Revenue in the Alcoholic Drinks market will reach $283.8bn in 2023. This represents the first year that revenue will surpass pre-pandemic sales, showcasing that the industry is moving beyond recovery and into growth. In fact, by 2027, revenue in the BevAlc market will grow by 24%, which is relatively even across subcategories, led by beer and followed by spirits, wine and then hard seltzer. This is significant, particularly when you compare the projected growth of BevAlc to other leading categories, such as non-alcoholic drinks (+17%), confectionary (+12%), bread and cereal (+13%), home and laundry (11%), and beauty and personal care (10%).
Despite this promising growth outlook, there are several challenges that BevAlc marketers need to overcome today, including rising prices, increased cost consciousness, and subsequent choice paralysis when selecting from new brands.
So, how do we overcome today’s challenges to capitalize on tomorrow’s growth? To answer this question (among many others), I curated a panel of BevAlc experts from across the category to join me at the Path to Purchase Institute’s P2PI Live & Expo event in St. Louis, MO. This panel included Heather Kozera, VP of Customer & Trade Marketing at Jägermeister, Derek Correia, CEO at ReserveBar, Molly Swopes, Senior Manager, Channel Marketing at Moët Hennessy, and Max Leonesio, Director, National Accounts eCommerce at Constellation Brands.
A collection of photos taken of our session
Below I’ve recapped some key takeaways from our discussion.
#1. No Alcohol, No Problem
It’s impossible to discuss category trends without the topic of No-Low Alcohol being brought up. It was interesting to hear the perspectives of each of our panelists. Molly shared that it’s in fact not a new trend, saying that “it’s always been here, but it was never given a runway,” sharing examples of how “Dry January” and “Sober October” bring people together. In a similar vein, Derek shared his perspectives on the community aspect of bars stocking “No-Low Alcohol” options, sharing that “there’s a mindfulness and inclusiveness aspect when drinking.” Derek went on to share that having No-Low Alcohol options at bars increases inclusivity in social settings.
#2. On-Premise Trial Drives Off Premise Purchases
I shared during my session that 42% of spending in BevAlc will be attributable to out-of-home consumption by 2027. This was an interesting discussion point given the continued increase in both online and offline purchases. One factor driving this trend is consumers’ desire to explore and discover new brands. To capitalize on this, on-premise trials have emerged as a favored approach for introducing new BevAlc brands, with 67% of US consumers more inclined to seek out these brands in stores after experiencing them in bars and restaurants. So, it’s clear that on-premise trials play a pivotal role in shaping consumer preferences and driving brand adoption.
#3. Innovations Will Disrupt the Category
Of course, the topic of technology disruptors was discussed, with each of us sharing our thoughts on the expanded use and adoption of AI and technology more broadly within the category. We discussed in detail how we each see the role of AI evolving in the advertising landscape in the future. Derek detailed ReserveBar’s approach to predictive AI when it comes to inventory orders. Max shared his thoughts on how generative AI supports productivity, which was echoed by Heather. I shared in detail how AI and other technology disruptors impact Aki’s business and how we leverage technology to support our clients in achieving their goals.
There were many more topics of conversation, including challenges surrounding data access, opportunities surrounding personalization, and each of our predictions on the future of the category. If you’d like me to share more, feel free to email me directly and I’ll set up some time to share more key takeaways from this discussion in greater detail.
Cristina Costa, Cristina Costa, Senior Sales Director, CPG & BevAlc at Aki Technologies
Email: cc@a.ki