What will 2024 bring to on-premise drinking? To help brands and operators prepare for the year ahead, OnPrem Insights’ team analyzed Union’s guest ordering data to identify the top trends to follow this year. We landed on six exciting trends on the horizon for 2024, all well-supported by data for the 12-month period ended October 31, 2023.
The key insights that rose to the top: Tequila will continue its relentless rise to become the best-selling Spirit at Union bars and restaurants, non-alcoholic spirits will finally take hold on-premise, Mexican beer sales will increase while Bud Light continues its plateau, and more.
What’s spiking, what’s lagging, and what’s around the bend — it’s all here, based on data from more than 1,000 high-volume bars and restaurants across the U.S.
Agave Spirit Sales Will Surpass Vodka
Last year OnPrem Insights reported that Agave-based spirits overtook Whiskey for the first time. Tequila and Mezcal sales have remained sandwiched tightly between the No. 1 best-selling Spirit, Vodka, and No. 3, Whiskey.
Tequila and Mezcal continue gaining ground, now representing 29.4 percent share of Spirits sold on-premise, with 2 percent growth. By comparison, Vodka currently leads in Spirits sales share at 30.5 percent, but its share declined about -2.8 percent this period.
“All signs point to Tequila closing in on — and surpassing — Vodka in 2024,” says Layne Cox, chief marketing officer at Union. “We’re closely monitoring the data to watch this trendline, because it will be yet another on-premise milestone for agave-based drinks.”
Where is this growth coming from? Union data shows that Tequila drinkers in the current period drank 13 percent less Vodka and 14 percent less Whiskey than in the previous period. Mezcal and Mezcal-based cocktails are the fastest growing subcategory of agave-based spirits, with nearly 20 percent growth in the past year compared to the previous 12-month period. Note: For the purposes of representing comprehensive agave spirits share, Union is including Mezcal in this report.
“Increasingly, Union venues are adding Mezcal-based riffs on classic drinks to their menus. But they’re not just playing off of classic Tequila cocktails,” Cox says. “Expect to see more innovative concoctions like Mezcal Negronis.”
Reposado Tequila, a premium style for sipping, is another fast-growing agave spirit subcategory, with its share of all liquor increasing by about 8 percent. Reposado Tequila represents about 5 percent share of overall sales, but it’s still a significant increase from the prior period, and Reposado’s success is impacting other categories like Cordials.
As Tequila grows, the Margarita continues as the No. 1 best-selling on-premise cocktail at Union. Don’t expect that top ranking to change anytime soon, says Cox. Nonetheless, other Tequila-based favorites like the Paloma are also showing strong promise heading into the new year.
Premiumization Momentum Strong at On-Premise
While it’s true that just about everything on the beverage menu has become more expensive, the Spirits premiumization trend will stay relatively strong in 2024 at on-premise as guests continue to splurge on higher-priced drinks.
Globally, some industry metrics are showing deceleration of spirits premiumization, but ordering data from Union’s venues shows consistent growth for premium-priced drinks into next year. In fact, data shows guests are opting for more expensive drinks more often than they were in the past, as the share of drinks selling for $15 or more has almost doubled over the past two years.
“On-premise appears to be a pocket of the industry where premium-priced drinks continue to sell very well,” Cox says. “Uncertain economic times do not seem to be impacting premium sales at Union venues in the U.S.”
Despite price increases for the most expensive drinks, Call ($10 to $15), Premium ($15 to $22), and Ultra-Premium (above $22) tiered drinks continue to increase their share as compared to lower-priced drinks. In fact, Premium and Ultra Premium are growing more quickly. “Guests continue to spend more on higher quality drinks, which signals a higher quality beverage,” Cox says. “It says a lot about what they want from their away-from-home drinking occasions.” Prices reflect averages across Union’s U.S. venues.
Average prices for on-premise alcohol drinks are up across the board, but it’s most notable for cocktails. Some of the highest price increases are on classic cocktails like the Manhattan and Sazerac — up over $1 per drink — in addition to non-mainstream beer categories like Craft Beer, Imported Beer, and Cider, which are up about 25 cents per drink. Whiskeys are up more than any other mainstream categories, with Bourbon commanding an additional 41 cents more per drink, on average.
“It’s possible the premiumization trend is slowing and normalizing compared to past years when it skyrocketed, but it’s still relatively strong,” Cox adds. “It shows guests’ desire for high-quality on-premise beverage experiences even in the face of rising prices.”
Vodka-based Options Will Drive RTD Growth
Expect the long-anticipated shift toward spirit-based RTDs to be in full swing this year. Hard seltzer has been losing command of on-premise RTDs, as High Noon recently replaced White Claw as the No. 1 selling RTD at Union venues.
“On-premise, Vodka-based RTDs are showing the most promise into 2024, led by High Noon and Nütrl,” says Cox. Malt-based White Claw is still a top-seller, but its share of RTD sales has been steadily declining, and Union data points to a continued downward trajectory over the next year.
Top-Selling RTD Brands at Union Venues
- High Noon (Vodka)
- White Claw (Malt)
- Nütrl (Vodka)
- Truly (Malt)
- Topo Chico (Malt or Tequila)
- Twisted Tea (Malt)
- Stateside (Vodka)
- Canteen (Vodka, Tequila)
- The Long Drink (Gin)
- Bud Light Seltzer (Malt)
Source: OnPrem Insights. 12 months ending October 31, 2023. Ranked by dollar sales. Excludes wine-based RTDs.
High Noon is on top — representing 75 percent share of all Spirit-based RTDs — but it will face increasing competition from Nütrl in 2024. Pineapple, orange, and watermelon-flavored Nütrl are popular items at Union venues.
While brand innovation is leading to SKU proliferation in retail, and not all RTD drinkers are alike, Union’s on-premise data shows that just a few brands dominate RTD sales in bars and restaurants. The top five best-selling RTDs represent over 90 percent of on-premise RTD sales.
“A lot of brands are playing in this RTD space now, but bars struggle with limited refrigerator space, so competition for placement is fierce,” Cox says.
One emerging brand showing potential for high velocity on-premise growth this year is Surfside Iced Tea, made with Stateside Vodka. While sales of the Philadelphia-based RTD Spirits brand are small compared to High Noon or Nütrl, it is selling exceptionally well in the Northeast region, in markets beyond its Philadelphia home base.
Growth opportunities for RTDs this year will be in settings that thrive on convenience, Cox notes, like live music venues, bar patios, and beer gardens. “Independent bars can look to experiment with brand and product mix to differentiate their menus,” she adds.
All Eyes on Imported Beer
Last year was a sobering one for the beer industry, given that volumes are down, Bud Light has yet to recover from its large decline, and Craft Beer brands are battling it out for operators’ attention.
One bright spot for the industry in 2024 will be Imported Beers, up about 6 percent in share growth on-premise. Mexican Beer remains the most popular of all non-domestic categories, representing just over half of all Imported Beers at Union venues.
“The Mexican segment is significant, and some brands, like Modelo, are having outsized success on-premise,” explains Cox. “Guest interest in Modelo wasn’t a knee-jerk reaction to the fall of Bud Light. The brand’s growth has been steady over the past two years, which is a positive sign for Modelo heading into 2024.”
Representing nearly a quarter of import’s share is Irish Beer, with share up by 18 percent. Guinness is showing growth potential into next year, as are smaller brands like Smithwick’s Irish Ale.
“This year promises to be a wild ride for the beer industry,” says Cox, “and we’ll be diving into these trends in future reports, to keep up with everything from imported beer growth to Bud Light’s trajectory.”
Since OnPrem Insights last reported that Miller Lite became the new king of beers on-premise, Bud Light has remained positioned as the No. 4 overall beer at Union venues. However, Miller Lite and Michelob Ultra are both vying for the No. 1 spot now, with Coors Light in third. Dos Equis (No. 4) and Corona (No. 5) currently lead Modelo, which ranks in seventh place across all Beer sold at Union bars and restaurants.
The Espresso Martini Will Overtake the Old Fashioned
We analyzed last year’s fastest-growing cocktails at Union’s high volume bars and restaurants to get a glimpse at what 2024 could bring.
The revival of the modern classic Espresso Martini shows no signs of slowing its caffeinated rise to the top. In fact, it’s already Union’s No. 3 best-selling cocktail overall. “The Espresso Martini is experiencing more than 50 percent share growth year over year. The cocktail is well positioned to outsell the Old Fashioned as the No. 2 top-selling cocktail at on-premise sales this year,” says Cox.
The Blue Hawaiian, a Rum-based concoction made with Blue Curaçao and cream of coconut, took us by surprise as it has recently soared 10 spots to secure the No. 21 ranking among the best-selling cocktails sold at Union with monumental growth. Where will this 1950s Tiki throwback go in 2024? Retro cocktails are in fashion, and Union data points to this one becoming a trendsetter soon.
Fastest-growing Cocktails at Union Venues
- Blue Hawaiian
- Espresso Martini
- Aperol Spritz
- Apple Martini
- Negroni
Source: OnPrem Insights, 12 months period ending October 31, 2023. Ranked by percent share change.
Like the Espresso Martini, the Aperol Spritz is now so beloved by guests that more Spritz variations on bar menus are a sure bet for 2024. In a recent OnPrem Insights report, the drink showed strong growth beyond warm weather seasonal boundaries, and its 37 percent year-over-year growth rate proves there’s still a lot of love for the bubbly, lower ABV cocktail.
The 1990s Martini staple known as the Appletini has been experiencing a resurgence as well, this time as a less cloyingly sweet drink revisited for the modern palate. With solid growth, this apple-flavored ‘Tini craze will surely continue on-premise into 2024.
Last year we reported that the Negroni, the quintessential cocktail enthusiasts’ drink, has been a growing hit on-premise. Its 19 percent growth rate makes it the fifth fastest-growing cocktail on Union menus, with riffs like the Mezcal Negroni, Cherry Negroni, and White Negroni set to make appearances more and more on menus as some of the most popular variations on the classic recipe.
“Brands and operators should have these fast-growing cocktails on their radar, and be thinking about how these drinks could appeal to their own customer base in the coming year,” says Cox.
Non-Alcoholic Spirits Growing at On-Premise
Non-alcoholic beverage sales still account for a very small on-premise market share, at less than 1 percent, but they have grown about 50 percent year over year at Union venues.
Non-Alcoholic Spirit sales have traditionally been eclipsed by Non-Alcoholic Beer sales, according to guest ordering data. And while Non-Alcoholic Beer has lost some share to Non-Alcoholic Spirits over the past year, on-premise consumption hasn’t yet reflected the excitement around new zero-proof spirits brands that are front-and-center at retail.
“But that’s about to change,” explains Cox. “So many Non-Alcoholic Spirits brands have gone mainstream now, and consumers are beginning to understand that there are delicious, sophisticated options that are appropriate for a social bar experience.”
In Non-Alcoholic Spirits, the CleanCo brand dominates Union venues with its Clean T (Tequila), CleanCo V (Vodka), CleanCo G (Gin), and CleanCo R (Rum) options. The U.K. brand that launched in the U.S. in 2021 has taken a savvy approach in operators’ eyes, with a straightforward range of non-alcoholic spirits that can be easily swapped in for traditional pours. Other brands carried by Union venues include Seedlip and Ritual Zero Proof, though CleanCo leads by far in the Non-Alcoholic Spirits space on-premise.
Non-Alcoholic Spirits now account for about 10 percent of the Non-Alcoholic category at Union venues, with Non-Alcoholic Beer accounting for the remaining 90 percent. Currently, the top five best-selling non-alcoholic drinks on-premise (not including waters and sodas) are all Beer, with Heineken 0.0 representing nearly 50 percent of all Non-Alcoholic sales. In No. 2 is Athletic Brewing’s Run Wild IPA, a Craft brand that recently overtook O’Doul’s, a longstanding mainstream option.
Innovative drink brands that blur categories will continue to grow in 2024, including Hop Wtr, a sparkling water infused with aromatic hops, adaptogens, and nootropics.
“There’s a big opportunity for Non-Alcoholic Spirits brands to make a splash this year at bars and restaurants. We’ll be watching orders throughout Dry January,” says Cox.
