Smoking ban boosts take-home trend
According to a recent report from Mintel Ireland, there has been a continuing trend towards home consumption of alcohol at the expense of the on-trade, exacerbated by the ban on smoking in pubs introduced in 2004. The report also looks at demographic consumption trends and social attitudes to drinking.
Despite alcohol consumption by adults on both sides of the border declining over the past 10 years, Ireland still has the third-largest level of adult alcohol consumption across Europe, according to a recent report, 'Attitudes To Drinking', from Mintel Ireland.
The report finds that from 1994 to 2004 Northern Ireland alcohol consumption declined by 5% with the average adult spending GBP770 on alcohol in 2004, while the Republic suffered an 8% decline - but the average spend per year is still almost double that in NI at GBP1,335 per adult.
'Attitudes To Drinking' examines the reasons behind the overall decline of alcohol sales. It looks at the effect of the smoking ban and the price war between pubs and off-licences. It also examines changing consumer attitudes towards their social time activities.
Eamonn Finn from Mintel Ireland explains that the smoking ban here has only given a short-term boost to what was already a long-term trend of increased drinking at home. "In 2004, off-licence sales increased by 19% in sales volume and now accounts for 29% of all alcohol volume sold in Ireland," Finn said. "Since the introduction of the smoking ban in March 2004, only 7% of RoI (Republic of Ireland) respondents reported drinking less in pubs, and consumer support for the ban remains strong at 47%.
"However, it's the widening gulf in prices between the pub and off-licence that we found is causing the biggest decline in in-pub drinking. Pubs have lost a 5% volume share to the off-trade as the increasing cost of drinking in a pub is making it more economically wise for consumers to drink more at home either before or instead of going out which obviously has long term implications for Irish pubs."
While there has been an overall decline in alcohol consumption, within the market there are considerable changes in consumption of different types of alcohol.
Beer consumption has dropped by 15% across the island of Ireland with only premium beers experiencing an increase in sales, Mintel reports. Some 37.5% of consumers, particularly 18- to 24-year-old men, are particularly willing to pay a premium for a good pint.
Eamonn Finn continues: "This trend does not translate to the wine market which has seen a huge increase in consumption, 30% in NI and 53% in RoI with only the more affluent older consumers agreeing that they would pay more for a good quality bottle of wine. Average wine prices are falling in off-licences but an increased range of wines means consumers tend to stick to what they know, making it harder for more expensive quality wines to break through. With so much choice available in the wine market, the clearly-branded wines with English language labels are the ones the non-wine connoisseurs are choosing."
The FAB market experienced a boom in growth from 1999 to 2004 but figures for 2003 to 2004 show little change in sales growth indicating a mature market.
The Mintel Ireland report found that consumer attitudes towards the consumption of alcohol are also very telling, with only 10% of adults agreeing with the statement that the point of drinking alcohol is to get drunk.
Finn explains: "Consumers don't go to pubs for the sole purpose of getting drunk anymore and instead go to pubs for social reasons with alcohol helping them relax. One of the problems facing the pub industry is that they have tended to focus more on volume sales rather than the wider social experience of their clientele."
The range of entertainment offered by pubs has not changed for decades, and now the smoking ban, coupled with rising prices, has forced consumers to take their custom elsewhere. Pubs are now competing with social hubs such as coffee shops, restaurants (which have experienced a boost since the smoking ban) as well as cinema, theatres and home entertaining. "Pubs now need to provide tangible benefits to consumers in order to win back trade," he states.
The Mintel research also asks consumers about their preference for longer opening hours in pubs and, in keeping with the overall downturn in the industry, there has been a decrease in consumers agreeing that pubs should be allowed to have longer opening hours. Since 2000 there has been a 5% reduction, with only 25% of consumers surveyed agreeing that pubs should be allowed to stay open longer.
The drinks industry has largely relied on the 18- to 35-year-old market who traditionally have the highest consumption of alcohol in Ireland. However, this is a static population and, along with the general decline in alcohol consumption, the drinks industry needs to look at other groups, most notably the older more affluent consumers for growth potential.
Although older people tend to drink less and visit pubs less frequently, they do represent a sizeable and increasingly affluent market and, at the minute, brewers and publicans only seem to cater for older adults as a secondary thought to the younger market, the report states. By making the pub experience more attractive to the older market publicans will at least be moving in the right direction.
This article first appeared in the September edition of Drinks Industry Ireland magazine, read by those responsible for retailing more than 80% of product in the Irish pub, hotel, nightclub and off-licence industries. For more information contact firstname.lastname@example.org.
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