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Nielsen Takes a Look into America’s Back Bar

It’s no secret that Americans have a fever for flavor when it comes to alcoholic beverages. Spirit flavors, led by vodka, span the gambit from docile, such as lemon and vanilla, to obscure, such as pickle, cotton candy, salmon and horseradish, just to name a few.

But when consumers head out to their favorite bar and sit down to ponder their choices, when does the power of choice become powerfully overwhelming? From a business perspective, when bartenders are juggling a deluge of lower-priced flavor options to serve to customers versus upselling premium, less-visible options, is the overcrowded back bar hurting the bottom line for American on premise outlets? How much is too much?

These questions were the inspiration behind recent research conducted by Nielsen/CGA, a global joint venture between Nielsen and CGA Strategy created to strengthen Nielsen’s on-premise market measurement services. According to these findings, the average on-premise outlet within the U.S., which includes bars, clubs and restaurants, stocks 56.7 spirit products. While that may not sound excessive, it’s almost double the selection found in similar mature markets. For reference, on-premise outlets in the U.K. stock an average of 32.9 spirit products.

Field researchers visited more than 900 bars, clubs and restaurants during August and September 2015 to see what’s being stocked. During these visits, the researchers found that whiskey and flavored vodka represent 43% of all spirit products stocked across the U.S. on-premise market, and nearly one in five of every stocked product is flavored vodka. In fact, the average outlet stocks 3.2 citrus flavored vodkas, which is the same number of distinct gin products that outlets stock, as well as the cognac and Irish whisky categories combined.

At a regional level, the range of spirits available in the on-premise market differs significantly across major markets. Which U.S. city has the greatest choice? The data shows that Chicago leads the way in variety, 22% ahead of the national average, with New York and Denver closely behind, and Dallas and Boston trailing.

It’s clear that the huge range of flavored vodkas, and, to some extent, the growing popularity of American whisky, are driving the variety of options that on-premise locations are now stocking. That said, over-stocking a category can cause flavor fatigue among consumers because they may not see the difference between what’s in their glass and what the next mix will bring.

This research brings to light a possible risk for on-premise operators and poses valid questions for the industry to ponder. To help answer these questions, Nielsen will be launching Brand Index, providing the first ever robust, fully projected on-premise measurement data in January 2016. Brand Index will allow producers to more clearly understand their performance and share category, as well as key competitors, at the national U.S. level as well as (initially) across nine census regions and six key markets.