On-trade booze rises to £24bn

The UK on-trade saw the value of booze sales rise to £24.4 billion in 2016, despite falling volumes, with restaurants leading the charge.

According to the CGA’s exclusive Alcohol Sales Tracker, out this week, the value of alcohol sales rose 1.8% in 2016 across the UK’s pubs, bar and restaurant market – around £428m higher than in 2015 – despite a 1.7% fall in volume sales during the same period.

Phil Tate, chief executive of research and insight consultancy CGA Strategy, said it was a “solid performance” particularly as it was set against “a background of sketchy consumer confidence and economic uncertainty”, in which costs were rising and real terms growth was hard to come by in the eating-out sector.

The move reflected the on-going trend for consumers trading up and looking for more premium products, he added.

“It shows that people are drinking less, but looking for better quality,” he said. “[It] reflects the strength and innovation of pub, bar and restaurant operators around the country and the continuing move towards more premium products,” Tate said.

The results were dominated by food-led businesses, which saw a 4.4% rise in value alcohol sales, primarily on the back of the improvement of many restaurants’ drinks lists and the increasing number of casual dining brands on the high street.

Growth was more sluggish in the wet-led sector, rising only 0.6%, but pubs with managed licenses fared better, rising 3.3%, reflecting the efforts made by managed groups to enhance their pub and restaurant brands, Tate noted. Independent pubs also saw more modest rises, with value of sales up 1.7%.

“Our figures show a licensed trade that is promoting its drinks well amid some pretty tough trading conditions,” Tate argued. He noted that it has never been more important to offer a “considered, compelling and customer-centric” drinks list that gave choice without overwhelming consumers.

“Restaurants that provide interesting and distinctive ranges of drinks will have a much better chance of driving footfall and loyalty in the years ahead,” he added.

In terms of a breakdown by drinks, it was premium lager that saw the largest increase of value of sales, up £213.5 million on the previous year, with craft beer hot on its heels, rising in value by £190.4 million, and ahead of world lager, which saw sales up £152.1 million. On the wine and spirit side, the value of Prosecco rose £63.5 million, while ‘trend of the moment’, gin was driven by the premium category, whose sales of 55.8 million pushed overall gin sales up 91.1 million. Another spirit of note, the CGA highlighted, was Golden Rum, whose saw overall value sales rise £38 million.

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