US, Europe and Australia, 2002-2012 33
Table 15: Off-trade alcoholic drinking occasions ( millions), by gender, US, Europe and Australia, 2002-2012 34
Table 16: Off-trade alcoholic drinking occasions (% share), by gender, US, Europe and Australia, 2002-2012 35
Table 17: Volume consumed per off-trade alcoholic drinking occasion, liters, US, Europe and Australia, 2002-2012 36
Table 18: Time spent daily socializing with friends and family, (minutes), by gender, Europe, US and Australia, 2002-2012 37
List of Figures
Figure 1: The decline in UK consumer confidence, Nationwide Building Society's Confidence Barometer April 2008 6
Figure 2: The average on-trade price of a pint of lager in 2008, US, Europe and Australia, US$ 7
Figure 3: The most popular summer evening activities named by US consumers in 2007 show an emphasis on the home and value 19
Figure 4: The percentage of consumers who advised that they had chosen alcoholic drinks with health considerations in mind either 'more' or 'significantly more' in the past six months (2008) 39
Figure 5: The % of consumers who had moderated their alcohol consumption either 'more' or 'significantly more' in the past six months (2008) 40
Figure 6: Case Study: The Carlsberg Draughtmaster system claims to be able to provide draught style beer at home 43
Figure 7: Packaging innovations can be used to market better quality drinks in the off-trade 44
Figure 8: Carling has successfully promoted its C2 brand on the strengths of its taste 45
Figure 9: Case Study: The early success of Heineken Premium Light Lager Beer highlights consumer preference for 'better-for-me' beers that taste good and have strong branding 46
Figure 10: Anheuser Busch introduces Tilt, an alcoholic drink said to give an energy boost before a night out 47