The On Premise is witnessing a marked decrease in alcohol consumption across the globe. This shift is also evident in the UK, with a -23pp net decrease, resulting in a growing appetite for exciting soft drink options. CGA by NIQ’s leading OPUS data highlights the potential for drinks brands and venue operators to capitalise on this emerging trend, especially among the younger consumers at its forefront.
Among the legal drinking age (LDA) to 24-year-old demographic almost a third (30%) report drinking less than they did a year ago, with 13% completely abstaining from alcohol.
This demographic is also more health-conscious, with three quarters striving to lead a healthier lifestyle (74%) and actively seeking to make environmentally conscious choices (73%).
However, this reduction in alcohol intake has not negatively impacted younger consumers’ engagement with the On Premise sector. On the contrary, 86% of LDA- 24 year old consumers have visited the On Premise in the last 3 months, 60% going out weekly, (over-indexing by +17pp versus the average for all GB consumers).
These statistics accentuate a compelling opportunity for drink brands and venue operators to position themselves as the go-to choice by offering beverages aligning with these values to this health-conscious and environmentally aware generation. In doing so, they are well-placed to not only meet the demand for alcohol alternatives, but also build long-term loyalty among this highly engaged consumer demographic.
So, when and where do the gaps and opportunities exist to strategically target soft drinks sales?
Despite the growing preference for non-alcoholic drinks, the total soft drinks sales performance has remained flat. Although certain segments are showing promise, with a +8% year-on-year (YOY) value increase in bars and bar restaurants and a +2.7% YOY value growth in hotels.
This data indicates untapped potential for soft drinks during higher tempo occasions, especially among younger consumers who are increasingly adopting “zebra striping” – alternating between alcoholic and non-alcoholic drinks throughout the night. In fact, 18-24-year-olds are more likely to choose soft drinks in a bar or late-night setting, over-indexing by +6pp versus the average consumer.
Yet, breaking into this potentially lucrative market requires careful strategy. The most prominent factors driving brand choice include:
Habit – 43% soft drink consumers are creatures of habit, always choosing the same drink categories and/or brands.
Brand loyalty – 38% of consumers consistently choose their favourite brand.
Value for money – An equal % are motivated by value for money as brand loyalty, which does not necessarily mean the cheapest option.
Brand quality – A quarter (23%) prioritise brand quality.
Menu recommendations and onsite activations – Promotional activities are particularly effective among 18-24-year-olds, who have strong brand loyalty while also being more open to being influenced, (over-indexing by +9pp versus the average consumer).
In terms of consumer preferences within the category, the focus on fizz remains intact, holding half (49%) of the market share despite health trends bolstering the rate of sale (RoS) for sport drinks, water plus, and juice drinks. This effervescent outlook is driven by consumer desire for value for money and the increased consumption of fizzy drinks among 18-24-year-olds, with almost a third (30%) reporting they are drinking more carbonated soft drinks than a year ago.
CGA client director Violetta Njunina said: “These evolving consumer preferences in the GB On Premise present an exceptional window for soft drink suppliers and venue operators to flourish by supplying to changing demands. As moderation becomes a key trend, particularly among younger generations, the ability to offer appealing, high-quality, and health-conscious soft drinks is crucial for success. Suppliers who tap into these insights and align their strategies are better positioned to lead in this new era of beverage consumption.“
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