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