Australian Pub Industry’s $1b Opportunity in 2024
The COVID-19 pandemic has undoubtedly had a profound impact on various industries, and one such sector that has been significantly hit is the Australian pub industry. The closure of pubs and restrictions on social gatherings not only impacted us as a society and our sense of community, but it took a heavy toll on publicans as businesses ceased operations, creating a deficit of $2 billion over 2022.
However, as we begin to emerge from the pandemic, a new $1 billion opportunity awaits the Australian pub industry.
According to IBISWorld Pubs, Bars and Nightclubs in Australia 2022 report, the industry’s revenue in 2022 was more than $2b lower than pre-covid, and while the industry is to return to earning, total annual revenue is forecast to be $1b below pre-Covid levels. This is as a result of behaviour change, and cost-of-living constraint.
Despite our emergence from the worst part of the pandemic, why are we so far below pre-COVID revenue levels?
Covid stay-at-home habits
Covid forced many to replace going out to venues with the ease of clicking through a home-delivered meal on a food delivery app and enjoying a meal and a glass of wine on the couch. A report from Roy Morgan Research shows the significant increase in individuals opting for door-to-door delivery of their meals.
At the time of the lockdowns, this was the necessary reality, however, the concern now is that these habits remain post-covid, and herein lies the $1B revenue opportunity for the pub industry but even more importantly the social benefit opportunity of getting people back out with friends and family.
This is not good for society, as it impacts social cohesion. The number of people who are struggling, or see themselves as ‘just getting along’ has grown in the last year according to Mapping Social Cohesion 2022 survey. Australian National University (ANU) with the Scanlon Foundation Research Institute.
In a recent Harvard Study, one of the primary drivers of happiness is social connection and what better place to create and foster these connections than over a meal or a drink at a local pub, so, getting us back into the real world with mates is good for the industry, society, and for our happiness
“It’s time to shift the $1b+ from food delivery platforms, many of which take a 30%+ platform cut, back to on-premise”
Cost of living pressures
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.
So while The Happiest Hour platform is all about empowering people to eat and drink out more often with family and friends, what specific actions can venues take?
Food and drink combo offers
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. Adding a drink to the offer also gives the venue better control over the overall margin of the offer.
Cocktail happy hours
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
TikTok micro influencers
Over the past year, TikTok influencers in the hospitality space have exploded not only in terms of their volume but also their effectiveness for venues. The unique thing about TikTok is that it’s used as a search engine so content is discoverable into perpetuity through search.
For venues with great offers, who are also targeting the 18-34 age bracket, there is clear evidence that involving “suitable” TikTok influencers in their marketing strategies is optimal. The question then is how to cut through the noise and find “suitable” TikTok influencers. There are platforms out there such as The Right Fit and Tribe, but those platforms typically take a significant platform cut so can be expensive. We’ve found the best results by finding TikTokers who focus on a specific niche (E.g. cocktails) AND have a following that is close to the venue, driving up relevance which in turn drives better results.
If you’d like to learn how micro-influencers can help your venue, email us at email@example.com and we’ll let you know if we know suitable influencers for your venue.
How The Happiest Hour fits into the $1b opportunity
With our new platform, the goal is to make everyone the Happiest – for both customers and venue owners, to shift $1b of revenue back into the industry.
The main thing for venues is to be listed on the platform so they can get discovered (the average venue gets over 100 views per month).
For venues looking to get the most out of the platform, with custom insights and advice tailored to your venue and your location, contact us at firstname.lastname@example.org
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