Premium drinks – the way forward for 2018?

29th November 2017

New research from CGA has revealed British consumers to increasingly be opting for premium drinks brands with young adults leading the shift. This shift has led in turn to a surge in the sales and development of craft beers and luxury spirits.

< Download the full report at the end of this post >

The Going Premium report showed that more than 2 in 5 (43%) now choose higher quality premium drinks and are more likely to upgrade when drinking out of the home. This figure rose to more than half (54%) among 18-34-year-olds.

Interestingly despite millennials often being described as the most financially stretched they are choosing to spend more on premium drinks in order to feel closer to quality and purer ingredients.

CGA’s report showed there to be an increase in sales for the ‘super-premium- drinks brands with volumes up by nearly 12% in the year to June. Artisan spirits, in particular, gin, lead the charge along with their premium mixers.

The trend didn’t end with spirits with the report also showing a surge in craft-beer sales, with volumes increasing by 14.5% in the year to June.

These findings emphasise the importance of premium drinks brands to pubs, bars, restaurants and hotels with those choosing to premium drinks on average spending 26% more than their non-premium counterparts.

CGA chief executive Phil Tate said: “The shift towards premium brands has been one of the most fascinating trends in drinking out in recent years. This report casts new light on the factors behind premiumisation and its consequences and has some vital insights into the soaring appeal of luxury brands in particular. Operators will need to stay right on top of drinking trends like these if they are to generate spend and loyalty in this ultra-competitive market.”

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Info-graphic from CGA report

But what is causing millennials to spend on premium brands?

Generational research has shown that the millennial generation (16-34-year-olds) seek out brands with a story and a level of personalisation, fitting with the expansion of micro-breweries and distilleries in the UK in the last 5 years. Willing to pay more for an authentic niche product this could be one explanation for this sudden rise in premium drinking.

Additionally how people approach a night out has changed.

Deltic Group chief executive Peter Marks said  “People are looking for a quality, premium experience on a night out and we have to be on that trend. However, the reason for going out has moved away from just catching up with friends to escaping from the pressures of everyday life and having fun and a laugh. The late-night sector is in good health – there have been ups and downs but, contrary to some reports, the past five years have been stable and we’re doing this research to try to show that.”

With consumers demanding more choice and clearly willing to spend more for premium products, bars and pubs must respond by stocking a wider variety of products to fit the market.

 

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