2018 Beverage Alcohol Trends

May 18, 2018 In Latest News

Earlier in the year, we shared (cautiously) our ‘way-too-early’ predictions for 2018 beverage alcohol trends. Now that we’re into Q2, though, some patterns in sales and consumption have started to emerge, and we have recalibrated our predictions with the data and findings we have seen so far.

Read on to track what is growing and slowing in popularity across three top beverage alcohol categories.

Beer

Growing

  • Spiked seltzer stays strong in the market. The trend, which is attractive to lighter and often health-conscious drinkers, has been picked up by Smirnoff. This year, they released a Raspberry Rosé seltzer, which joins a family of other fruit-forward flavors. As the summer heat bares down, expect these lighter drinks (which weigh in at between 4% and 6% ABV) to sell.
  • Cans and ‘crowlers’ are growing as the preferred way to get craft beer from brewery to fridge. As beer drinkers opt for the freshest way to take their favorite beers home, crowlers — a large format, canned in-house container — are appearing at many breweries. The canning process keep beer fresher than a growler, and gives smaller-market breweries a still-somewhat-novel way to get their beers into customers’ homes. In the same market, 4-packs of cans (especially 16 oz. cans) are growing in popularity.

  • Local beer is still a huge and growing market. Breweries continue to pop up around the country, attracting hyper-local clientele who opt to stock their fridges with the crowlers and 4-packs of cans we mentioned. Between 2016 and 2017, the number of craft breweries in the U.S. grew by 15.5%, and microbreweries grew by 19%. including Big beer brands are seeing shipments drop: Budweiser dropped nearly 7%, Bud Light nearly 6%, Coors Light down 4% and Miller Light down around 3% as beer drinkers reach for craft beers made locally, or move into other categories.
  • Light beers are still a popular category, despite the drop in shipments from staples like Bud Light, Coors Light and Miller Light. Consumers are turning instead to Mexican imports (Modelo, Tecate), craft beers with a lighter feel (session ales and lagers), and low-calorie beers (Michelob Ultra, which saw a 21% sales increase in 2017). This fits in with the millennial and consumer trends toward healthier eating and drinking. Michelob Ultra and Tecate have also recently started selling 7 oz. cans, which are more attractive for daily drinking and cater to the calorie-aware audience.
  • New England-style “Juicy” or “Hazy” IPAs are overtaking more the traditional West Coast variety. These beers are classified by being “juicy” and “hazy”. They have strong flavors and aromas as well as a hazy head that comes from not filtering or pasteurizing the beer. The growth has been huge: breweries big (Sam Adams, Sierra Nevada) and small have added New England or “hazy” IPAs to their offerings. In March, the Brewers’ Association officially added this style to their Beer Style Guidelines.
  • Fruit-flavored, gose and sour beers continue to grow, especially as we head into warmer months. Various breweries are experimenting with these refreshing flavors that attract drinkers from other categories. From tart sours to salty goses to light lagers with hints of raspberry or watermelon, funky and fruit-forward beers are popping up from smaller breweries. MillerCoors also released a fruit-focused beer, TwoHats, which comes in lime and pineapple flavors, to meet this new market of drinkers.

Slowing

  • West Coast-style IPAs and hop-forward DIPAs could see a decline as the New England style grows. These distinct, more traditional IPA styles are brewed with more neutral yeast strains which produce the bitter IPA taste. Consumers are becoming more interested in IPAs that highlight flavors beyond bitter and hoppy, contributing to the slow in popularity. Similarly, as larger breweries jump in to hazy, fruit-forward IPAs, the hoppy West Coast and DIPA styles may take a back seat.
  • The beer industry overall looks to be slowing down. While local breweries have stayed fairly strong, the mega players of AB InBev, Molson Coors (which owns MillerCoors) and Heineken have all posted lower beer volume as compared to Q1 of 2017. The growth of other categories, which we dive into below, has pushed beer sales down as traditional beer drinkers turn to wines, liquors and cocktails.

Wine

Growing

  • Rosé continues to grow in popularity: sales grew 40% in 2017, and one of every 36 bottles of wine Americans drank in 2017 was a rosé., It’s also spreading through other categories, as pink gin (e.g., from Beefeater) and rosé cider (e.g., from Angry Orchard) move in. The popularity is also allowing lower-quality (and lower cost) products to saturate the market, which attracts a wider range of buyers. But the trend doesn’t skew toward one price point over another yet. High-quality rosé like Whispering Angel — which accounts for about 20% of Provencal rosé sold in the U.S. — is still incredibly successful in the market.
  • Canned wine is slowly growing in both production and consumer favor. Many believe the single-serve vessel could introduce wine-drinking to different parts of the day and different activities, like those many associate with beer. Cans are both smaller in volume, meaning consumers don’t have to finish a full bottle of wine in one sitting, and easier to pack for a picnic or outdoor activity. The market for cans is still being figured out, meaning there will be a lot of room for growth and innovation.
  • Organic wine is also growing. Though it accounts for less than 5% of wines in the U.S. market, the category grew between 10% and 20% per year from 2013 to 2016, and the number of organic vineyards worldwide tripled. Similar to natural wines, organic wines will continue to benefit from the shift to more health conscious and natural food and drink consumption.
  • Natural wines are seeing a boost in the market, riding broader trends in natural foods. These wines are made through natural processes and without additives; they don’t necessarily use certified organic grapes, which is what separates them from the organic category. A recent Mintel study found that 60% of millennials and 55% of Gen-Xers are concerned about harmful ingredients in their food and groceries. With millennials making up 36% of wine drinkers and Gen-Xers more likely to spend more money on wine, it’s no wonder this trend has found tread.

Slowing

  • Prosecco, while still very popular, is slowing its growth. In 2017, year-over-year shipment volume increased 4.6%, while in 2016, year-over-year shipments had increased by nearly 20%. While still a popular choice among sparkling wines, prosecco seems to be reaching its market saturation point. Consumers are starting to spread out in the category, opting for Champagne, cava and other domestic sparkling wines at similar rates.

Spirits

Growing

  • Premium and ultra-premium tequilas grew 8.5% in volume in 2017, and will continue to take over the market. Major suppliers (like Diageo and Pernod Ricard) are investing in craft and small-batch tequila brands, helping them to reach wider consumer audiences. These investments have paid off. Between 2015 and 2016, case shipments of Espolòn, an independent tequila brand, grew 40% while case shipments of Casamigos, George Clooney’s brand which was bought by Diageo, grew 24%. This is compared to mega-brand staples like Jose Cuervo and 1800, which saw case shipments grow by only 4.6% and 1.4% respectively in the same time period.
  • Flavored and unique gins are increasing in popularity. Current gin distillers big and small are experimenting with different gin expressions, going beyond 100% Juniper. Some play with flavors, like Barr Hill’s honey gin and Monkey 47’s gin with Black Forest berries, while others experiment with different strengths and hues. Beefeater released a pink gin that was infused with strawberries, hitting both on a summery flavor and the popular trends of rosé and millennial-pink.
  • Special-edition whiskeys are also popping up in the market, especially among big-name brands. These are whiskeys (and occasionally other spirits) that are most often small-batch, created with more experimentation or aged differently than the standard offerings. Both Maker’s Mark and Jameson have recently announced special-edition whiskeys, created from a unique barrel and cask aging process respectively. This process takes after small craft distilleries, who create smaller-batch liquors by nature and are often more open to interesting experimentations to share with loyal drinkers.

  • Bourbon continues to dominate the spirits market as the “Bourbon Boom” lives on. The bourbon industry as a whole has seen growth: in 2016, bourbon and American whiskey sales topped $3 Billion. Maker’s Mark, Knob Creek and Jim Beam all saw sales growth (by volume) of more than 8% from 2016 to 2017. And in 2018, multiple bourbon distilleries have reached barrel-fill milestones — Heaven Hill filled their eighth-million barrel of bourbon, Buffalo Trace filled their seventh-million, and young distillery Evan Williams filled their one-thousandth. You can also look at the many new bourbon releases (including those special edition whiskeys we mentioned earlier) and high-profile celebrity partnerships (like Wild Turkey’s collaboration with Matthew McConaughey) as signs that the bourbon market shows no signs of slowing down quite yet.

Slowing

  • Flavored whiskeys are slowing down in the market. Honey whiskeys, among other flavored varieties, grew a lot between 2011 and 2015. In 2017, however, growth slowed: Jack Daniels’ Tennessee Honey grew less than 5% last year. It’s possible that flavored whiskies were riding the Fireball trend, creating an offering that attracted more casual whiskey drinkers. Going forward in 2018, it looks as though more special-edition cask and barrel strength whiskeys will overtake the category.

Keep an eye on these beverage alcohol trends as the year goes on and see how they manifest in your store. As summer approaches, look for rosé ciders, hazy IPAs and canned wines to bloom. Keep your shelves stocked with natural wines, unique gins and special-edition whiskeys as more and more explode onto the market. We’ll check in again next season to see what will stay hot and what will cool down going into fall.

 

 


 

Original Post (January 25)

2018 Alcohol Consumer Trends
Alcohol beverage trends are making their way into the market, so we’re trying to predict the course of consumption and sales for 2018.

Many predictions are escalations and iterations on actual trends from 2017, like:

  • Crowd-pleasing wines: Consumers continued to buy palatable, bold flavored wines like rosé and blends and whites.
  • Boozy Sodas: Sales spiked for these products, from hard root beer to spiked seltzer.
  • Flavor exploration: Exploration of creative drink options, from craft-built cocktails to alternative Moscow Mules.
  • Close-to-home products: Shoppers stayed local this year, supporting neighborhood breweries, wine and spirit makers.

But it’s far too early for these predictions to hold any real weight—as Q1 has barely begun, and sales data isn’t yet statistically significant.

Retailers should take 2018 trends predicted at this point in the year with a grain of salt.

Here are seven way-too-early trends that have been predicted for 2018, as well as ways you can monitor their true impact on your sales.

1. Craft beer will continue to explode

Craft Beer Consumer Insights

THE TREND: Craft beer will continue to explode. The world of craft beer has been booming for several years, and 2018 will continue its exponential growth. From diversifying flavors of IPAs to revisiting lagers, stouts, and other classic beer styles, predictions show that craft beer isn’t dying out anytime soon.

KEEP AN EYE ON: Beer sales and requests. As the year progresses, watch to see what your customers are buying and asking for. If you see sales of big beers—like Budweiser, Coors and Miller—fall, it may be an opportunity to invest in craft and local beers.

2. Local-first Wines, Liquors and Beers

Wine Drinking Insights

THE TREND: Local-first wines, liquors and beers. Expanding on the first too-early 2018 trend, it is predicted that local-market alcohols will grow their market share this year. Local distillers, vintners and brewers are taking pride in their home, crafting with regional ingredients and neighborhood flare.

KEEP AN EYE ON: Newcomers to the market. Watch local market trends, including within your own store, to see what begins to boom in your area. Are customers leaning toward smaller, more obscure brands? If so, adjust your stock to incorporate products from local makers.

3. Mixers going natural

Sales Data on Cocktail Mixers

THE TREND: Mixers going natural. The syrupy sodas of the past are being replaced by high-quality, more natural mixers. Brands like Fever Tree have seen a huge jump, showing that tonics and sodas with simple, readable ingredients may take hold this year.

KEEP AN EYE ON: Ingredients. If your store carries mixers like tonic, ginger beer and soda, keep an eye on the ingredients different brands contain. The cleaner and more simple high-quality mixers will attract young buyers and increase basket prices.

4. Bubbles over ice

Sparkling-Wine-Insights

THE TREND: Bubbles over ice. Bubbly is predicted to fizz up in 2018, with producers of prosecco, cava, and champagne creating iterations of their wines to be served over ice in the Italian fizz style. This follows upticks in interest for alternative sparkling wines, like Rosé.

KEEP AN EYE ON: Sparkling wines at all price points. While the top tier producers are creating fizz-able wines, there will likely be a jump in more affordable brands. Watch what your customers trend toward to help them make the jump to the top tier versions.

5. Experimenting with Whiskey Flavors

2018 Whiskey Consumption Trends

THE TREND: Experimenting with whiskey flavors. Growing from traditional Kentucky bourbons and other basic profiles, 2018 will bring a new wave of whiskeys with unconventional ingredients. Distilling with grain mashes beyond ryes and corns, adding other spices or aging the spirit for varying time periods will all contribute to a renaissance of whiskey flavors.

KEEP AN EYE ON: Your customers. Are they moving away from buying middle-shelf Kentucky bourbons, or asking for more spicy, flavorful whiskeys? These observations will help you understand what is selling and how to balance your whiskey inventory.

6. Bitter Cocktails, Led by Vermouth

2018 Cocktail Drink Trends

THE TREND: Bitter cocktails, led by vermouth. As craft cocktails continue to rise in popularity, drinkers will return to the classics: gin and tonics, Manhattans, Negronis and the like. Vermouth, both sweet and dry, is predicted to grow in popularity to foster this trend.

KEEP AN EYE ON: Vermouth varieties. Sweet and dry vermouths make for a variety of cocktails, classic and creative. Make sure your store carries both, and watch the market to see how different varieties are selling in conjunction with spirits. This will help you see what cocktails people might be making, and enhance your in-store displays.

7. Pop the Prosecco

Prosecco Consumer Trends

THE TREND: Pop the prosecco. The Italian bubbly, often more within reach than the French Champagne, saw a lift in sales last year. Because it’s more accessible, people are choosing to drink it more often than just at big events.

KEEP AN EYE ON: Sales and requests for bubbly. Track the purchases of prosecco in your store to determine how regularly it sells. Display it in-store as an alternative to the more expensive options, and see how your customer’s behavior changes.

As predictions continue to shift and solidify throughout the year, remember that the most important trends are those happening at the register level in your store. Don’t neglect your customer and sales data: following actionable insights over potential market trends and listening to your customers rather than large-market panels will help you make data-backed decisions that increase revenue.