The Australian pub industry is poised for a remarkable resurgence as we head into Summer and 2024.
With the closure of pubs and restrictions on social gatherings affecting not only the hospitality sector but also the fabric of Australian society, the industry experienced a staggering deficit of $2 billion in 2022. However, a new $1 billion opportunity now beckons, offering hope and revitalisation, for both publicans and pub-goers.
The latest IBISWorld Pubs, Bars, and Nightclubs in Australia 2022 report reveals that the industry’s revenue in 2022 (calendar year) was more than $2 billion lower than pre-COVID levels. Although the industry is on a path to recovery, it is forecast that total annual revenue will remain $1 billion below pre-pandemic levels in 2023. This decline can be attributed to shifting consumer behaviors and the increasing cost of living.
Addressing the Challenge of Post-COVID Behavior Change
During the pandemic, the convenience of ordering home-delivered meals through food delivery apps became a new norm for many Australians. According to a report from Roy Morgan Research, there was a significant increase in individuals opting for door-to-door meal delivery. While this trend was a necessity during lockdowns, there is now a concern that these habits may persist even post-COVID.
This behavioral shift presents a $1 billion revenue opportunity for the pub industry, as it strives to bring people back out with friends and family, thereby bolstering social cohesion. A recent study by the Australian National University (ANU) in collaboration with the Scanlon Foundation Research Institute revealed a growing number of people who are struggling or perceive themselves as “just getting along.” Social connection, as highlighted in a Harvard study, plays a pivotal role in happiness, making pubs and bars ideal places to foster these connections.
Restoring the Balance: From Food Delivery Platforms to On-Premise
The Australian Bureau of Statistics’ data indicates that Australians have not faced such cost-of-living pressures in over two decades. With the food and beverage industry known for its pricing variances, choosing when and where to visit venues can present significant cost-saving opportunities while supporting local establishments during quieter periods.
To address these challenges and encourage patrons to return to their local pubs and bars, The Happiest Hour platform offers a range of strategies:
1. Food and Drink Combo Offers: The platform has observed a growing demand for meal and drink combinations in the $20-$30 price range.
Joonas says: “One macro trend we’ve seen on our platform is increased demand for a meal and wine/beer in the $20-30 price range. The hypothesis here is that for someone to order food delivery and have a glass of wine at home, the cost is typically $20-30 per person, so if a venue can offer something at the same price point it’s enough to get people off the couch and into a venue with a mate. Adding a drink to the offer also gives the venue better control over the overall margin of the offer.”
2. Cocktail Happy Hours:
Joonas says: “Historically, cocktails were the 3rd most searched drink item on our platform, but as of June 2023 cocktails are not only the #1 most searched drink happy hour, but the number 1 most searched offer of any sort. When we speak with our users, the general consensus is that $12 cocktails are considered great value. Furthermore, users are accepting of cocktail happy hours where only a select few cocktails are on happy hour, meaning venues can specify the cocktails that work best for them in terms of margin and time to make them.”
3. TikTok Micro-Influencers: TikTok influencers within the hospitality industry have witnessed a significant rise in volume and effectiveness. TikTok’s search engine-like functionality allows content to remain discoverable over time. Venues targeting the 18-34 age bracket can benefit from collaborating with suitable TikTok influencers. Identifying influencers who focus on specific niches, such as cocktails, and have a local following can yield superior results.
The Happiest Hour: Paving the Way for Pub and Bar Success
The Happiest Hour platform aims to make everyone happier – both customers and venue owners – by redirecting $1 billion of revenue back into the Australian pub industry. To get discovered by potential patrons, venues are encouraged to list themselves on the platform, where the average venue receives over 100 views per month.
As the Australian pub industry embarks on this exciting journey to reclaim its vitality, The Happiest Hour stands ready to support the revival, rekindle social connections, help with the increased cost of living stress and bring joy back to communities.
Joonas concludes: “Based on the Australian Bureau of Statistics index, people across Australia have not been under as much cost-of-living pressure for over 20 years. Further to this, the food and beverage industry is legendary for high variance in pricing, meaning that knowing where and when to visit venues has a significant cost-saving opportunity, while supporting venues during quieter times.”
