Trends and categories without consumer demand can’t survive, and with the younger cohorts now outnumbering the older cohorts in the US, consumer buying habits are shifting.
As a result, the beverage alcohol industry is in the process of adapting to meet the current consumer needs, according to drinks analysis firm IWSR. Some of the key industry evolutions IWSR sees going forward include: innovation in RTD products, e-commerce, simplification of wine offerings, and continued transparency.
“With millennial LDA drinkers shifting the dynamics of wine, more accessible packaging and brand messaging, as well as closer alignment with current consumer trends, such as health and wellness, moderation, and sustainability cues, will drive category relevance,” per IWSR.
Further reading: IWSR
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The US no- and low-alcohol segment is growing strong, increasing in volume by 30% in 2020, according to a new report from IWSR. Broadly speaking, no-alcohol products are more popular than low-alcohol products, but new low-alcohol products like spirits and RTDs are on the rise.
Additionally, IWSR maintains nearly 60% of consumers drink both full-strength and no/low-alcohol products on the same occasion preferring moderation over complete abstinence. “Brand owners will have an important role to play in the future development of no- and low alcohol, as increasing the breadth of products available to consumers and their price points will support category growth and broaden its appeal,” says Mark Meek, CEO of IWSR Drinks Market Analysis.
Further reading: IWSR
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E-commerce has been a lifeline for some independent brand owners during the COVID-19 pandemic. Troop Beverage, a ready-to-drink (RTD) canned cocktail brand launched in October 2020, is one of the companies that has found early success with the channel.
“I think today’s brands have to meet consumers where they are. The fact is, now more than ever–but really for the last decade plus–consumers are shopping online,” says Troop Beverage co-founder Reed DesRosiers. “So having an omni-channel strategy is not a nice-to-have thing, it’s a must have.”
Small businesses are often up against the most powerful brands in the world that have bottomless budgets for marketing, but DesRosiers believes the advantage his company has with e-commerce is a depth of knowledge for a very specific subset of consumers. This allows them to build a community of loyal followers.
DesRosiers has a few key suggestions to any brand that is interested in giving their customers an online experience:
Make the customer experience as seamless as possible. Ensure the different pages on the website flow so that the customers are not drawn away by the formatting.
Take on multi-level marketing projects that bring more consumers onto the website. The more eyes on the product, the more purchases.
Develop loyal online customers by offering incentives. For example, Troop Beverage builds shipping into their costs so that they can offer free shipping and maintain the customer through payment rather than abandoning the purchase due to high shipping costs.
Hear more from Reed DesRosiers at www.parkstreetuniversity.com
It’s been an unpredictable year and the holiday season will likely be no different, but that’s never stopped anyone from making predictions. In this case, Drizly’s Bev Alc Insights division spoke to retailers, wholesalers, and brand leaders about what they’re expecting this holiday season.
They found the shift to online shopping is expected to continue for the holidays, as well as the rise of categories like ready-to-drink (RTD) cocktails and Tequila. Social and corporate events will continue to be small or virtual. With consumers unable to travel or dine out as frequently there, is some expectation that they may splurge on more expensive brands. Additionally, many retailers note gift sets are in high demand this season.
Seven out of ten households this year are planning a Thanksgiving gathering with less than six people, according to the latest Nielsen data. Those planning to serve alcohol at their gatherings are down slightly in each category with 37% planning to serve wine compared to 39% last year, 24% planning to serve beer compared to 28% last year, and 19% planning to serve spirits compared to 20% last year. Nearly 25% of consumers plan to spend $25 or less on alcohol this year and 25% of consumers will do their holiday shopping online this year compared to 10% last year.
Spirits Lead The Way As Alcohol Dollars Grow 17.6% in September, October
Off-premise alcohol dollars grew by 17.6% in September and October compared to the same time last year, according to the latest Nielsen report. Spirits led category growth, up 26.3%, followed by wine at 18.9% and beer/FMBs/cider at 13.9%.
Throughout most of the pandemic, the spirit categories driving most of the growth have been consistent. Tequila was up 55.5%, Cognac up 56.2%, and RTD cocktails up 131% for September and October. Hard seltzer was also up 103% and continues to drive growth in the beer/FMB/cider category.
