The global spirits industry is experiencing a fundamental recalibration, where long-held assumptions about consumer behavior, premiumization, and market dynamics are being challenged and redefined in real-time. As we move into 2026, industry leaders are grappling with a paradox: overall alcohol consumption is declining across key categories, yet spirits continue to gain value share through persistent premiumization, even as economic pressures reshape purchasing patterns in unexpected ways. These Bar Convent Berlin presentations offer essential perspectives from some of the industry’s most influential voices, revealing both the structural shifts and emerging opportunities that will define success in the year ahead.
Pernod Ricard on 2026 Spirits Trends: Why Premiumization is Here to Stay
Julien Hémard, CEO of Pernod Ricard Northern Europe, dives into the six critical questions defining the European “seepscape” in 2026. Despite economic shifts, Hémard argues that premiumization is a permanent fixture of the industry, driven by a “drink less, but drink better” consumer mindset. Discover why beer and wine consumption are down 40%, but spirits value is climbing, and learn why the over-60s demographic is the most undervalued opportunity in beverage alcohol today.
The Key Trends in the 2026 Alcohol Market
Giuseppe Gallo, Founder and CEO of Italspirits, shares a masterclass on navigating the “bumpy” but opportunity-rich landscape of the 2026 alcohol market. From the massive category switch from high-proof Gin to the low-ABV Spritz, to the rise of Asian-inspired umami and matcha flavor profiles, Gallo provides a data-driven look at what the new generation of drinkers is searching for in this alcohol market. Learn about the challenges of portfolio rationalization in the U.S. distribution tier, why sustainability must move beyond a “PR angle” to be a core brand value, and why the M&A strategies of major beverage giants have completely shifted in the last 24 months.
The $40 Billion Market: Strategic Insights for U.S. Spirits in 2026
The U.S. spirits market is an enormous $40 billion opportunity, but success in 2026 requires more than just adapting a European approach. Emmett Strack, Manager of Content and Marketing at Park Street, provides an insider’s look at the American landscape. Learn how female consumers (21-34) are fundamentally reshaping dynamics, why the RTD revolution is on track to hit $2.1 billion by 2030, and why states like Nevada and New Hampshire outpace giants like California.
5 Opportunities in the Shifting Global Alcohol Market
Is the global alcohol market facing a structural or cyclical crisis in the alcohol industry? At Bar Convent Berlin, Spiros Malandrakis, Global Head of Insights at Euromonitor International, argued that it’s a “cocktail of both.” Spiros explores the five qualitative trends defining the landscape. Discover why polarization is replacing traditional premiumization, how consumers are “trading across” categories to maintain quality on a budget, and why domestic specialties are winning through emotional resonance.
Pernod Ricard on 2026 Spirits Trends: Why Premiumization is Here to Stay Transcript
Julien Hémard (0:03)
I’ve been at Pernod Ricard for 30 years — 25 of them around the world, in Asia Pacific and the US, and the last five back in Europe. So I’m going to focus on European trends. I’m going to talk to you about navigating not the landscape, but as we call it at Pernod, the “trendscape” of industry trends — and I’ll do that through six questions. Let’s see how you do with these six questions.
Julien Hémard (0:38)
First: who thinks premiumization is going to disappear? Raise your hand. … Ha, ha, ha — nobody! Everyone believes in premiumization, and you’re right — that’s what we believe too. Over the last 10 years, premium has grown faster than every other category, and we think it’s going to stay that way.
One important thing about premiumization: right now, some people still say, “Come on, Julien, the industry is down, people have no money — why do you want us to invest in expensive products?” It’s exactly the same thing people told us in 2009, during the global financial crisis. People said premium was dead. For two or three years, standard products went off the shelf — and then premium quickly came back. Why? Because it’s much better to drink high-quality, cool brands, and when you have the money, you really want to enjoy yourself with that. So we know it’s going to carry on.
Julien Hémard (1:57)
Next question: what has decreased by more than 40% over the last 40 years? Any idea? … Beer consumption in Germany — down over 40%. For the French, wine consumption is down 40% since the late ’80s. It’s crazy.
But you know what? It’s even better for premiumization — people drink less, but they drink better. This is going to continue, hopefully not at the same rate, but that’s a good thing. We embrace moderation — that’s something very important in Europe.
Julien Hémard (2:460
Next question: how many new spirits SKUs have launched in the last 12 months in Germany? Any idea? Give me a number. … 100? 300? … 479 — and this is according to Nielsen, which mostly covers off-trade. I think it could even be double that — around 800 new SKUs just in the last 12 months. That’s a lot. It means more fragmentation, more intense competition, and a lack of differentiation. There are still quite a lot of copycat “me-toos,” but it’s also great, because it shows the dynamism of this great industry.
Now, a little quiz for my friend Emmett — how many new spirits SKUs in the last 12 months in the US? … He said 600. According to the Tobacco Tax and Trade Bureau — the official registration body in the US — it’s 22,000. 22,000 new SKUs in spirits, just in the US. That’s scale — that’s what we’re talking about when we say scale. But if you take the whole of Europe, I’d say it’s probably around 10,000 as well. So, very dynamic industry. Fabulous.
Julien Hémard (4:33)
Next question: which brand is the most successful at creating experiences? … The first brand that comes to mind — Absolut? Yeah, but she works at Pernod, so it doesn’t count. I mean, people think, okay, Red Bull. Yeah, Red Bull — they basically invented bringing brand experiences to the masses and created a phenomenal trend.
For spirits brands, it’s a bit more difficult in some markets because of regulation, but in a lot of markets it’s still super important. I’ll give you one example — Ricard, in France, a super traditional brand. About 25 years ago, they had a problem: they weren’t able to recruit new drinkers. So they created live concerts all around France — the biggest French singers and stars on the biggest stages — and suddenly they started recruiting hundreds of thousands of new consumers. Brand experiences can make a huge difference. It’s not just about what’s in the glass — it’s the moment you create, and what people remember.
Julien Hémard (5:59)
I love this next question: what is the most undervalued consumer group? … Older people — over 60. She’s right. I don’t know why no one in our industry has really gone after this group. They have more money than any other generation, their numbers are going to double over the next 20 years, and it’s their “end of life” — so what do they want to do? Make the most of it. Enjoy. So think about that.
Okay, last question: what will set you apart for success in Europe? It’s not easy, because unlike the US — where, as Emmett showed, you have scale, and you can launch in one state and quickly go everywhere — in Europe, you start in one country, then you need another, then another, and each has totally different regulations. The distributors in Europe are completely fragmented. It’s not that easy.
But I’ll give you three tips. Number one: know your market, and know your target. Not every place in Europe is the same — we love our wine in France, we love our beer in Germany. Every place is different. Know your market, and know your target — think about the older generation versus the younger one, and be very, very targeted.
Number two: experiences. If you create that magic, that moment, that memory, then people will come back to your brand. That’s something people like Giuseppe — who you’ll hear from next — do beautifully, because that memory creation also comes through how you drink something, how you present it: the glass, the garnish, the cocktail, the signature. Every detail counts and matters — but he’s going to talk about that in a minute.
And last but not least — and you’ll all agree with me, so I’ll just repeat it — don’t forget to premiumize, because that’s what’s working for spirits in Europe. Thank you very much.
The Key Trends in the 2026 Alcohol Market Transcript
Giuseppe Gallo (0:03)
I’m a former bartender, as you can hear from my accent — I’m originally from Italy, but I’ve been working and living in London, UK for the last 20 years. I’m the co-founder of Italicus Spirits, a small spirits group we launched over the last 10 years with two small brands. One is Italicus Rosolio di Bergamotto, and the other is a Savoia wine aperitivo, in red and orange versions.
So what I’ll try to touch on today, in 10 minutes, is what we’re seeing in terms of trends and what we’re seeing in the market right now. We’re available in 47 markets across the world, so we’re dealing every day with these kinds of modern challenges, I like to say. The US is our number one market, and then European markets — Germany, France, UK, Italy — are our biggest, alongside Hong Kong, Japan, and Australia. So as producers and brand owners, what do we need to navigate through this — how can I say — bumpy time?
Giuseppe Gallo (0:43)
First of all, a category shift — I like to call it “from gin to spritz.” We’re all aware of the great growth the gin category has had in Europe and across the world over the last 10 to 15 years. I can’t even remember how many new gin brands have launched in that time — it’s been growing pretty steadily and is still pretty strong, mainly in the premium and super-premium segments.
But we also see a new trend post-COVID. Has anybody heard about the Spritz cocktail recently? Right — very much owned by one single brand, correct, but you can see more players coming into the spritz occasion now.
So what we see, from the inside, is a consumer trend moving from high-proof spirits — gin, gin and tonic — to the spritz, which is low-ABV, mid-proof, something a little easier. So that’s something to keep in mind if somebody wants to launch or create a new brand: consumers nowadays are looking for something a little lower, a little less in terms of ABV.
We’ve already experienced the spritz trend in Europe for probably a good three or four years now — in some countries like Germany, Italy, Switzerland, and Austria, even for 10 years. We know brands that have already become millionaires in cases because of the spritz trend, but it’s just getting started in a country like the US. As Emmett said correctly earlier on, the US is the biggest spirits business opportunity for any spirits brand in the world, alongside some other markets like Mexico, Australia, or Japan.
Giuseppe Gallo (2:40)
Then the second insight we see is “from agave to RTD.” We all saw this great agave boom over the last 10 years, especially after COVID — there was never enough tequila produced in Mexico for all the Americans who wanted to drink margaritas or mezcal. Tequila is still growing, still a very strong category, but what we saw early on is how RTDs are taking the market by storm. You see the numbers — the growth in RTD is on a different level entirely.
Now, I do have my own personal opinion, which I’d love to share. I both agree and disagree with everything my dear colleagues mentioned earlier. I do see RTDs facing more challenges in Europe than they did in the US, but with time, I’m sure they’ll overcome those challenges, because we’re missing two key occasions for RTDs here in Europe.
Which two? In America, there’s the tradition of barbecues and pool parties. For barbecues and pool parties, what do you need? You need a functional drink that still delivers a good taste profile, that you can open and drink by the pool or while you’re barbecuing. In Europe, we have a little less of that occasion — we’re still a bit more conservative or traditional, so we’re still opening a bottle of wine or beer. But definitely, with the new generation, we can see where RTDs are going to go and how fast they’ll grow.
Giuseppe Gallo (4:14)
Secondly, if we’re producers, or if you’re planning to launch your own brand, or working in a distillery — what kind of flavor profiles are we really looking for today? We’re seeing different flavor profiles compared to 10 or 15 years ago, and this is very important, because this is where Gen Z is playing a key role.
Do you know which flavor profile has been the number one search on Pinterest across the US and UK in the last 12 months? Take a guess — I knew it because I was speaking with my 15-year-old daughter, but then I also went to a conference in the US where the CEO of Pinterest USA confirmed it: the number one flavor profile searched on Pinterest in the last 12 months is matcha.
Obviously, in top-end and craft cocktail bars, we already see some matcha cocktails, but we’re a bit spoiled, because we’re looking at the top of the top. When you go a little further down the category, you don’t really see much yet. But those young people searching for matcha online today — one day they’re going to go out, order a cocktail, and guess what they’ll be looking for? A matcha-forward cocktail. That trend is probably going to arrive around 2028 to 2030. We don’t know exactly, but it’s definitely coming.
Another flavor we’ve seen booming is citrus. Let me give you a bit of personal experience — in 2016, when I decided to launch Italicus Rosolio di Bergamotto, nobody even knew what bergamot was, nobody knew what rosolio was. It was a super-premium aperitivo back then, and apparently there were only one or two others, and they were all entry-level. When I went to give my first pitch to get investment for the brand, I remember this top executive looked at me after seven minutes and said, with his hands, “I think this is a kamikaze project — forget about it.”
Well, I can tell you, eight years later, with over three million bottles produced for foreign markets, it really was worth it. But that’s because I consciously took a risk almost 10 years ago to launch something that didn’t exist in the market yet. So try to find your own opportunity in the market — wherever there’s a challenge, there’s also an opportunity.
Of course, we also have savory-style cocktails, and umami is the flavor that’s really taking over. If you go to top-end cocktail bars, restaurants, or patisseries in New York, Tokyo, London, or Berlin, you’ll see umami showing up more and more. Remember what I mentioned earlier — everybody’s eating more Asian-style food now. Some people in big metropolitan cities like New York or London eat sushi at least twice, if not three times, a week, so they’re getting more accustomed to soy sauce, which is one of the quintessential umami flavors. If you stop by our stand here, we’ll give you a little taste with some parmesan and umami flavor.
Giuseppe Gallo (7:21)
What’s also very important is brand experience — I like to say “experience is the new advocacy.” We touched on something similar earlier with Julian — we need to give more value to the consumer through the brand we’re presenting. So we’re seeing high-concept, minimalist activations for brands, and more elaborate cocktails with complex flavor profiles.
Then, something that’s going to keep growing is plant-based and wellness. We need to make sure our brands and products provide that value too. For example, in our portfolio, all our products are 100% natural and vegan-certified. Today, that might be seen as a bit of a PR angle, but I think over the next 5 to 10 years it’s going to become very, very important.
Also important is your supply chain — you’ve got to be a sustainable brand. We’re all trying to do a bit more for the planet, but how do we translate that into communication, and what do we actually do with our brands that we can communicate? That’s what the new generation is looking for.
And of course, there’s something I’m completely unfamiliar with, because I’m too old — I consider myself a boomer now, even though I’m only 45 — and that’s AI. You can see how AI is changing our world, changing our daily routines. Remember when the iPhone came out? It changed our lives within a year. So I’m sure that by next year, when we’re all here again, AI will already be at the next level.
Giuseppe Gallo (9:00)
And then there’s portfolio rationalization — distribution to drive return on investment. This is one of the biggest challenges, and I can tell you from personal experience: when you’re a small brand and you don’t have the millions, let alone billions, of dollars to invest with a big distributor, especially in the US, your voice doesn’t really count.
On top of that, because of inflation, distributors are under much more pressure in terms of economics and P&L. So they’re hiring less staff, sometimes laying staff off — production costs more, fuel costs more, logistics cost more. So everybody is focusing on a smaller number of brands where they want to dedicate most of their effort, and most companies are focusing on the brands that already have brand awareness — the ones already well known by consumers — and somewhat neglecting innovation and new flavor profiles for the moment.
But this is cyclical — it comes and it goes. What’s important for a small brand, a small player, or someone in a bit of a hybrid position, is to be resilient: stick to it, believe in your vision, and try to bring more value to the category, not just more quantity. That’s what we try to do in our small world.
Last but not least, M&A. A lot of people ask me about starting their own brand or product and then perhaps getting one of the big players to invest or buy them out one day. Well, the M&A strategy of the big groups has almost completely changed in the last 12 to 24 months. Did you hear about what happened with Distill Ventures and Aviation Gin? Aviation was completely sold off by Distill Ventures, which was one of the first incubators set up to support small brands. Did you hear that Pernod Ricard sold their entire wine portfolio to focus more on spirits? Did you hear that Campari sold off Cinzano vermouth two or three months ago?
So you can see how the big players have gone from acquisitions to actually divesting brands right now. So if you’re planning to launch your own brand and you think one of the big players is going to come and acquire you in the next two or three years — well, I’d recommend doing a bit more research first.
That’s all from me.
The $40 Billion Market: Strategic Insights for U.S. Spirits in 2026 Transcript
Emmett Strack (0:03)
My name is Emmett Strack. I’m here on the team with Park Street, primarily helping oversee Park Street University — let’s see, that’s me right there.
If you don’t know us, Park Street is not a traditional data company. We’re a technology-driven importer and distributor working with thousands of brands across the US and Europe, helping them grow and scale their businesses. As a result, we have a unique perspective on the spirits industry. So for my part today, as Andre mentioned, I’m going to give you an insider’s view of the US market.
The US represents the single largest opportunity for international spirits brands, but it’s also one of the most complex and rapidly evolving markets across the globe. Today I’ll give you a high-level overview of the US market, specifically with a view on how European brands can aim for and sell into this market successfully — including some of the high-performing categories, price tiers, and general critical insights that will help beverage professionals thrive in this market.
Emmett Strack (1:08)
Let’s start with the scale we’re talking about. The US spirits market isn’t just large — it’s enormous and still growing. Even conservative projections have the spirits category reaching about $40 billion by 2030, up from $37 billion last year, according to IWSR.
However, this hasn’t come without challenges. 2024 saw a 2.7% volume decline early in the year, largely due to post-pandemic adjustments and inflationary pressures on consumers. This decline was particularly notable in bottles over $100, which saw about a 20% volume drop. But it’s important to note this isn’t market destruction — it’s a market adjustment that holds opportunities within it.
In fact, IWSR just last week published a compelling report about how this volume drop in bottles over $100 is cyclical rather than structural, and again, this holds significant opportunities. Right now, US consumers are becoming more discerning, more quality-focused, and more willing to pay for experiences rather than just alcohol. I’ll get into how European brands with the right positioning can better align with this landscape.
Emmett Strack (2:19)
Let’s touch on some of the unique characteristics driving the US market today. Despite the slight overall volume decline I mentioned in 2024, premium spirits are driving significant value growth. Consumers are drinking less frequently, yes, but they’re spending 15 to 20% more on average per bottle. This “premiumization despite decline” trend means the market is consolidating around quality and experience.
Female consumers are also fundamentally reshaping market dynamics, as they represent the majority of new drinkers. While male spirits consumers still represent about 75% of current market share, women aged 21 to 34 drive 60% of new spirits adoption and are 40% more likely to purchase premium products.
Having a sense of geographic consumption patterns is also crucial in the US. Rather than just rolling out arbitrary national launches in the largest markets by total volume — California, Texas, New York, and Florida — strategic opportunities exist in states that lead in per-capita consumption, like New Hampshire, Washington DC, and Nevada. These markets represent about 8% of the total US population, yet account for 15% of premium spirits consumption. The 10% consumption growth forecast you’ll see there is particularly encouraging because it’s driven by structural changes — premiumization, new consumption occasions, and demographic shifts — rather than just temporary trends.
Emmett Strack (3:47)
Let’s talk about some of the challenges the US has seen in 2024 and 2025, because when viewed in the right context, they can actually be opportunities for spirits brands.
Inflation isn’t just raising costs — it’s accelerating premiumization, as consumers become more quality-focused and more selective about their purchasing decisions. Leftover supply chain disruptions from COVID, combined with new tariff policies, are favoring brands that are agile and have diversified sourcing, which can create competitive advantages. The market saturation we’re seeing in some categories is forcing genuine innovation rather than typical line extensions — we’re starting to see more cross-category collaborations and adapted aging techniques, which is really pushing the boundaries of innovation. And volume declines in premium products over $100 are creating opportunities for brands in the $30 to $60 sweet spot — premium enough to command margins, but accessible enough to drive volume.
The key is to view these headwinds as clearing out weaker players and creating space for brands with real value propositions.
Emmett Strack (4:59)
From a category perspective, the US market has some clear winners. American whiskey has always been a defining segment within premium spirits culture and currently holds an 11% market share. Tequila, of course, has seen massive growth in the US over the last 5 to 10 years, though that growth has started to slow — it’s reaching about a 1% growth rate now — but it’s still the largest spirits category by revenue in US bars.
A big theme of today’s seminar — and something the next speakers will touch on a bit later — is the RTD revolution, which in the US is particularly dramatic. We’re talking about a category that’s projected to grow from about $900 million in 2024 to potentially $2.1 billion by 2030. What’s uniquely American about the RTD segment is the dominance of malt-based products, at an 82.5% share — whereas in Europe, you’re probably more used to spirits-based RTDs claiming much of the share. That said, so much of the growth we’re seeing in the RTD category right now is centered around these spirits-based alternatives.
The 12% category growth forecast through 2027 makes RTDs one of the most compelling opportunities right now for European brands looking to enter the US market in a format that’s really resonating with US drinkers. But be sure to incorporate the right flavor profiles — US consumers have leaned toward profiles built around citrus, tropical fruit, spicy flavors, and botanical combinations.
I also want to touch on US channel performance, because we’ve seen shifting dynamics that have permanently altered how spirits are sold ever since the COVID pandemic set in back in 2020. The strength of off-premise sales in the US right now isn’t just pandemic-driven anymore — it’s structural, largely because many Americans are socializing differently and have invested in at-home bar setups.
One channel to really keep an eye on is convenience stores, or “C-stores,” where growth has been particularly interesting. It represents an inclination toward convenience but also impulse purchasing, and in the US we’re starting to see the time between initial purchase and consumption shrink — verified by our friends at Nielsen IQ. This makes it the perfect opportunity for categories like RTDs and single-serve formats, and we’re starting to see traditional spirits venture into this space as well.
On-premise recovery varies dramatically by region. Urban markets like San Francisco and New York have seen a strong cocktail culture recovery post-pandemic, while suburban markets remain much more off-premise focused. This propensity to go out for cocktails is particularly strong right now among US millennials, whose financial circumstances have started to improve of late. Cocktails currently account for about 34% of total spirits value in US bars and restaurants, consistently chosen for their variety, taste, and social appeal — which really demonstrates the major impact cocktail culture has on consumption and purchasing habits.
E-commerce has become par for the course in many brands’ route-to-market strategies, but direct-to-consumer regulations vary dramatically by state — some allow direct-to-consumer shipping, while others require more complex legal steps. Keep in mind that successful US market entry requires channel strategies that are targeted based on your positioning but remain local in execution.
Emmett Strack (8:30)
Shifting into consumer behavior — there are some distinct patterns we’re seeing here. The “quality over quantity” shift is particularly pronounced among younger consumers, who have never been less attached to the high-volume drinking occasions we’ve seen in the past. At-home premium consumption, as I mentioned, isn’t just pandemic-driven anymore — consumers are consistently seeking out and upgrading their at-home drinking, and cocktail culture in the US is firmly established, which creates opportunities for spirits that work well in cocktails.
Many of you will already have this in mind, but be sure social media is a crucial part of your strategy — US consumers research brands online before purchasing, and research on-premise menus before they even visit bars, so it’s essential to consider as you develop your strategy. The influence of young women, who represent the majority of new drinkers, is changing everything from the flavor profiles brands choose to engage with, to the marketing and packaging messages they roll out. Park Street works with many brands that have seen great success marketing to female consumers, and your approach needs to be tailored to female consumers, not just traditional male spirits consumers. And of course, experience-focused consumption means Americans want brands that give them something to talk about and share — especially with the Gen Z demographic we’re seeing.
Finally, I want to close with a few key insights that should drive your US market strategy if you’re thinking about coming over.
First, the US market size absolutely justifies dedicated US strategies rather than simply adapting European approaches, because the US represents opportunities that don’t exist anywhere else at this scale. Keep in mind that three-tier system mastery isn’t just a matter of compliance — it’s actually your competitive route-to-market advantage. So be sure to understand this and work with distributor partners that are right for your brand and its positioning.
The RTD opportunity is particularly compelling for European brands, because it lets you leverage the quality and production expertise many of you already have in the US’s fastest-growing category. Premium positioning aligns very well with European brand strengths — however, I cannot stress enough that cultural translation is essential. Your European heritage is an asset, but it needs to be translated in ways that create value for US consumers.
Most importantly, competing in the US market requires thinking like a US market player, not like a brand simply expanding internationally. The brands that understand the US as a unique market — with its own dynamics, consumer pull factors, and success factors — are going to capture share and value in the largest spirits market in the world.
5 Opportunities in the Shifting Global Alcohol Market Transcript
Spiros Malandrakis (0:03)
I’ve been doing this for about 20 years. I’ve had the chance and opportunity to speak at this conference a couple of times in the past, and I hope to do so many more times in the future. Any questions that come up, you’re welcome to ask them at the end. Even when some of my points appear to be more doom and gloom, I always try to find the opportunity within the darkness sometimes — and I think that’s something the alcohol industry has always been very good at doing. So, let’s begin.
I wanted to highlight five key qualitative trends as I perceive them. The first one — and I think this is at the core of all the discussions I’ve been having with the alcohol industry over the last year or two, regardless of whether they’re in spirits, wine, RTDs, or beer — is this dual question: are we facing a state of polycrisis?
Spiros Malandrakis (0:59)
Polycrisis — meaning, I’m Greek, so I cheat with words that sound complicated; it’s always easier for me — but just to explain it, a polycrisis is the combination of different crises coming together. A permacrisis is a permanent state of crisis, the idea that this is going to be with us for the foreseeable future, and that we should pragmatically not be scared by the challenge but actually acknowledge it.
Is the crisis the industry is facing structural or cyclical? My proposition is that it’s actually a cocktail of both. The cyclical part most of the time refers to macroeconomic pressures. Normally, “cyclical” means these economic pressures last for one or two years — maybe six months, maybe three years at the worst-case scenario — and then the cyclical transition happens, and people are back in a much better economic situation. I propose that we need to consider the cyclicality argument on much longer timelines. I’m not saying it’s going to be like that forever, but I also don’t believe these cyclical macroeconomic pressures are going to magically disappear within the next six months or a year.
I think we need to acknowledge the situation — looking at macroeconomic indicators around the world, unemployment rates ticking slowly back up, inflation not actually being fully under control. Even in the countries where it went down, we’re seeing the first signs of it ticking back up because of tariffs and the geopolitical issues I mentioned earlier. That brings us to a situation that will continue being challenging. And again, “challenging” does not mean giving up. But I always believe that pragmatically facing reality is better than hoping for the best and not preparing for it.
I have an example here — and it’s not coming from the spirits industry that we all love and cherish, but from a brand that’s been around for centuries. It’s not new, and it’s not capturing some brand-new, unique trend. I mean, they do have non-alcoholic versions, of course, but ultimately they’re doubling down on craftsmanship, tradition, and embracing new social media and the new generation. I think the latest Netflix series will most likely provide some additional boost — it always does — but that’s the point: it doesn’t even have to be an entirely new brand.
In this case, this is a brand that’s skyrocketing in sales against a backdrop of a UK market that’s doing particularly badly. As was mentioned earlier, the beer industry overall has lost a lot of sales — but even within a massively declining beer industry, opportunities are still there. So I want to highlight: yes, I acknowledge the dark clouds on the horizon, and the fact that we’re currently, in my mind, in the eye of the storm. But even within the storm, opportunities are still there, and they don’t even have to come from new brands, if done correctly.
Spiros Malandrakis (4:11)
The second trend — again, this is about capturing the zeitgeist, capturing underlying cultural and political trends that are sometimes more difficult to see. In this case, we see a transition in many countries toward a more inward political focus — in terms of tariffs, trade wars, boycotts — and I think we’ll see a shift toward domestic specialties.
This is also something we saw during the 2007–2009 crisis — for example, cachaça in Brazil, tsipouro in Greece, soju in Korea, baijiu in China. Local specialties have the advantage of being a little more affordable, because they can sidestep trade and tariff barriers and embargoes. But more importantly, they provide nostalgia and emotional resonance — people look to the past through the rose-tinted glasses of yesteryear, and domestic specialties and brands can provide that unique perspective.
So what exactly does premiumization mean now? Historically, premiumization meant a small group of international super-premium or premium brands controlling the narrative. I think the new premiumization will also have to do with local specialties that highlight their unique, authentic credentials. I also think it will increasingly move toward a concept closer to polarization — meaning some consumers will continue moving toward premium, but some won’t be able to do that all the time. Some consumers will be forced to trade down, or to trade across — and that’s another concept I think we need to start considering.
Trading across means, for example, if I’m consuming a super-premium whiskey and that month — or the last couple of months — has been particularly difficult for me, maybe I don’t want to trade down, because that feels bad, and I still want to drink better, just less. Maybe then I can transition to a premium rum. A premium rum is still aspirational — it’s still premiumization, but at a much more affordable price point. That would be trading across, not trading up. So there are different ways of reconsidering what premiumization means in these very troubled waters we’re in right now.
Spiros Malandrakis (6:56)
And I expect us to continue seeing downsizing — that’s another detail I’ve seen across a couple of different markets and brands: essentially, going smaller. I’ve started seeing it in beer brands, in some spirits, and even in some of the leading cocktail bars and mixology venues in big metropolitan centers like New York, London, and Berlin — essentially small shooters, like a mini cocktail. This allows the premiumization and sophistication to come through, while also being much more moderate in alcohol content and, by definition, much more affordable.
I have an example here — the very latest from Patrón. Patrón, super-premium, one of the iconic pioneers of the tequila premiumization trend, has acknowledged that people want to drink less but better. They’re trying to make it a little easier for consumers to have this impulse indulgence and treat themselves during the economic crisis we’ll continue to be in. So it’s still super-premium, but in a very small bottle — allowing younger Gen Z consumers to carry it in their pocket when they go out to festivals, or use it as a gifting option. So, in a category like tequila that’s losing some momentum, this allows more consumers to continue finding these premium options much more affordable.
Spiros Malandrakis (8:20)
And of course, these days I rarely talk about alcohol with alcohol companies — I mostly talk about alcohol with non-alcohol companies, and I talk about non-alcoholic products with alcohol companies. That’s the interesting convergence: sober curiosity, moderation, low- and no-alcohol.
Does everyone here know what zebra striping is? I can see lots of heads nodding — it’s probably what we all need today, after yesterday. Zebra striping is the idea of alternating between an alcoholic and a non-alcoholic drink, so you moderate your consumption. You can see the lines here — lager versus non-alcoholic lager, one consistently sitting under the 0% growth line, flirting with growth and then losing it, while non-alcoholic consistently outperforms. It’s similar, or even more pronounced, when we look at spirits versus non-alcoholic spirits, RTDs, or all categories.
This will continue being with us. As I said, I was among the first to talk about this trend a long time ago, and I continue following it. I think the next stage of its evolution won’t just be about taking ethanol out of the equation — it’ll be about adding functionality. It won’t be enough for consumers to simply stop drinking alcohol; they’ll need to replace it with something that does something for them — either energizing them (I’ve already seen brands doing that), helping them get to sleep at night, or providing focus. Something that adds value to the proposition beyond just “take alcohol out of the equation.”
I have an example here from a curiously experimental brand — that’s how I’d call it. The tagline is: “It’s not a beer, it’s a boost.” I think that kind of tagline will open the door to many different occasions beyond the classic “let’s go to the pub” occasion.
Spiros Malandrakis (10:18)
And of course, RTDs — everyone talks about RTDs. As I said earlier, they always encapsulate the current zeitgeist. I think spirit-based RTDs will be the ones leading the race for the next four or five years — but we need to be pragmatic, because they never last that long. I actually went back historically to the ’80s, when all of this began with wine coolers in California, if anyone’s familiar with them. The cycles there are almost always perfectly four to six years, from massive growth until the inevitable collapse, and then a new cycle comes a couple of years down the line.
The current wave in the US is perfectly positioned and named — led by Surfside, again mostly spirit-based, with natural ingredients and natural juices. Many of them are in cans — I think too many are in cans; we should start exploring glass options. They can occupy premium positions for their size, but ultimately be much more affordable, and potentially resolve the question of what to do if you can’t afford to go to the on-trade. So they’re answering the affordability question and an affordable-premiumization answer at the same time.
So yes, there are opportunities amidst the gloom. No- and low-alcohol can be a challenge for people drinking less, but it can also be an opportunity. We have to think about the post-premiumization world — that doesn’t mean no premiumization, but it does mean a different perspective on what exactly that means. The on-trade, as everyone before me has also mentioned, has to be experiential to get people out and involved. And as globalization shifts, the focus will move toward local markets and specialties.
And with that, thank you — I hope you found it interesting.
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