Shifting Habits: Drinking Occasions and Channel Mix

June 2023

Drinking occasions, socialising and beverage channel behaviours across alcohol, soft drinks and hot drinks will be shaped by a new and less familiar balance of personal health, moderation, intoxication and community engagement. This report explores the impact of substantial recent changes in the cost of living, long-term changes in social geography, and the five pillars of the new beverage routine, impacting where, when, what and how much we drink.

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This report comes in PPT.

Key Findings

Prioritising affordability across channels

Inflation and a global cost of living crisis means that many channels (particularly on-premise) will stay beyond the reach of global consumers in the short term. Beverage suppliers need to continue to develop innovative ways of maintaining margin-friendly affordability, despite rising input costs, by optimising ingredients, packaging and ROI on smaller scale innovations across premium growth categories.

Experiential marketing and digital engagement to drive traffic

Beverage brands must adapt to hybrid modes of work and “omni-occasion” engagement – both physical and online – as the next step after omnichannel commerce. Immersive experiences and value-based connections will foster lasting connections between drinks brands, channels and consumers. Digital engagement has also been the basis of innovation success stories in 2023.

Differentiation through effective limited scale innovations

On-the-go, on-demand, flexible patterns of consumption (delivery or drive-through drinks) will remain vital in a post-pandemic world. This includes launches of higher quality spirit-based RTDs and low/no alcohol adult soft drinks, capitalising on younger consumers seeking to reduce alcohol intake. Unique flavours, quality ingredients, package design and LTOs help to captivate, retaining interest and relevance.

Community-based marketing and localisation

Pubs, taprooms and cafés are community hubs and vital to socialising, as many contend with isolation and loneliness. Beverage brands seek to build new, less traditional audiences, reaching into communities and interest groups in a more localised and personal way. This involves partnering with local events and organisations, as well as customising products according to regional tastes or feelings, like nostalgia.

Functionality and wellness creating new occasions for drinks

Demand for functional beverages and wellness culture continue to expand post-pandemic. Consumers are moderating alcohol consumption and seeking alternative ingredients for new need-states, incorporating adaptogens, cannabinoids and sports nutrition.

Key takeaways (1)
Exploring shifting habits: Drinking occasions and channel mix
Drivers of shifting habits, drinking occasions and channel mix
Drinking occasions uncovered
The cost of living crisis is being disproportionately felt by lower income consumers
Consumers are moving to discount grocers, buying second-hand products and private label
Gains in disposable income are partly offset or entirely erased by rising prices
Rising prices fuel the growth of household debt, as consumers bridge the gap through credit
On-trade is the biggest source of drinks price inflation and expected consumer cutbacks
Case study: Hey Tea pledges to cap prices to win back Chinese consumers
Price inflation has bolstered the profits of global consumables suppliers, as volume ebbs
Case study: Campa Cola capitalises on nostalgia and value-seeking Indian consumers
Premium retail alcohol as an affordable alternative to on-trade consumption
A freer spending upper-middle income consumer sustains on-trade recovery and outlook
Case study: Fundacion Si and the importance of social engagement and integration
Rising prices and widening inequality are the biggest short-term threats to social occasions
Hybrid work models, new daytime populations and ongoing disruption to on-trade channels
Expectation of work from home flexibility consistent across geographies
Case study: HyVee & Marianos and Kroger exploring hybrid retail and foodservice concepts
Generational attitudes sever the link between socialising and drinking occasion
Case study: The New Bar and alcohol free on-premise occasions
Case study: Ranch Rider and Spindrift differentiate via ingredient quality in US seltzers
The loss of social occasions contributes to rising social isolation and loneliness
Case study: Chatty Café Scheme and Kletskassa lanes aim to counter community loneliness
New priorities shaping our occasions: Values, identity and time with family and friends
Case study: Family, connection and nostalgia characterises beverage marketing in 2023
A new geography of beverage occasions, as populations, priorities and values evolve
New beverage routines are being established around five important pillars
Pillar 1: Maximising affordability by balancing price, pack and channel mix
Case study: Coca-Cola Value Collection and price/package/channel optimisation strategy
Pillar 2: Reigniting experiential beverage consumption, both physical and digital
Case study: Australian Treasury Wine Estates targets consumers with AR experience
Pillar 3: Creating “shareable” and buzz-worthy beverage ingredients and brands
Case study: Ocean Spray and Campari among the beverages boosted by viral moments
Case study: Starbucks Japan utilises bright, visual ingredients to boost online buzz
Pillar 4: Generating community-based drinking occasions
Case study: Heineken campaigns to reach gamers, avoiding stereotype and cliché
Pillar 5: Function and wellness culture is creating new occasions for beverages
Case study: Athletic Brewing becomes a success story by crafting a “wellness” brand
Case study: Sentia and the possibilities of alternative hero ingredients and need-states
The five pillars of the future beverage routine
Key takeaways (2)
Shifting habits: How to adapt
Evolution of shifting habits
Questions we are asking

Soft Drinks

This is the aggregation of the following categories; Carbonates, Fruit/vegetable juice, Bottled water, Functional drinks, Concentrates, RTD tea, RTD coffee and Asian speciality drinks.

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