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Alcohol Industry Trends & Alcohol Marketing Best Practices

Alcbev insights: where customers are going and how to engage them effectively

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    The Alcohol Industry Landscape

    We’ve all been on a bumpy ride as we navigated the COVID-19 pandemic. But despite upended consumer behavior and the overall retail environment—the Alcoholic Beverage Industry did not experience a drop in sales like many industries did. And, with the availability of vaccines, Americans are ready to get out to bars and backyards to crack open a cold one with their crew. Read our BevAlc Industry Trends report below or download the PDF version here to save or share: Alcohol Industry Trends Reports (PDF) The three sections in both formats are:

    1) The Alcohol Industry Landscape

    2) 3 Key Trends in the Alcoholic Drinks Industry

    3) BevAlc Industry Marketing Best Practices

    Revenue in the Alcoholic Drinks market amounted to US $249,088m in 2021. The market is expected to grow annually by 9.06% (CAGR 2021-2025).

    65% of Americans say they drink alcoholic beverages at least on occasion. Their preferred type of beverage:

    • Wine 30%
    • Beer 38%
    • Spirits 29%

    The market's largest segment is Beer with a market volume of US $109,028m in 2021.

    During COVID-19, alcohol consumption increased across all generations. From August 2019 to 2020, frequency of alcohol consumption increased:

    • Gen Z 25%
    • Millennials 28%
    • Generation X 29%
    • Boomers 4%

    While beer remains the overall preferred drink for Americans, wine and spirits are nearly tied for second place, in part due to growing bargain wine brands and spirit flavor varieties.

    The Beer Market
    The beer market saw overall revenue of $94.1 billion in 2020, down from $116 billion in 2019. The craft beer movement now controls 24% of the beer industry, but lost 22% of sales in 2020, with revenue of $22.2 billion.

    Hard Seltzer
    In 2019, the global hard seltzer market was valued at $4.4 billion, with a projected compound annual growth rate (CAGR) of 16.2% from 2020 to 2027.

    Online Sales
    Online Sales of alcohol drastically increased during stay-at-home orders and restaurant/bar closures in 2020, with $5.6B in sales—a 115.4% increase from $2.6B in online alcohol sales in 2019.

    Gifting:
    Gifting rose to nearly 20% of all sales on Drizly in the month of December, double the amount of share in December of 2020.

    The developments we’re seeing underline the need for some serious marketing adaptations. The following guide will give you a better understanding of some of the key trends that are shaking and stirring the alcohol business, and the tips you’ll need in order to thrive. See also this post on alcohol marketing strategies.

    Trend #1: Drink Responsibly, Stay Home

    The COVID-19 pandemic hit the world hard as many of our regular social activities were restricted for safety— including dine-in service for bars and restaurants. Even though our favorite watering holes were shuttered, and bulk buying of alcohol dropped, people still wanted to drink, and beer, wine, and spirit sales increased at liquor stores.

    Drinking at Home a Continuing Trend?

    Drinking at home became the norm during the depths of the pandemic, but home drinking was on the rise pre-COVID. In fact, 28% of young Millennials reported that they prefer to drink at home. Why? Drinking at home is cheaper, more personal, and relaxing.

    A 2018 survey from Mintel found that 55% of Americans of legal drinking age prefer to drink at home for these reasons. While many may flock to bars and restaurants initially as the pandemic continues to fade, the cost, safety, and intimacy of drinking at home will likely remain appealing in the long run —especially for the exceptionally frugal Generation Z.

    Cocktails Go Virtual

    In response to the pandemic, many breweries and distilleries began offering curbside pick-up for pre-made cocktails and at-home mixing kits, as well as online mixology experiences. Efforts to stay afloat amid the economic crisis also met the needs of many looking to fill their time at home. At-home mixing kits and online mixology experiences gave consumers something fun and different for quarantine birthdays, date nights, happy hours, and more.

    Virtual happy hour experiences mix well with Americans who preferred to stay home to drink before the pandemic and could become an important revenue stream for alcohol brands of all sizes.

    Trend #2: Hard Seltzer Targets Health-Conscious & Premiumization

    Beer is contending against lighter, lower calorie hard seltzers and other flat malt drinks like hard lemonade and kombucha. In 2020, hard seltzer and flat malt beverage sales were up 68% from previous years —thanks to the growing popularity of hard seltzer.

    Health-conscious drinkers see hard seltzers as a “better for you” option to beer, with many coming in with fewer calories and lower carbs. These drinks also appeal to those concerned with ingredients as they’re more likely to contain and highlight fresh fruit, 100% fruit juice, and even organic certifications.

    Big and small breweries alike are developing hard seltzers, including Michelob’s certified organic hard seltzer released at the beginning of 2021. The first hard seltzer to receive a national USDA organic certification, Michelob’s drink boasts zero carbs, zero sugar, and only 80 calories per can—checking all the health-conscious boxes.

    Hard seltzers might scream signature young Millennial to some, but in fact—half of the growth in the hard seltzer market is attributed to those aged 35 to 54.

    Driving Awareness for Hard Seltzer Lines with Gamification

    Many brands previously known for their beer have been mixing things up with their own hard seltzers. In order to drive awareness to their new Corona Seltzer products, Constellation Brands partnered with Snipp to create a digital, age-gated gamification promotion. Consumers texted “COCKTAIL” to a unique number to receive a link to the program’s branded microsite. They were required to pass an age and state gate before they could “spin” to win a $50 prepaid digital gift card. Following the game, consumers could view a digital cocktail recipe book.

    Premiumization: Trading Up Beer for Seltzer

    Premiumization is also attributed to the growth of sales in hard seltzer. Consumers see hard seltzers and lemonades as an elevated drink option to traditional beer. In addition to its lower calorie and sugar content, hard seltzers also offer ranges of flavors, from original lemonade to exotic fruits and even spicy pineapple.

    Trend #3: Millennials & Gen Z Value Quality Over Quantity

    While Gen Z, loosely defined as those born between 1997 and 2012, haven’t all reached legal drinking age, those who do drink do so less than their older Millennial siblings and their parents did at the same age.

    A number of factors are at play here, including awareness of the increased health, social, and legal risks of excessive drinking, as well as greater awareness and understanding of alcoholism. Younger generations haven’t sworn off alcohol, but they have developed a mindful approach to alcohol consumption and embraced drinking responsibly.

    Gen Zers drink 20% less per capita than Millennials, and Millennials also drink less than Generation X and Baby Boomers did at the same age.

    Younger groups will shell out for the good stuff

    While younger groups tend to drink less by volume than their older counterparts did at the same age, they are more likely to shell out for the good stuff. As seen in the craft beer movement and the exploding hard seltzer market, people will pay for quality and variety. Additionally, in the case of on-premises drinking, Millennials are more likely to experiment with new craft brews or specialty cocktails that offer funky flavors or combinations.

    Especially since drinking at home is on the rise, going out for drinks becomes a special occasion. Those going out are willing to spend more to have drinks they wouldn’t stock at home, like non-traditional spirit flavors or out-of-the-ordinary flavor combinations in a craft beer.

     

    Best Practices For the Alcohol Industry

    In an environment that rewards change as well as tradition, alcohol brands today need to push the envelope in their quest to reconcile these contradictions and engender loyalty from their increasingly diverse consumers. The brands that succeed find ways to engage their audience with their brand stories through digital and social channels and become part of a lifestyle.

    1 - Share Values with Consumers

    In addition to valuing simple ingredients and sustainable business practices, many consumers align themselves with brands who also go the extra mile to support communities through donations, fundraisers, and other charitable acts. Brands who actively invest in the issues their customers care about can gain sales and brand loyalty (and additional donations) online and off.

    Here are some examples of brands doing just this:

    • Constellation Brands has a history of supporting military families, and they wanted to continue this tradition during the pandemic, as well as expand awareness and engage consumers. Using the Snipp platform, the company implemented a campaign to drive awareness and donations via text to connect consumers directly with their non-profit partner, Operation Homefront. The campaign had SVEDKA and Woodbridge displays featuring a keyword and number to text to get a link and donate directly to Operation Homefront. The nonprofit created a custom branded webpage to support the effort, and Snipp provided the text and keyword technology to drive traffic and donations.
    • In another example, Miller Lite spent the holiday season donating food and beer to Latino communities for holiday celebrations through their Give Back 12-Pack program. In addition to the food and drinks, Miller Lite also made a $50,000 donation to UnidosUS’s pandemic relief fund.

    2) Embrace New Drinking Lifestyles

    Alcohol brands have long aligned their marketing with a lifestyle—with the culture around drinking changing, brands have an opportunity to embrace the new lifestyle. Guinness used a tongue-in-cheek television and social media campaign where the company marketed their “new” product, Guinness Clear (a.k.a. water), to promote responsible drinking habits.

     

    3) Leverage Digital Media to Engage the Targeted Consumer

     Digital engagement is important with online ordering on the rise and stores tightening up display space. Alcohol companies have guardrails in that they cannot promote certain retailers. Focusing on an enhanced digital experience and online orders can help grow awareness and sales. The pandemic enhanced and grew the eCommerce space for many industries, including alcoholic beverages, and even previously- digitally-averse consumers are ordering online. Of course, it's not all digital, so click here for in-store shopper marketing campaign examples.

     

    4) Reward Consumers in Relevant & Meaningful Ways

    Alcohol brands are usually associated with lifestyles. The best promotions then, offer consumers “experiential” rewards that integrate and expand upon a “desirable lifestyle.”

    Snipp created two such (age-gated) programs for a leading vodka brand:

    • A golf themed sweepstakes to activate consumer excitement. Participants earned branded golf swag by simply registering on an age-gated microsite.
    • A gift with purchase program to promote responsible drinking, where consumers received Lyft codes on qualifying purchases.

    We're here to help!

    Learn how Snipp can help you with alcohol marketing promotions and campaigns as well as alcohol loyalty programs. Contact us here.

    Here's a summary of the content and get the full guide here: Alcohol Industry Trends Reports (PDF)

    Snipp-Resources-Infographic-2021-Alcohol-Industry Trends

     

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