If you don’t mind having an alcoholic beverage every now and then, you’ve probably noticed some changes happening thanks to the liquor industry trends that are currently being experienced.
About 60% of people identify themselves as current consumers of liquor at any given time. Only about 1 in 4 people identify with abstaining from the consumption of alcohol at all times.
Liquor can be big business. 33% of adults in the US, for examples, enjoy 3 or fewer drinks per week. About 5% of liquor consumers average at least 1-2 drinks per day. Because of this, the liquor industry as a whole spends more than $1 billion in advertising each year. Watch for these trends in the coming years as the liquor industry adapts to changing consumer preferences.
At-Home Liquor Consumption Will Increase
- Concerns regarding personal safety on a number of fronts are creating a “home-tainment” way to get together with friends to enjoy liquor. According to DoSomething.org, for example, every 51 minutes in the US a person will be killed because of a drunk driver.
- Between 50-75% of the people who have had their licenses revoked due to driving under the influence drive illegally without their license.
- Look for the liquor industry to make a marketing push to reach out to people where they’re choosing to drink, blurring the lines between what it means to go out and what it means to stay at home.
- According to Gilles Bogaert, CFO of Pernod Ricard, the industry will focus on this at-home consumption trend by helping to organize parties and through the use of social media to share photos from home parties so that more “home-tainment” opportunities can be developed.
- For The Drinks Business, this also means that there will be a niche, exploratory experimentation that will become popular within the mainstream liquor market.
- Apps to embrace the desire for personalized liquor products, such as barrel specifications or home-creation opportunities, will also attract younger consumers who may not have much experience with the liquor industry on the whole.
- The industry will also look to adapt their marketing to reach out on the individual level, especially through video games and upcoming VR opportunities.
When it comes to liquor consumption, people are becoming much more conscious of what happens after they’ve had a few drinks. In the last 30 years, alcohol-related deaths have declined by 50% and the greatest proportional declines per capita have been in the youngest consumer demographics. Embracing the trend of responsible, at-home liquor consumption is a trend which makes sense for the industry. To do that, they must personalize the experience. It’s not about just getting a bottle of liquor into someone’s hands any more. It’s about providing an enjoyable experience in every way.
Consumers Are Demanding Authenticity
- According to Bogaert, consumers are demanding fewer emotional connections to their liquor products in favor of greater overall authenticity. For this reason, many liquor brands are abandoning strange flavor combinations in favor of a message that promotes heritage and history.
- From data collected by The McCarthy Group, Millennials rank the trustworthiness of advertising and sales at 2.2 on a scale of 1-5. 84% of Millennials say they don’t like advertising at all.
- A study by Annalect shows that 52% of all consumers consider how a brand incorporates technology before they’ll determine if they’re ready to make a purchase. 39% say they are more loyal to brands that have technology they consider to be up-to-date.
- 47% of consumers say that they were introduced to a new brand they enjoy through the use of social media.
- Artificial flavors and ingredients that no one knows how to pronounce are going to be rejected more often from consumers who want to enjoy liquor products that are made from scratch.
- Consumers will be seeking out immersive experiences with their liquor, be willing to question what is considered to be acceptable, but also demand information in short bursts thanks to shorter attention spans.
- Look for personalized phrases to become part of the branding message as a way to promote authenticity and quality. Absolut has done this in two ways: “Oak by Absolut,” which is vodka made in oak barrels; and “Absolut Elyx,” which is described as being a handcrafted luxury vodka.
- There will also be mergers and acquisitions within the liquor industry as providers look to capitalize on the personalization and authenticity demands of consumers, and especially Millennials. Pernod Ricard, for example, acquired a majority stake in Monkey 47 gin despite own a mainstream gin brand already.
- From a consumer standpoint, watch for a resurgence in the desire to have a classic cocktail more often. Although vodka will always be fairly popular, look for traditional favorites like tequila and room to make a comeback as well.
- Because of the focus on health, look for the industry to shift away from cocktails that promote multiple liquor recipes. Experimentation into healthy food segments, such as more vegetable offerings, may become a way to reach out to new consumers.
Liquor consumption is more than just a need to “get a buzz,” or “drown sorrows,” or some other coping mechanism. It’s also a way to connect with friends, enjoy life, and create great experiences. People have a desire to live authentically today and they demand that from their brands. This trend, as it continues to expand, will cause the industry to develop small batch products, focus on production cycles, and offer more sophistication with every product. The brands that fail to make these changes will likely disappear in the coming years because they will be perceived as being inferior.
The Liquor Industry is Going to Make an Online Surge
- In the next 7-8 years, Bogaert states that Pernod Ricard hopes to have at least 5% of all sales be through digital channels.
- Watch for liquor industry professional to create brand-specific digital platforms that reach out to targeted local and regional demographics. Using Pernod Ricard as an example, there is already digital platforms in place that target France and the United Kingdom.
- Existing e-commerce solutions that already have a loyal consumer base will also be utilized by the liquor industry. Watch for partnerships with platforms like Amazon to help encourage greater liquor sales over the next decade.
- Online marketing and social media marketing will be used more extensively because it will give the liquor industry a way to communicate directly with individual consumers. This offers brands the opportunity to respond to specific concerns and unique drinking habits.
- Part of the effort of moving online for some brands will be to avoid punitive taxation that some jurisdictions are beginning to implement. There must also be a message offered that counters the anti-alcohol rhetoric that will grow louder as health guidelines regarding liquor consumption may be rewritten.
- New products may not be the focus of the liquor industry, but it will be an important component of consideration after authenticity. Watch for liquor that infuses cannabis products as a way to reach out to new demographics, especially in markets like Colorado and Washington where recreational use has been legalized.
- Emerging market targeting will continue to be important for the liquor industry, but because of the need for authenticity, watch for brands to focus more on regional diversification and events that promote local brand exposure more than mass-marketing messages to generate revenue increases.
- Because of this, the growth of craft products from small- to medium-sized businesses may be unsustainable in the future. Brands will need to become well-established or create disruptive liquors in order to survive.
- Food-inspired products are also going to offer co-branding efforts in the future for the liquor industry. We’re already seeing beer products become included with ice cream. Look for certain liquors to create partnerships with food brands as well to give the beer partnerships a run for their money.
- Watch for new outreach methods of communication about liquor to increase, including the use of podcasts from specific liquor brands, to engage consumers who are on the fence between consumption and temperance.
- Fresh herbs and spices will also be added to products more often, offering different flavor tones without being as obtrusive as something like Apple Candy Schnapps.
The liquor industry has been experiencing slow and steady growth for quite some time and that doesn’t look like it will change any time soon. There are some challenges that the industry must meet, however, for it to continue to be successful. By embracing the trends of volunteerism, non-profit support, and establishing programs that can give back, the liquor industry will be able to show its consumer that it wants to make a positive impact on the world today. Millennials especially look for something that is easy to access online, handcrafted, locally made, and environmentally friendly. They’re willing to pay more for products that meet those specifications. This is where the liquor industry must go to maintain its success.
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