Nielsen CGA: Half of Consumers Unlikely to Return to On-Premise Venues Until a COVID-19 Vaccine or Treatment is Available

The bar and restaurant industry will find little comfort in the most recent report from Nielsen CGA.

With colder temperatures around the country threatening to put a damper on outdoor dining and COVID-19 cases on the rise in the majority of states, about half of all adults say they have no intention of returning to dining or drinking outside their homes soon, the on-premise arm of market research firm Nielsen found.

“There has been very little increase in the past three months,” Nielsen CGA wrote. “This suggests that those who are most comfortable with returning prior to a vaccine or significant change in circumstances have already done so and whether we will see much change in this trend as consumers get more apathetic with the situation will be intriguing.”

In the two weeks leading up to October 16, when Nielsen CGA conducted a two-day survey of 1,600 legal drinking age alcohol-consuming adults in four key states, 49% of respondents had been out for a meal and just 14% had been out for a drink. A smaller percentage — 47% — said they plan to dine out again in the next two weeks.

People who feel comfortable returning to the on-premise are trending a little bit older; 52% of respondents in the 55+ age group had been out for a meal in the most recent two weeks — more than those aged 35-54 (48%) and 21-34 (46%). The 55+ age group’s 52% dine out rate is the highest that any of the three age groups have reported since mid-July. The youngest age group has seen the steadiest rate of on-premise return, increasing 6% from its 41% rate recorded July 17-19.

However, the oldest age group lags far behind the younger age cohorts in going out for drinks. Just 6% of consumers age 55 or older report having gone out to drink in the latest two weeks. Consumers across all age groups are going out to drink at far lower rates than going out for meals. Only 17% of those aged 35-54 and 21% of those aged 21-34 have gone out to drink in the most recent survey period.

Of Nielsen CGA’s four key states (New York, California, Florida and Texas), only California had a meaningful increase in its rate of on-premise return; 43% of Californian respondents had been out for a meal in the most recent two weeks, up from 34% in the prior survey, which was conducted as widespread forest fires affected outdoor dining across the state. All other states saw declines — New York dropped 3%, to 52%; Florida dropped 1%, to 53%; and Texas dropped 3%, to 49%.

When visiting bars and restaurants, consumers are opting to drink domestic beer (21%), red wine (23%) and white wine (21%). Cocktails and vodka are tied for fourth place with 19% of consumers having drunk them; craft beer and imports are tied in fifth with 18%.

Only 9% of consumers have ordered a hard seltzer at a bar or restaurant in the most recent two weeks. Nevertheless, the hard seltzer segment, which skews far more toward off-premise sales, is thriving, as sales have reached $3.676 billion in the 52 weeks ending October 3, according to Nielsen.

Consumers are gravitating toward casual dining chains, which 47% of respondents have patronized, up from 39% last month, and independent restaurants (46%, up from 41% last month).

Those who are going out are doing so more frequently — 59% of respondents told Nielsen CGA they have gone out three or more times. Just 13% of respondents who returned to a bar or restaurant did so only once; 28% of respondents who had gone out did so twice.

More than half (55%) of those who haven’t returned to the on-premise cited not feeling safe “being in close proximity to strangers in these places” as the main reason why they have stayed away. Slightly less than half (48%) said they “don’t feel safe going out at the moment” and 42% said it will take them “a while to feel comfortable visiting these places.”

Conditions to be met for those consumers to return to the on-premise are varied:

  • 41% will when a treatment or vaccine is available;
  • 34% will once the threat of COVID-19 is “completely gone;”
  • 20% will when cases fall below a certain number;
  • 18% are unsure;
  • 17% will once the number of cases does not increase again;
  • 11% will when outlets have “demonstrated successful social distancing.”

Consumers largely agree on factors that would encourage them to visit a bar or restaurant in the coming weeks: staff wearing masks and gloves (47%), outdoor seating (45%), and fewer tables or patrons to accommodate social distancing (42%).

The majority of respondents (57%) told Nielsen CGA their drinking habits have remained unchanged. Meanwhile, 29% said they’re drinking more, up 3% from last month; 14% said they’re drinking less, down from 17% last month.

Only a quarter of respondents (24%) said they’re going out to bars and restaurants about the same amount as they did before the pandemic reached the U.S. in mid-March. Just 11% said they’re going out more, while 65% are going out less often.

When they do go out, 62% of respondents said they’re tipping more, and 53% said they’re “more willing to treat myself on each occasion.”

In a separate study, Nielsen CGA found that on-premise activity in key states is concentrated outside major cities, likely hurting from a lack of tourism.

For example, on-premise sale velocity in New York City is 48% below where it was the same time last year, but the rest of the state is flat compared to 2019. In Louisiana, New Orleans’ on-premise velocity is 52% below 2019 levels, while the rest of the state is just 2% below. In Florida, both Orlando (-18%) and Miami (-9%) have decreased sales velocity, but velocity has increased 3% across the rest of the state compared to 2019.

Almost all segments of the beer/FMB/cider category have increased dollar sales in off-premise retailers tracked by Nielsen over the latest four-week period ending October 3. The overall category has increased dollar sales 14.3%, to $3.78 billion in those four weeks. The category has sold $46.7 billion in the latest 52 weeks, an increase of 13.1% over the same period last year. However, the off-premise dollar gains represent a shift in consumption from bars and restaurants to at home, and are not enough to offset on-premise losses.

Segments in decline include hard soda, down 18.5% in the latest four weeks; budget beer, down 1.7%; and malt liquor, down 8.8%.

Dollar sales of all other segments have increased in the latest four weeks:

  • Cider +20.2% (+7.3% in the latest 52 weeks);
  • FMBs +53.1% (+70.7% in the latest 52 weeks);
  • Hard seltzer +104.6% (+192.8% in the latest 52 weeks);
  • Domestic premium +4.6% (+3% in the latest 52 weeks);
  • Domestic super premium +20.4% (+16.1% in the latest 52 weeks);
  • Craft +17.8% (+10.5 in the latest 52 weeks);
  • Imports +14.6% (+13.3% in the latest 52 weeks).

Despite a nationwide inventory shortage, dollar sales of cans have increased 16.6% in the latest four weeks; dollar sales of bottles have increased 10.5%. Unsurprisingly, dollar sales of kegs are down 13.7% compared to the same period last year, but those declines are decelerating as some on-premise venues reopen.