Over the past eighteen months, it is safe to say that nearly everything in the world has changed in some way. Thanks to the ongoing Covid-19 pandemic, there have been significant shifts within the alcohol industry. The way that Australians consume alcohol has changed significantly, causing unanticipated shifts in consumption, and accelerating other trends. But what are these changes? And how has the alcohol industry adapted to meet them and continue to thrive?
Early 2020 alcohol trends
Before the pandemic, certain trends were already emerging which would take true hold over the following year. For example, social media influencers were already promoting alcohol across their various channels, allowing companies to reach a new, younger demographic. However, at the same time, a newly vocal community of “soberistas” were popping up, who were thirsty for the drinks they loved, but in non-alcoholic versions. We've talked more about this trend to low and no drinks here.
Premiumisation was also in full swing, with brands marketing their drinks as something sophisticated, with a certain kind of lifestyle attached. A range of new blends, flavours and ways of drinking brought gin and rum from out of vogue to in the spotlight.
How would the pandemic impact these trends? Time would surely tell.
As Covid-19 hit, so did a then-unfamiliar term - lockdown. You were told to work from home, asked to remain indoors as much as possible, and bars, restaurants and pubs all became off-limits in an effort to slow and stop the spread of the Covid-19 pandemic. While the usual “new year, new you” health and self-care trends were beginning to wane, those in the alcohol industry wondered what this meant for overall alcohol consumption.
Initially, it of course meant a (temporary) end to the usual places that alcohol is primarily sold. Until this point, most people were doing their drinking with friends while socialising in bars, clubs, pubs and restaurants. Now it became necessary for consumers to rethink their drinking strategies.
Drinking at home
During this time, more and more people took to drinking at home rather than out and about as this was the only option. More alcohol was sold in supermarkets than before, however, it also became more popular to have alcohol delivered to your door. This boom in alcohol delivery is a trend that has remained popular, giving people the freedom to order alcohol like they might their favourite meal. In fact, online sales of alcohol represented the fastest growing area in the entire industry, as people enjoyed their favourite cocktails and alcoholic beverages in the comfort of their own homes.
The end of pubs and bars?
While recurring lockdowns have put a stop to bar culture thriving in the way that owners of these establishments might hope and expect, there is no reason to think that this will be the end of pub and bar culture. Nightlife will return, though there will likely be some restrictions in place, and natural caution may reduce the overall amount that people are willing to relax and let their hair down. While the return may be slow, it is reasonable to imagine that bars will once again make up a large amount of the alcohol industry’s overall revenue, even if it is more evenly balanced with those who wish to keep drinking primarily in their own homes.
The alcohol industry has suffered from a hit to its overall growth during 2020. While some of this can be attributed to there simply being fewer places for consumers to go out and drink, part of it comes down to the economic impact of Covid-19. Consumers have, in many cases, been left with a reduction in their disposable income. This also encourages spending more time in the home environment, even at times when lockdowns have been eased considerably.
Not everybody has been looking to indulge across the past eighteen months. Millennials and Gen Z have been leading the charge in conscious consumption, both in the case of wanting ethically sourced products and often deciding against drinking altogether. Those who do drink often opt for low-alcohol options.
Not only this, but spending more time at home has led many to adopt healthy new lifestyles where no alcohol is consumed, either for physical or mental wellbeing reasons. This has actually opened up a whole new market to the alcohol industry, which has pivoted to produce more and more non-alcoholic options that still have the taste and sophistication of their alcoholic counterparts. A cocktail made with a non-alcoholic rum can be priced similarly to the alcoholic version while appealing to a young, fun, but sober or sober-curious demographic. It's this same demographic that's driving a push toward indigenous botanicals.
One thing that everyone has become familiar with during lockdowns is boredom. This has only driven the increase in premiumisation - a trend that has been growing for years now. From the popularity of gin blends to the growth of interest in tequila, those consuming alcohol are now interested in drinks that mix sophistication and the aforementioned ethical and conscious consumption.
What comes next?
While the Covid-19 pandemic will not last forever, the lasting impact of these changes will be felt by the alcohol industry for a long time to come. Though more growth is anticipated as lockdown restrictions ease fully and life returns back to “normal”, it is a strong possibility that the way people consume their favourite alcoholic beverage has been altered for the foreseeable future, if not permanently.
A combination of a focus on healthy living and introspection encouraged by the pandemic, a reduction in comfort with going out to hospitality venues, and an emphasis on spending time at home with family rather than going out, has definitely placed an emphasis on online sales and home consumption that is unprecedented. Going forward, this is very likely to be seen as far more normalised, even as society returns to normal.
Are you concerned about how the new trends in alcohol consumption could impact your company and what you have to offer? iGo has the answer for you, helping you to promote and market your company to help you reach your target customer, and provide your staff with a diverse range of staff rewards. With iGo, you can embrace the new world, whatever happens next.