Competitor Strategies in Alcoholic Drinks

October 2021

Emerging from the restrictions and on-trade collapse of the COVID-19 pandemic, alcoholic drinks companies are navigating a rapidly evolving environment. Lasting changes in consumer priorities and expectations are resulting in a need for adaptation and new approaches. This report examines the global competitive landscape, with an emphasis on strategic focus areas and potential challenges.

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Key Findings

Expansion strategies differ by category

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.

Setbacks for premiumisation?

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.

Embracing e-commerce and hometainment

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.

Conditions favour larger players over micro producers

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.

Blurring category lines: Diversification for growth

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.

Introduction

Scope
Key findings

Industry Overview

Companies at a glance
M&A activity continues to play a key role despite challenging conditions
Emerging markets still dominate leading companies’ volumes
Significant share gains for top hard seltzer brands
Hard times for hard seltzers?
Broad portfolios of leading brewers reflects the local nature of beer
Limited pandemic-driven gains for private label
Reversal of fortune for craft as consumers seek comfort in the familiar
Sustainability is gradually climbing the agenda
All eyes are on the on-trade
The future is digital

Diversification for Growth

Companies broaden their horizons
Diversification: acquisitions, partnerships and blurring boundaries
Cannabis: the next frontier
Spirited growth for RTDs

The Category Perspective

Different categories require different expansion strategies
Brazil: key battleground for AB InBev and Heineken in beer
Low per capita beer consumption attracts attention in India
Beer in Nigeria: targeting trading up trends from a different angle
Recent developments illustrate top distillers’ value over volume focus
Aspirational consumption in US tequila provides a boost for Diageo
Polarisation to replace premiumisation in spirits?
Heineken reduces its reliance on leading cider market
Limited lead for top players in fragmented wine market
Modernisation efforts target younger demographics in wine

Conclusion

Conclusion: placing versatility at the centre of recovery

Alcoholic Drinks

Alcoholic drinks is the aggregation of beer, wine, spirits, cider/perry and RTDs.

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