You’ve no doubt noticed it yourself, but the numbers are important: the corner saloons are dying out while restaurants are continuing to open at a steady pace.
Since 2004, the quintessential local bars' numbers have declined by 12,766 units, while full-service restaurants have added 60,906 locations. These statistics were presented by Nielsen CGA for the Brewers Association's latest online and interactive teleconference series, Power Hour.
Matthew Crompton, Nielsen CGA associate client director, and senior vice president Scott Elliott shared the latest on-premise data, which showed that as of December 2016, 58,678 neighborhood bars remained. Crompton calls this a "long-term decline of key drinking channels" for the beer industry.
This is bad news for the beer category, because 70% of consumers who recently visited a neighborhood bar drank beer, while just 52% of restaurant-goers did the same. The average drinking venue sells 91% more beer than the average restaurant. The shrinkage is particularly important for beer's largest segment, domestic premiums, said Elliott. When domestic premiums lose a drinking outlet and gain a distribution point in an eating outlet, they "typically lose over 60% of their volume," he said.
Imported beer loses nearly 30% of its volume as Mom-and-Pops lose units and traffic, Scott said. Craft, on the other hand, sells more in the average eating outlet than domestic premium or imports, but it's still losing about 15% in volume.
High-end beer volume performance grew by 2.3% during the 52-week period ending February 25. Meanwhile, non-high-end beer volumes declined 6.3%, driven by poor domestic premium sales. The largest brands were the hardest hit, with the top 10 brands declining 3.3%, and volume for the top 10 craft brands declined 3.4% on-premise. Smaller craft brands are picking up some of the slack, up 2.5 percent.
The action is in draft craft, as the category accounts for 84% of all craft sales on-premise, Elliott said. On-premise sales of packaged craft beer declined 8.8% during the same period. Elliott credited the experience of getting a draft beer along with quality and price for driving the growth.
Craft beer consumers are willing to pay more, however: a recent Nielsen CGA survey found that craft beer drinkers are willing to pay more than they are being charged for 12-oz. bottles ($5.73 vs. $4.60 per bottle) and 16-oz. draft beers ($6.35 vs. $5.30 per serving).
In addition to the shrinkage on-premise due to the slow decline of neighborhood bars, it seems Millennials are increasingly finding different places to drink beer: 23% of Millennials surveyed said they visited a brewpub or a taproom, and 13% said they visited a "grocer-aunt."
Despite all the marketing and promotional efforts geared their way, the report noted women still don't drink as much as men. Nearly 25% of 21- to 25-year-old women haven't been out for a drink in the last three months. Forty-four percent of women surveyed said they drink beer in on-premise situations, compared to 63% of men. Additionally, 40% of women surveyed said they drink cocktails in on-premise environments, versus 19% of men.