Let’s talk booze.
These are fun and exciting, albeit challenging times, to be in the alcohol industry. According to Statistics MRC, the global alcoholic beverage market accounted for $1324.1 billion in 2017, and is expected to reach $1864.2 billion by 2026, with a compounded growth rate of 3.9% during the forecasted period. High growth in emerging economies, high disposable income, and the rising spend in exploring new entertainment options are a few factors contributing to market growth in the sector.
Let’s face it, everyone and their mom went through that phase of drinking boxed rose and €5 necks of vodka (hey, it gets the job done, not judging). However, recent studies show that cheap beer and liquor have been taking a hit. According to Forbes, the “consumption of the Buds, Millers and Coors of the world slipped to 49.59% of the market, a two-point decline that showed up directly as an increase to craft share (35.9%)”.
What does this mean? It means, people, particularly younger people, are being pickier than ever when it comes to their drink of choice for the evening. Along with craft beers, hard alcohol and premium beers like Michelob Ultra, are experiencing a rise in popularity even though overall alcohol consumption in terms of volume is on the decline. The shift in taste from beer to hard liquor, growing health concerns leading to a rise of low-calorie and alcohol-free beer, and premiumization, are the top trends affecting the alcohol industry to date. With the ever-changing landscape of the alcohol market, especially now in the digital ages, it’s important to keep your brand up to date and relevant with your audience's new lifestyles and desires.
I’d like to focus the attention of this article on the drinking habits of millennials, not only because I fall into this bracket myself (okay fine, I'm a late Gen Z), but because this group’s habits are extremely interesting, and they’re also the group responsible for changing the the alcohol marketing landscape. I found this chart on Nielsen.com “Boomers and Millennials--Think Different, Drink Different”, which sums up our habits compared to the generation before perfectly.
If you're a brand whose target market is dominated by a younger generation of drinkers, listen up! Just as we don't hesitate to pay more for high-quality foods, we also don't hesitate to pick a trendier, higher-quality wine or spirit. According to the Wine Market Council, 17% of millennials paid over $20 for a bottle of wine compared to 10% of the general population.
Quality over Quantity!
Now I know this is only a one point about the younger generation's drinking habits, but there’s a lot to be taken from this. We have an appetite for new and exciting products, as opposed to any of the previous generations. We not only buy quality products that are advocated by all of our friends, we seek adventure and experience.
To dissect this point further, I'd like to offer a scenario in which you had a choice to either pick between a new craft gin that just hit the market, versus a cranberry vodka. The new gin has done a great job on it's marketing, both online and offline, sharing how to best drink it (gin and tonics would be my recommendation), how it's made, where it came from, it's USPs, etc. With it's witty and creative content, along with paid ads, the brand managed to turn bartenders into brand ambassadors and customers into brand advocates. No longer is it just a gin and tonic, it's an experience in itself.
This leads me to my final and most important question:
Is your brand creating an experience?