Alcohol Industry: Trends
Some additional trends impacting the alcohol industry include the use of cans (slim cans) as well as alternative packaging for the ready to drink alcohol category to boost convenience, and more online shopping (e-commerce sales). Another trend affecting the alcohol industry in the United States relates to labeling transparency and supplier product innovations.
Cans (Slim Cans) and Alternative Packaging
- Trends affecting the United States alcohol industry (as published by the Spirits Business) include a focus on slim cans as well as alternative packaging. Slim cans and alternative packaging improve the convenience of packaged alcohol.
- According to Market Watch (a New York-based publication), non-traditional can package (including slim cans) are contributing to the rising sales of canned beer, which is experiencing growth.
- According to Jessica Robinson, the vice president of emerging brands, Heineken USA, slim can beers such as slim canned ciders are designed to "meet an emerging consumer need." Available data reveal that slim can ciders (such as Strongbow's hard ciders) are fast-selling options.
- Companies in the alcohol sector taking advantage of rising consumer demand for slim can alcohol (ciders) include Strongbow Hard Ciders. It is a White Plains brand of the New York-based Heineken USA Inc. The company recently announced the launch of a 100-calorie, 8.5-ounce slim can alcohol with three varieties of flavor.
- Consumers feel canning make better packages for alcohol when compared to bottles, according to Chad Melis, the marketing director of Oskar Blues, a Colorado brewery known for popularizing canned craft beer. Craft beer pioneers once relied majorly on bottles — however, canned beer (an alternative to bottled beer) is more affordable for brewers — it is also getting a growing response (demand) from craft beer consumers. Consumer demand for canned beer and its convenience to brewers is driving the trend for canned alcohol and alternative packaging.
- A Market Watch magazine article states that "canned beer is back." Craft players are driving the rising sales canned beer, which is trending "in a big way."
- Some sellers attribute the increasing sales of canned beers to the growing sales of slim can alcohol drinks like Michelob Ultra in slim cans.
- Beer marketers have been positive about alcohol package in cans; they agree that canned beer has several advantages over the traditional beer in glass packages among consumers as well as retailers. Canned beer is perfect (convenient) to drink on several occasions — whether on a boat, on the beach, or at a game. Retailers think the smaller size of cans packs when compared to bottled alcohol makes them fit more (convenient to fit) on their shelves.
- Retailers, as well as beer marketers, believe the rise in can packaged alcohol as an alternative to glass bottles is tending because the "previous stigma associated with" beer packaged in cans has dissipated.
- Canned alcohol feels lighter and is more mobile when compared to its glass counterpart. They are easier to transport on hikes as well as easier to utilize for most outdoor activities. A canned alcoholic drink goes to places that glass drinks cannot, such as pools, parks, and beaches. These convenient options explain the continued growth in the use of cans to package alcohol (especially in wine).
Online Shopping (E-commerce Sales)
- Trends affecting the United States alcohol industry (as published by the Spirits Business) include the use of online shopping (e-commerce sales) channels.
- According to Linchpin SEO (a Chicago-based company), trends transforming the alcoholic beverage industry in 2020 include online (e-commerce) sale of alcohol, which is becoming more popular.
- Alcohol industry insiders have realized that the sale of alcoholic drinks from online channels and doorstep delivery is becoming common. Companies that are already leveraging this trend to sell large volumes of alcohol via e-commerce across the United States include Drizly and Thirstie.
- The online sales of alcohol reached $2.6 billion in 2019, representing a growth of 22% YOY.
- Online alcohol sales across grocery channels (online sales made by supermarkets, warehouse clubs, supercenters, and grocery stores sales through Instacart) was $87 million in 2017. This sales value has more than tripled within the past two years and is now worth about $295 million. In 2019, online beer sales by grocery stores grew by over 120%, while the sales of alcoholic wine grew slightly less than 100% — the sale of spirits grew by about 150%.
- One of the factors responsible for the growth of e-commerce sales of alcohol is the instant activation of "online alcohol programs" among grocery retailers. About 18% (200 locations) of Walmart offer alcohol delivery via e-commerce sales. Costco, the most significant wine retailer across the United States, is leveraging this trend and commenced online sales of alcohol in October 2019.
- Another factor driving the rising sales of alcohol via e-commerce across the United States include favorable legislation relevant to online sales (via click and collect). Experts estimate that the fulfillment of alcohol purchases through the use of "click and collect" (or C&C, a hybrid e-commerce sales process) is legalized in about 39 states (where about 90% of the United States population resides). Third-party delivery is legal in about 30 states (home to approximately 80% of the residents of the United States).
- Alcohol selling grocers like Walmart and Kroger are enhancing their e-commerce capabilities, while consumers of alcohol are getting comfortable utilizing such e-commerce channels. Consequently, alcohol brands will continue to experience a significant rise in sales made via online grocery. Online channels represent the only channels across the United States through which "alcohol sales are steadily growing."
- According to Adweek, about 2,000 Walmart stores in 29 states now have alcohol available via their online grocery offerings. Online grocery is the most important driver of alcohol sales via e-commerce (online sales).
Labeling Transparency and Product Innovations
- Trends affecting the United States alcohol industry (as published by the Spirits Business and ascribed to Nielsen) include labeling transparency as well as product innovations.
- More transparency in labeling, as well as supplier product innovations, will be recorded in the alcohol industry due to consumer demand for transparency and their interest in health as well as well-being.
- Labeling transparency in the alcohol industry is driven by the number of consumers demanding it. According to Impact Group, a recent Mintel reports states that about 33% of drinkers age 22-24 feel that menus should indicate the ABV for all types of drinks. In contrast, about 15% of drinkers aged over 31 years are interested in greater transparency in the labeling of alcohol.
- The demand for transparency among consumers in the alcohol sector is driving brands to become innovative and more transparent. One of the brands leveraging this trend is Bud Light — the company recently took an innovative step and became the first beer brand across the United States to include its ingredients on its label and packaging.
- Michelob Ultra Pure Gold is an innovative alcoholic drink "perfectly positioned to ride" the wave (trend) related to the demand for labeling transparency and product innovations in the United States alcohol sector. Michelob is the fastest-growing beer brand in the United States and has launched the premier "USDA-certified organic light lager" known as Michelob Ultra Pure Gold. The brand believes the innovations meet the needs of alcohol consumers with evolving needs.
- One factor driving transparency in the alcohol industry is related to the fact that more consumers are getting interested and concerned about health and wellness and consequently expect transparency.
- Trends affecting the United States alcohol industry (as published by the Spirits Business) include lifestyle-oriented drinks. Lifestyle-oriented drinks are becoming popular because they address consumer interests and routines.
- A recent article credited to the San Francisco Chronicle states that beer companies understand the interest of their consumers and are pivoting their marketing strategies to reflect such interests, like health and wellness. Today, wellness beer leverages brews as "tools for athletic recovery," self-care as well as total physical optimization.
- One company riding on this trend is the Sufferfest Beer Company, a subsidiary of Sierra Nevada Brewing Company. The company targets athletes by marketing its beers to suit their lifestyle (as recovery drinks).
- Another company offering lifestyle-oriented alcoholic drinks in the United States is Dry Farm Wines (known as a Napa Valley company). Dry Farm Wines has wines that suites various lifestyles, including natural-, paleo-, keto-, and low carb-friendly lifestyles.
- Natural wines, also known as "raw wines," are made with less processing and utilize fewer chemicals. They are less likely to give rise to hangovers and are becoming increasingly popular. The various options of alcohol that fit different lifestyles are becoming popular as brands "attempt to win millennials" who have more lifestyle choices when compared to older generations.
- Several lifestyle-oriented drinks that promote wellness are trending in an unexpected industry (the alcohol sector) because several brands are trying to appeal to "wellness-obsessed millennials."
- Gem&Bolt LLC (a company based in New Jersey, United States), uses an ingredient known as damiana in its beverages. It is one of the companies marketing its "booze" (alcohol) as a wellness drink to desperately capture the market. Gem&Bolt LLC claims its drink (infused with damiana) promotes overall sexual well-being among men and women (damiana is used to treat some symptoms of menopause and also treats premenstrual syndrome).
Some trends impacting the alcohol industry have been investigated and those that appear across a plethora of resources identified. Trends published by reputable business magazines such as The Spirits Business about the United States are in the study. Additional insights to back up the identified trends are from RaboResearch Food & Agribusiness publications, Market Watch, Adweek, Pulse (Business Insider), and similar resources. The study considers insights identified as trends by credible resources, implemented by successful alcohol companies, and appearing across a plethora of resources as worthy of inclusion. Due to limited resources on specific to trends that are impacting the alcohol industry in the United States, trends published by companies in the United States are in the study (even where they do not reference any particular country).