The On-Premise Is Reopening. Now What?

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The on-premise is beginning to reopen to business, and this post is a collection of new data points from consumer surveys or regarding spending trends as we start to get more numbers on what things might look like over the next few months.

I’ll start by pointing to multiple data sets that show that government stay-at-home orders were only one piece of the puzzle. Data from multiple sources, including spending data from Opportunity Insights and cell phone movement data from a variety of sources indicates that Americans were staying home and spending less prior to official state stay-at-home orders, and while there has been growth in various measures in states that have relaxed those orders, it isn’t business as usual.

Here are two data points, looking at leisure and hospitality small business revenue from Opportunity Insights, plotted against Google searches for “brewery near me.” To even out day-of-the-week effects, I’ve used a seven-day rolling average on the brewery search data, which introduces some lag, particularly around Valentine’s day (I’m glad people think of brewery visits as a romantic outing).

Taken together, the front end spending data suggests that the lifting of stay-at-home orders will only have a partial effect; if people were staying home before they were in place, some will likely stay at home after they are lifted. To investigate how much of an effect they might have, one place we can turn is consumer surveys.

Consumer Surveys

Most of the additional data points we are seeing right now seem to largely back up the findings that I published earlier in the month including Monday Night’s survey of their customers and Datassential’s survey of a nationally representative sample of on-premise consumers. Depending on the survey, its sample, and how the question is asked, somewhere between 20-40% of people are ready to get back out into the world. Somewhere around one third are thinking about it, but waiting for more signs of progress or simply giving it a few weeks. Finally, there is a group that is most hesitant, and will require the most convincing to resume previous patterns.

Delving in, we got some new data from Nielsen CGA on how many consumers have actually returned out to eat and drink in Tennessee, Texas, Florida, and Georgia, all states that have partially reopened. A survey of 1,600 consumers from May 9-11 found that 21% had been out to eat in bars and restaurants, and 10% had been out to drink. That’s right in line with the Datassential finding (20% ready to dine-in right away), and a bit lower than the percentage we’ve seen in brewery or beer industry specific surveys, suggesting either those are measuring a different population, or that they have some other biases (such as optimism bias) built in.

The North Carolina (NC) Brewers Guild also conducted a survey of more than 4,000 21+ adults, finding 36% anticipating they would visit a taproom or restaurant. This is possibly a bit higher due to selection effects, as this non-random sample was likely to sweep in a few more beer enthusiasts than the general population. Speaking of enthusiasts, the most positive survey result this week came from a survey on Beeradvocate where, as of writing this, 42% of the more than 1,200 people who responded said they were ready to return to taprooms, bars, restaurants, and beer gardens. This result is almost certainly not generalizable to the wider population, but may be a good snapshot of the future behavior of the most committed beer lovers.

The NC Brewers Guild was kind enough to make their full data set available to me, and delving under the hood, we can get some additional insights by interacting the willingness of people to return to the on-premise with some of their other answers.

I want to quickly highlight three of these. The first is how important additional measures are to get them back in the door. Perhaps not surprisingly, those that are ready to come back first care the least about additional preventative measures. Only 28% of those who are ready to go at the start of North Carolina’s Phase 2 say that additional safety measures are “extremely important” to them, with 42% saying that things like signage are sufficient, and 29% saying they don’t care at all.

How important is it that your favorite taproom or brewpub communicates clear safety protocols to its customers?

At each later stage, safety protocols become more important. I bring this up to highlight that what you hear from your first customers as important won’t be what gets the next wave to come in.

Next, we can do the same thing with the most important priorities by time ready to return.

Which of the below additional safety measures would make you more likely to visit (% saying it was #1 priority)?

This is the percentage of respondents that ranked that step as their number one priority (you’d get slightly different results if you used averages, top three priorities, or other methods). Again, what’s important to the first group of customers will be less important to the next groups, and vice-versa. Things like touchless protocols in payment and restrooms get more important as the groups get more risk averse.

Finally, here’s the likelihood that customers will continue to use curbside and/or delivery by time they plan to return. I find this the most interesting result.

Once taprooms and brewpubs have reopened for onsite consumption, how likely are you to continue to use curbside pickup or delivery options?

At some level, this is exactly what you’d expect to see. Those who say they are going to visit will use these methods less as they come back in, and those who are wary about being back in public spaces are going to continue to use them. That’s good news and suggests breweries will be able to keep up some of their to-go and delivery sales even as customers return. It also means breweries shouldn’t lose focus on these channels even as they partially reopen.

In terms of regulations, it suggests that state regulators need to keep flexibility in any temporary rules if they want to help customers and businesses through the rest of 2020. I’d point out that 16% of customers who are ready to come back in still think they are very likely to use these methods and 32% think they will still use them somewhat. To me, that suggests there will be some stickiness in demand for these channels even as the on-premise moves back to normality. If the group most eager to come back out to bars and breweries still has 47% who are very or somewhat likely to continue to utilize these channels (numbers don’t sum due to rounding).