Can you win in the Spanish on-trade by targeting top 50 cities?

In the on-trade, it always pays to focus on the parts of the market with the highest potential and ROI. That’s why we’ve tested the top 50 Spanish cities regarding their on-trade outlet power. And we’ve thrown in a regional overlook as well. 

Today you will discover if it’s a good idea to focus your commercial activities on the largest cities and regions, or if a broader approach is more advisable in Spain. And if you’re interested in more Spanish on-trade insights, read our major Spanish on-trade analysis available on our blog or download a condensed Spanish market report (Spanish only).‍

SPANISH ON-TRADE MARKET REPORT (2022)

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The 3 main on-trade zones & the backbone of Spanish on-trade market

First, let’s look at the Spanish regions in our Outlet Census tool. We’ve discovered 3 main on-trade clusters based on outlet density (outlet count / population). You can see them in the interactive chart below. (If the chart doesn't load, reload the page)

Hover over specific regions to see the outlet and population count.

There are 3 distinctive regional clusters. Let's have a look at them in detail.

On-trade Heavyweights

58% of Spanish on-trade outlets are located in Andalusia, Cataluňa, Comunidad Valenciana and Comunidad de Madrid With 59% of the Spanish population also concentrated there, these 4 regions are the backbone of the Spanish on-trade market and provide the best opportunities for sales, brand building and marketing.‍

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Distinctive & Noteworthy

‍Galicia, Castilla y León, Canarias, País Vasco, Illes Balears, Castilla-La Mancha, Aragón, Región de Murcia. This cluster of regions has 34% of all Spanish on-trade outlets and consists of distinctive regions like the Canary and Balearic islands, the autonomous and highly unique Basque Country (País Vasco) or less densely populated inland regions like Castile and León, Castile-La Mancha or Murcia.

This cluster provides unique opportunities but due to its size (both in terms of geography and population) is not as easy to cover as the previous one.‍

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‍Hidden Opportunities‍

Principado de Asturias, Extremadura, Cantabria, Comunidad Foral de Navarra, La Rioja, Ciudad de Melilla, Ciudad de Ceuta. Each of these regions contain less than 2% on-trade outlets and population (some of them close to 0% like the 2 exclaves of Melilla and Ceuta). To be successful here, one would have to create a perfect strategy and allocate commercial resources carefully and tactically. All of this can be done with Outlet Census in tandem with Market Meter.

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To sum up, we see that targeting just 4 out of 19 Spanish regions (Andalucia, Cataluña, Madrid and Valencia) will give you access to 57% of the Spanish on-trade outlet universe. That’s quite a concentration and a clear pivot for commercial decision making.

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Top 50 cities strategy. Worth it or not?

Next we’ve taken a glance at our Spanish cities data from the Outlet Census and found out an interesting correlation. Our initial thought was that the market would be quite concentrated in the major metropolitan areas in a similar fashion to the U.K., France or Poland (e. g. the Polish capital of Warsaw has 4,5% of Poland’s population but almost 10% of all the outlets - more insights here). But that turned out not to be the case. 

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You can see that the percentage of outlets is more or less on par with the percentage of population. By covering the 50 biggest cities (by population) you will be targeting just 36% of the overall Spanish on-trade outlet customer universe.

Full map of top 50 Spanish on-trade cities with total outlet count. To move around the map, hold SHIFT and use your mouse or touchpad cursor.

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The conclusion: Play your cards right

The Spanish market is quite concentrated when it comes to regions, but not at all on the city level. By covering just 4 regions you will be able to target 57% of the customer universe - but you have to cover the regions in their entirety. Focusing just on the biggest cities won’t get you as far. 

This is in stark contrast to e.g. Poland or the UK, where the market is much more concentrated in metropolitan areas. But on the other hand it’s very similar to Italy where the ratio for top 50 cities is even smaller (more about that in our Italian market analysis).

To succeed and become a leader on the Spanish on-trade market, one has to cover a lot of ground and cities. So don’t bet everything on just one horse, be it a distributor, a brand or outlet category. Drill one level deeper and figure out how to attack and succeed in multiple individual regions, cities and distributor segments. In Spain, this is what really pays off.

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SharpGrid is a data & tech company reinventing market research in the on-trade channel. The on-trade channel consists of POSs (points of sale) like restaurants or bars where food & beverage is bought and consumed, and is often also called HoReCa, on-premise, food service, out-of-home, gastro or immediate consumption (IC) channel, hospitality or on-licence.