Rising prices and a slight dip in guest traffic have contributed to falling spirits sales in the on-premise channel over the last year, according to a new report from market research firm NIQ’s on-premise data arm CGA.
On-premise spirit sales by volume dropped -3.3% on-premise in the 52-weeks through early September, reported CGA.
Prices of 1.5 oz spirit pours have risen by an average of +4.8% from the previous 52-week period, generating a +1.4% increase in sales by dollar value.
With consumers feeling the squeeze, value and mid-range spirits recorded the biggest drops in sales by volume over the last year, down by -8.6% and -6.4%, respectively, compared to the same period last year. But sales of premium and super-premium spirits both fell by less than -1%, while the ultra category grew by +3.5%. That’s a contrast to the off-premise, where luxury spirits have taken a dip, according to SipSource data.
Price increases may have slightly reduced the visits and purchases of consumers who have had limited discretionary spending in 2023, per the report. The number of consumers visiting on-premise at least three times in the previous three-month period dropped from 81% in May to 79% in October.
Among CGA’s tracked markets, New York (+3.9%) leads in the last 52 weeks by volume growth, followed by Illinois (+2.8%). However, volumes were down in most other regions, including key states like California (-1.6%) and Texas (-6.9%).
Gin was the only spirit to achieve an increase in volume sales over the 52-week period. The on-premise’s three biggest spirit categories—whiskey (-2.7%), tequila (- 0.8%) and vodka (-3.4%)—were all in the red. However, value was up for all four categories with whiskey leading (+3.6%) and gin on its heels (+3.3%) followed by tequila (+2.6%).