Alcoholic drinks companies have had to rapidly adapt to on-trade closures and the changing nature of consumption occasions driven by the pandemic. As well as traditional e-commerce channels, direct-to-consumer sales have been embraced to help navigate this shift. While premiumisation is facing setbacks, opportunities in higher end products remain, and the moderation trend continues to influence innovation.
The three major alcoholic drinks categories all require different strategies, primarily due to their different modes of operation. Beer relies on producing large volumes close to the point of sale, while wine and spirits are the opposite. Even in wine and spirits there are differences, for example branding is far weaker in wine than spirits.
Economic pressures will affect consumer choices in the short to medium term resulting in polarisation, with a focus on the highest and lowest priced products. There are still premium opportunities; brands should look to build strong emotional connections through a focus on genuine authenticity, taking a visible stance on sustainability, and embracing a luxury positioning while avoiding ostentation.
With Coronavirus accelerating the existing shift towards home socialising, companies have been redirecting the focus of engagement and experience efforts into consumers’ own homes. Major corporations and micro producers have both been embracing direct-to-consumer sales. Standard online channels and third-party platforms have also been playing a key role, with the rise of e-commerce expected to be a lasting trend.
In general, the resources available to major companies are likely to provide greater resilience and place them at an advantage compared to their micro rivals.
The lines between different drinks categories, and the companies operating within them, are becoming increasingly less distinct. With consumers reducing their alcohol intake in many key markets - and showing little category loyalty - diversification is an essential feature of many alcoholic drinks companies’ growth strategies. Non-alcoholic beverages and cannabis are two particular areas of focus.
If you purchase a report that is updated in the next 60 days, we will send you the new edition and data extract FREE! Home Page