While more consumers are opting to consume alcoholic beverages at home rather than in restaurants and bars, at-home/off-premise sales saw just a slight uptick in 2009, even as on-premise sales dipped by nearly 5%, according to a new at-home consumption report from Mintel.
Among alcohol drinkers, 90% consume alcoholic beverages at home, compared to 77% who report drinking outside the home, Mintel's consumer research shows. Furthermore, the number of drinks consumed at home in an average month is 10, versus just 5.7 consumed on-premise at bars/restaurants.
However, while at-home sales have grown by 21% since 2004, that growth has been tapering off. Last year, sales rose just 1.2%, to reach over $79.5 billion. Meanwhile, on-premise sales declined by 4.6%, to $49.5 billion.
The leveling off of at-home growth reflects both lower overall consumption and trading down to less expensive brands, the research shows. About half of those who drink at home report they are drinking less than they did a year ago, and 28% report having traded down.
Although the at-home market "is still enjoying viability," in a price-sensitive environment, "consumers may shy away from discretionary expenses like alcohol, to save a few bucks," sums up Mintel senior analyst Garima Goel-Lal.
For 2010, Mintel projects that an improving economy will help generate a modest growth rebound of just over 3% for at-home sales, reports Mintel director of research Joan Holleran.
While beer has the largest share of at-home market sales (48%), wine is the most popular alcoholic beverage consumed off-premise. More than two-thirds (67%) of those who drink at home report drinking wine, compared to 57% who drink spirits and 53% who drink beer.
Wine's popularity has been enhanced by innovations in packaging and introductions of "unpretentious labels" and paired wine/food offerings, all designed to attract the "lucrative" younger adult market, points out Goel-Lai.
More than two in five respondents who drink at home (43%) consider themselves to be very knowledgeable about alcoholic beverages. More than a third (35%) say that they get their information about alcoholic beverages from magazines or television, 31% cite the Internet as their primary information source, and more than half report that they are influenced by promotions and price discounts.
As for on-premise consumption, there is little mystery to the continuing decline. While the National Restaurant Association's ongoing performance tracking showed signs of improvement early in 2010, restaurant operators reported declines in same-store sales and traffic in both April and May.
"Obviously, if consumers are not eating out as much, on-premise alcohol consumption is going to reflect that," notes Holleran, adding that consumers have also become more cautious about drinking out-of-home.