5 key trends in the alcohol industry in 2021, according to the IWSR

International Wine & Spirits Research (IWSR) is a leading organisation analysing the global alcoholic beverages market. In the latest announcement published on the organisation's website, IWSR assesses the key trends that will shape the global alcohol industry in 2021.

The agency collected its conclusions in five categories:

1.      Home consumption and online sales

Restrictions caused by the COVID-19 pandemic have increased the popularity of drinking at home and forced distributors to switch to online sales. According to IWSR data, the value of alcohol e-commerce in 10 key markets increased last year by approx. 40%. This increase was clearly related to a pandemic - in the US, 44% of online alcohol buyers did not start doing it until 2020. Sales channels are expected to continue to evolve in the near future. Consumers have gotten used to and liked the new sales channel, so brands will have to adapt their strategies to the new habits of their audience, taking into account a larger share of online sales.

2.      Premiumisation

The pandemic contributed to the acceleration of the premiumisation trend, i.e. the trend of consumers towards more and more expensive and better-quality alcohols. However, IWSR points out that brand owners will need to adopt a thoughtful and strategic approach to capitalise on this trend, depending on the country, sales channel, and audience demographics.

We will probably observe three key trends in 2021:

·        Continuation of premiumisation: despite the impact of the pandemic, some consumers, especially in developed markets, were able to make big savings as a result of the blockades - spending on commuting, going out and vacationing fell. Premiumisation will continue in these markets.

·        A shift towards tried and true brands: consumers whose incomes and savings have declined significantly in the wake of the pandemic are likely to avoid experimentation and high spending.

·        Trade slowdown: in countries significantly affected by the economic effects of COVID-19, it is likely that some consumers will reduce their spending on non-essential goods.

3.      The impact of the policy on the alcoholic beverages market

The industry will focus on shifts in leadership, diplomatic relations and legislation.

·        The new US president is likely to return to the policy of protectionism. The key question becomes whether the new administration will change the existing import duties on alcoholic beverages.

·        Changes in relations with China and changes in trade policy will continue to impact the global landscape of the alcohol industry.

·        Brexit arrangements will be crucial for the situation in Europe. Trade flows and alcohol labelling and labelling rules in the EU will affect the Scotch whisky industry in particular.

·        Governments can also review laws governing the e-commerce of alcoholic beverages - for example, liberalising currently restrictive laws in large markets such as Russia and India could have a significant impact on brand strategies.

4.      Greater importance of RTD (Ready to Drink) category

The consumer convenience trend and the evolution of the global ready-to-eat (RTD) category will continue to expand. It is clear that the popularity of these types of products will continue to grow as consumers seek beverage options with a lower alcohol content. Convenience is a key part of go-to-market strategies and distribution channels, especially in countries such as Japan, the United States, Mexico and Brazil. In 2021, the market will be driven by the search for innovation and discovering new tastes by consumers.

5.      Low-ABV and no-ABV trend

Non-alcoholic or low-alcohol products will attract more and more consumer interest. 2020 has cemented these categories, and growing consumer awareness of health and wellness will drive them in 2021. In the past, the consumption of non-alcoholic and low-alcohol products was almost stigmatised, while now the category has become aspirational and consumers are increasingly willing to pay higher price for non-alcoholic and low-alcohol products.

Source: www.theiwsr.com