5 Trends for Alcohol that will Outlive a Pandemic
Alcoholic Drinks To-Go: With restaurants and bars suffering through closures and capacity restrictions, many states and local jurisdictions passed temporary laws allowing the sale of to-go alcoholic beverages. This went beyond an unopened bottle of wine and extended through beautifully packaged cocktail kits to adult-sized pouches filled with expertly crafted mixed drinks. An open container, once only reminiscent of places like Bourbon Street, became the norm in towns across the United States. People sipping a frozen margarita while walking home with their dinner or enjoying a cold beer on the curb while queuing (6 feet from others) for a pizza. Some cities have already extended these rules indefinitely and many more have permanent law changes ready for consideration this year. Take-out food got an elevated reputation and will surely continue to be a revenue stream for restaurants going forward. So what say ye, let them have their meal and drink more too?
Low and No ABV: Alcohol sales had a record-breaking 2020. The boom of seltzers and canned wine and cocktails likely hasn’t peaked yet. However, the category to watch now is Low and No ABV (aka Non-Alcoholic Spirits aka Dry Drinks aka Zero-Alcohol). Whether it was the convenience of working from home or facing our mortality during a global pandemic, there’s no question that people became more conscious of health choices. Bicycles sold out, running shoes were used for actual running and Peloton became a household name. People dabbled with Keto and Mediterranean diets, and naturally considered their alcohol consumption too. Some are “sober curious”, some practice only a dry month, but millions are seeking alternatives to their night cap or frequent happy hour beverages. Whether consumers are just balancing their diet or fully on the wagon, the market for these products will grow.
E-Commerce: If we learned anything commercially in 2020 it’s that everything can be delivered. The increase of e-commerce and DtC sales for wineries, breweries, distilleries and retailers will go on. In fact, if you didn’t develop an online strategy yet, please do so now. Laws will be slow to follow the demand, as they always seem to be in these heavily regulated industries, but I have confidence that will come too. The greatest advantage here is for the consumer. In areas where the best wine selection is at the grocery store, they now have access to a world of wine at their fingertips and on their doorsteps. Every part of the three-tier system can benefit and should.
Virtual Experiences and Tastings: Sommeliers offered online classes while wineries offered virtual tours and experiences. If you didn’t know what Zoom was on March 13th, 2020, you surely do now. Not everyone will be ready to travel right away but it’s never been easier to transport yourself, even for an hour and through a screen. Wineries, especially, can truly build experiences that rival the tasting room. Companies will continue to consider these perks for teams and people will host parties from the comfort of their home. Develop these offerings with the future in mind, not just the present.
Reduction or Stabilization of Average Spend: This isn’t the best of news but it’s something we have to work with. 20% of Gen Z is now drinking age and Millenials are 25-40 years old. These two groups are driving the market and will for the foreseeable future. Data is showing that younger customers are more selective with or less likely to exhibit brand loyalty, and more cost-conscious. They appreciate sustainable sourcing, the products story and innovation, while also seeking a high QtV ratio. Despite several years of increased average bottle price, 2020 will show a decrease in almost every category. Obviously, there has been economic and job uncertainty as contributing factors. However, I anticipate these numbers we see in 2020 to be stable for years to come, with the real possibility of consecutive years of small reduction. If you’re building a brand or reinventing, analyzing your pricing should include this expectation.
