In the years following the pandemic, the alcohol industry went through a reset period that was felt across several industry verticals, most notably in 2023. Despite an uncertain market landscape for 2024, signs of optimism within the spirits industry are evident, according to Circana’s State of the CPG Beverage Alcohol Industry report.

Between 2019 and 2023, the average inflation rate across all food and beverage departments was 32.2%. However, liquor has experienced a much lower inflation rate than other categories, reaching only 14%.

Average Alcohol Basket Size Up in 2023

On a channel basis, there have been apparent shifts in where, when, and how beverage alcohol categories are purchased. Across all outlets, alcohol has the second-highest average spend ($79.9) for the food & beverage category, behind only Frozen Food ($87.1)

Average Alcohol Basket Sizes by Channel

  • Club Stores – $165
  • Grocery Stores – $81
  • Mass/Supercenters – $73
  • Drug stores  $33
  • Dollar stores – $31

The average dollar value of each basket increased by about $1 across nearly all off-premise retail channels in 2023. Grocery, drug store, club membership, and dollar store increased their average in-basket value per trip, while Mass/Supercenter was the only channel to decrease average basket size. At an average basket size of $165.2, club stores saw the greatest increase in basket size as consumers looked for bargains in bulk. 

However, in-store display counts for alcohol decreased in 2023 compared to other product departments. The average number of alcohol displays per store was 8.1 for the 52 weeks ending in Q3 of 2023, a loss of 0.9 displays compared to the previous year. The reduction occurred most notably in the premixed cocktails, beer, and cider categories. Circana identifies this trend as an opportunity to boost pre-shop engagement on store apps and social channels. 

E-Commerce Alcohol Sales Up 8% in 2023

Alcohol e-commerce sales rose by 16% between 2020 and 2023, reaching $977 million in 2023, eleven times greater than its 2018 sum of $85 million. The total share of beverage alcohol sales done through e-commerce is still relatively small, but it has been increasing, reaching 4.3% for the 52 weeks ending January 28th, 2024. Beverage alcohol’s e-commerce contributions to multi-channel sales outpaced every other CPG department, more than doubling the rates offered by general food and beverages.

Ready-to-Drink Reached $10.3 Billion in 2023

The rise of the ready-to-drink segment has been hard to miss, but a deeper look at the 2023 analytics reveals that preferences are shifting within the category. 

Between 2018 and 2020, the ready-to-drink category jumped $4.8 billion in value, driven mainly by hard seltzers, which grew by $3.7 billion over the same period. The hard seltzer segment peaked in 2021, reaching a total value of $5 billion. However, consumer preferences have shifted away from hard seltzers since, losing share to crossover product innovation and spirits-based RTDs. In 2023, hard seltzers fell to a value of $4.3 billion. 

Despite the shrinking of the hard seltzer segment, the overall RTD category has grown yearly since 2018, reaching $10.3 billion in value in 2023. This growth has, however, softened in the last couple of years. The $1.1 billion in value added to the ready-to-drink category in one year between 2020 and 2021 has turned into just $1 billion in the last two years between 2021 and 2023. 

Beverage brands and companies not traditionally linked with beverage alcohol have shaped many consumer sales since 2020, with many new crossover innovation products hitting the market. Coca-Cola and Monster Energy leveraged a number of their brands into crossovers with alcohol companies to introduce new products like Topo Chico Hard Seltzer and Jack Daniels & Coca-Cola. It’s a move that aligns well with current consumer preferences for various flavors and an inclination to drink across product types. The crossover product segment grew 435% between 2021 and 2023 to reach $600 million in value. 

RTD cocktails are also finding a niche with LDA Gen-Z members in the current climate. Strong sales for RTD cocktails within this segment are due to their preference for higher ABV offerings and unique packaging formats, which have applications across various occasions. 

The Top RTD Cocktail Brands Among Gen-Z Drinkers 

  1. BuzzBallz 
  2. Beatbox
  3. Liqs
  4. Crown Royal & Whiskey Cola
  5. Monaco Cocktails 
  6. Jack Daniel’s & Coca-Cola

As we move through 2024, the landscape of the alcohol industry reflects a period of adaptation and evolution following the disruptions caused by the pandemic. While challenges persist, particularly amidst an uncertain market environment, the latest insights from Circana’s State of the CPG Beverage Alcohol Industry report reveal promising signs of resilience and innovation within the spirits sector. As beverage brands continue to navigate this dynamic landscape, fueled by consumer demand for variety and convenience.

More Resources on Product Trends

How to Develop a Retail Channel Strategy

Podcast Episode: What’s in Store in 2024

More Trending Categories

Start Enhancing Your Productivity Today

Over 3,000 Alcoholic Beverage brands have experienced the benefits of partnering with us to enhance their productivity. Contact us and find out how Park Street can start helping your brand today.