Picture of the Week Vol. 5 – Drinking at home

Source: RBC Capital Markets

Nik Modi

February 3rd

In this week’s picture: We take a look at different locations where people consume spirits and wine and discuss the reasons people choose to drink at home rather than on-premise.

More people drinking at home than on-premise: On-premise consumption has always been an important area of the beverage alcohol industry (as trends on-promise typically move into off-premise channels). However, research from the IWSR shows that more consumers are choosing to consumer their beverage alcohol products at home. Survey data shows that ~51% of people drink spirits at their homes or someone else’s home, and ~60% of them drink wine at home vs. on-premise.

Reasons to drink at home: Many reasons favor drinking at one’s own home or someone else’s home over drinking at a bar, a restaurant, or other locations. First is that home get-togethers are naturally pre-screened for selective social interactions. It can also be more entertaining to watch friends and families showing their home-bartending skills, and home owners are incentivized especially if they have nice home bars. In addition, the price of spirits or wine consumed is much more transparent at home, while drinks at restaurants and bars are sold at significant mark-ups. Moreover, as pointed out in our previous notes, more high-end restaurants such as Olive Garden and Red Robin Gourmet Burgers are providing better quality take-out/prepared foods and upgrading their digital capabilities to ensure mobile orders and easy delivery to home, making it much easier to organize parties at home.