Younger generations are leading the move toward health and wellness in alcoholic beverages, a move that will impact drinking quantities and preferences, Nielsen says. Consumer desires will drive more transparency in labeling and supplier product innovations.
You can expect to see growth in the following:
- Spirits/cordials that are lower alcohol by volume (ABV)
- Lower ABV ready-to-drink cocktails
- Lower ABV and lower calorie IPAs
- More alternative beverages with no/low sugar and carbs, and low calorie options
- Greater selection of non-alcoholic craft beers, with major craft brewers starting to play in this space
- Active, lifestyle-oriented drinks that tie into consumer interest in their active routines
Spirits Will Drive the Most Consistent Growth
Building on an already upward trajectory, spirits will experience the most growth from whiskey, tequila, cognac, ready-to-drink/prepared cocktails and Tito’s Handmade Vodka, the top-selling spirits brand and one that is still experiencing double-digit growth. Premium and ultra-premium segments will continue to pace the category, at the expense of lower price tiers.
Spirits have the advantage of a versatile product range with multiple drink types, flavors, styles and mixing opportunities—meeting the desires of the cocktail culture, and appealing to a broad consumer base (age, gender and race/ethnicity).
Suppliers and Distributors Will Put More Energy, Investment into Their E-commerce Efforts
While Beverage Alcohol e-commerce sales continue to grow, the industry has struggled to keep up with broader e-commerce expansion in part due to complex alcohol rules and regulations, but 2020 will represent a turning point in the industry’s efforts. Key players will ramp up their investment, recognizing the potential of impulse purchasing declines in mainstream stores as consumers fill more of their overall shopping needs online—and not via a store trip.
Growth in the Beer Industry Will Focus on Nearly Everything But Beer
Expect to see more acquisitions—particularly by big beer companies—in spirits and some selected growing segments of wine. Brewers of all sizes will invest and innovate in ready-to-drink cocktails and even traditional spirit products.
Beer brands will continue to try to play in the space adjacent to cannabis through products that use hemp and emulate the olfactory experience of cannabis.
Craft beer will continue to find success with styles found in more traditional beer segments (e.g. American and Mexican lagers).
Hard Seltzer’s Growth Will Be Supplemented by “Hard” Beverages of Other Types
The number of players involved in hard seltzer will double in 2020, adding products from big brewers/mainstream brands, craft brewers and spirit companies.
Additionally, we will see an increase in sub-segments of hard seltzers, focused on attributes like higher ABV, healthy ingredients and features, bolder flavors, and heightened product development and innovation around hard kombucha and hard coffee. These options won’t make as big of a punch as leading seltzers on the market today, but will attract a different type of consumer/drinker.
Growth rates for hard seltzer are unlikely to match those of summer 2019, as the base of business grows substantially. At the same time, the introduction of so many new brands by new players, along with the introduction of new flavors, packaging and formulas by existing players, all will help to fuel growth.
Ready-to-Drink Cocktails—across Beer, Wine and Spirits—Will Boom
Packaging will focus on the convenience of slim cans and alternative packaging. Many will be traditional cocktails with a twist to make them more interesting (e.g. Mezcal Mule). Retailers will continue to focus on convenience, through tactics like prepared cocktail displays, regardless of the alcohol base.
Table Wine Will Encounter Struggles, but Opportunities Remain for Total Wine
Table wine will face downward trends, with the biggest losses coming from lower-priced wine in bottles, as long as the economy continues to be healthy.
Pockets of growth in wine will including the following:
- Sparkling wine, driven largely by Prosecco
- Rosé, though growth is unlikely to be more than single digits
- Wines from New Zealand and Oregon, with potential also from Eastern European countries
- Wines in cans and alternative packaging
- Wine spritzers and wine-based cocktails in cans
- Firm entrance into the health and wellness conversation, via lower ABV and biodynamic wine.