Shifting taste preferences from beer to hard liquor, growing health concerns leading to the rise of low-calorie and alcohol-free beer, premiumization, and cannabis-infused beverages are some of the top trends affecting the alcoholic beverage market this year. Read on to find out how consumer evolution and new technology is affecting the industry.
In 2012, there were just eight craft breweries in New York City. Now, there are 41 breweries, according to the New York Post - a 413% increase in craft breweries. This trend is repeated nationwide - the number of breweries increased by 16% even though the beer market in the U.S. saw a 1% decline, reported Fast Company.
This is the case even despite the legal challenges (only five states in the U.S. permit direct shipping of spirits to consumer) and the last-mile hurdles (verifying that the consumer is old enough to take delivery of the product). The consistent growth of Drizly, an alcohol delivery service, played a large part in the growth of online alcohol delivery revenue. Drizly revenue grew by an impressive 61.8 percent in 2017, according to Slice Intelligence. Drizly recently announced it is in more than 100 North American markets, entering more than 40 of them last year.
Multiple studies show that Millennials drink less alcohol than any other generation, and are more like to get high on cannabis. Craft Brewing Business reported that the global commercial cannabis market is predicted to grow to $31.4 billion in 2021. Alcohol sales will continue to take a hit, and many alcohol companies are already trying to win Millennials and meet them where they are.
Beers containing hemp extract already exist in states where pot is recreationally legal, and pot-laced non-alcoholic beverages are pouring into markets where cannabis has been legalized. According to the Wall Street Journal, Corona brewer Constellation Brands Inc. is investing nearly $200 million into a Canadian marijuana growing company, with plans to develop cannabis-infused drinks.
Along with craft beers, hard alcohol and premium beers like Michelob Ultra are experiencing a rise in popularity even though overall alcohol consumption in terms of volume is on the decline. According to Forbes, consumption of the Buds, Millers and Coors of the world slipped to 49.59% of the market, a two-point decline that showed up directly as an increase to craft share (35.9%).
BusinessLIVE reported that in the 18- to 35-year-old segment, influencer marketing is still effective. Kuhle Belu, consumer insights manager at Pernod Ricard, the company behind brands such as Jameson, Absolut and Chivas Regal, said that the company makes use of macro- and micro-influencers, and both are very effective in the right context.
Founder of The Gin Box, SA’s first subscription club for craft gin lovers, Jean Buckman, says men have embraced the craft gin revolution as much as women have. “It would be wrong to categorise gin as a typically female beverage,” she says. “We have as many male as female subscribers, and both genders interact with the brand via social media.”
One of the fastest-growing craft gin brands, Napue Gin, brewed by the Finnish Kyro Distillery Company, has grown from producing 500 bottles a month before 2015 to more than 600,000 bottles a month in 2017, representing a whopping 1200% increase in less than three years.
Marketing for alcoholic beverages needs to become increasingly gender-neutral. Women around the world, especially in emerging markets, are continuing to grow in financial stature and make the bulk of household purchasing decisions (including alcohol). Men are increasingly switching to gender-neutral drinks, a choice that could be attributed to the influence of women, and alcohol brands showing the strongest growth are those consumed by women, according to Kuhle Belu, consumer insights manager at Pernod Ricard.
The UK’s Office of National Statistics revealed that in 2017, global alcohol consumption fell for the first time this century. According to AB InBev, 31% of Brits have now tried alcohol-free beer, and 18% of Londoners now drink alcohol-free beer whenever they go out. Major supermarket chains such as Tesco have rolled out larger NOLO (no alcohol / low alcohol) sections than it ha ever in the past. The demand for lower-calorie beverage options plus retailers’ decisions to bring more visibility to the category will accelerate growth for the NOLO category as a whole.
New brands like Mighty Squirrel, Sassy, St Peter's Without, Curious Elixirs have already launched non- or low-alcoholic drinks with success, while Carlsberg has launched its organic, gluten-free, and vegan craft beer, Celia Organic.
Chat bots have been popping up in almost every consumer-facing industry, and now they’ve reached the alcohol industry. The Spoon reported that United Spirits Limited (USL), a Diageo Group Company, introduced in 2017 a Facebook Messenger chat bot called Simi - Your Personal Bartender.
Simi has a cocktail recipe catalogue of over 2,000 recipes featuring Diageo’s brands such as Johnnie Walker Whisky, Smirnoff Vodka, Tanqueray Gin, and Captain Morgan. With use, the chatbot will gain intelligence and offer cocktail recipes based on alcohol and ingredient preference. Facebook also reported that Absolut drove a 4.7 times sales lift using a bot for Messenger that offered people a complimentary drink at a local bar.
Clean, minimalist design, sleek sans serif typefaces, and bright, bold colors dominate packaging labels for new launches. The feel of such packaging is intended to evoke a feeling of newness and experimentation for a generation that appreciates “living in the moment” over tradition. Brands like Biles Hendry, Finest Roots, Napue Gin, and AND UNION are such brands designed specifically with this aesthetic in mind.
In the U.S., alcohol brands can only advertise on online platforms where 71.6% of the audience is reasonably expected to be of the legal purchase age. Meanwhile, Finland not only regulates digital advertising of alcohol, but also holds brands responsible for user-generated content on their online properties. In Thailand, taking a selfie with a beer could land you in jail, as the government attempts to crack down on the use of influencers as a loophole to market alcohol to the masses online although via other channels such promotion is heavily regulated.
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