CGA at the RC Show: Ten Key Insights

As Canada’s On Premise surges back from COVID-19, exciting new opportunities are emerging in bars and restaurants. At the recent RC Show, CGA’s Matthew Crompton, regional director – North America, and Mitch Stefani, Client Solutions Manager, provided insights into the latest consumer behaviour the channel is seeing and some of the trends that are taking place. (Download the full report here.)

Here are 10 of the key takeaways:

1 Spend is rising

After a tough two years, CGA’s Canada On Premise Pulse Report shows sales are building back well. A quarter (26%) of consumers now expect to increase their spend in the next 12 months—well over twice the number who expect to spend less (10%). More than four in five (85%) plan to drink out over the next month—a sharp rise from 57% in January. CGA’s BeverageTrak service meanwhile indicates sales velocity is currently running 9% ahead of the pre-COVID-19 levels of 2019. As more pent-up demand is released, suppliers have a great chance to drive loyalty and trial.

2 Beer leads, cocktails flourish

CGA’s Canada On Premise User Survey shows half (51%) of consumers typically drink beer in the On Premise, and demand for domestic brands (48%) outstrips imports (42%) and craft (42%). While fewer consumers (15%) drink cocktails, CGA’s data reveals strong growth globally, with the Caesar, Margarita and Sangria being the top offerings consumers engage with. A particular favourite among Canadians, the Caesar cocktail has shown increased engagement with the percentage of consumers drinking it growing from 27% in 2020 to 35% in 2022.

3 Consumers want familiarity and value

As people return to bars, many are looking for brands they know well. More than half (58%) say they have purchased mainstream and well-recognised brands—much higher than the 18% who are buying new brands and the 23% who are purchasing both. Consumers are also chasing value: 48% have only bought value drinks—twice the number who have only purchased premium ones (25%). This highlights the need to carefully develop assortments that appeal to a wide variety of consumers.

4 Drinkers are staying local

Lockdowns led many consumers in Canada to eat and drink out close to home, and those habits are continuing. The Canada On Premise Pulse Report reveals two thirds (66%) are putting an emphasis on supporting local establishments when choosing bars and restaurants to visit.

5 Experience is king

As in many countries analysed by CGA, many consumers returning to the On Premise are looking for more than just food and drink. A third (33%) say they are visiting experiential bars more than they did pre-COVID-19—building up a specific channel that was picking up steam prior to lockdowns taking place.

6 Travel is opening up new channels

New opportunities are also emerging through the bounce-back in domestic travel. More than a third (38%) of consumers say they are visiting airport bars more often than they did before COVID-19, and 91% of those with summer travel plans intend to visit bars, restaurants and similar outlets on their trips.

7 Influencing choice is key

While four in five (80%) consumers know what category they will drink before arriving in a venue, there are still multiple ways that consumer’s path to purchase can be influenced. Menus are crucial, as a third (35%) are influenced by descriptions of drinks there, with the ability to cater to consumers’ preferences through both physical and digital options. Bartenders and staff also play a significant role in guiding consumers to purchase a specific product, as 33% of consumers say staff influence their decision to purchase specific products

8 Consumers want healthy options

COVID-19 has sharpened people’s focus on wellbeing and caused some important changes in drinks choices. Nearly a quarter (24%) of consumers have now tried non-alcoholic drinks in the On Premise—an increase of three percentage points in three years—and new low or no-alcohol beer and spirits brands are gaining traction.

9 Hard seltzers and RTDs have headroom for growth

Canada’s On Premise is slowly following the US’ upward trajectory in hard seltzer sales. One in ten (10%) consumers now drink them out-of-home—up from 7% two years ago. A similar number (11%) say they drink RTD products, with pre-mixed cocktails, single-serve wines and packaged spirits and mixers all gaining popularity.

10 Dayparts are shifting

With consumers returning to the office, and daily routines becoming more normalized to pre-COVID-19 levels, visitation during the weekdays has become more popular in recent months. Brunch in particular is an occasion that has shined coming out of COVID, which forced more weekend visitation, as 21% of consumers say they visit the On Premise for this occasion versus 7% doing so in Spring 2020.

CGA’s best-in-class research and expert analysis open up many more insights into these and other key trends in Canada’s On Premise. To learn how they can help businesses develop winning strategies, contact CGA regional director Matthew Crompton at matthew.crompton@cgastrategy.com or solutions manager Mitch Stefani at mitch.stefani@cgastrategy.com.