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Decoding the Latest Alcohol Purchasing Trends: Insights from the Numbers

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Decoding the Latest Alcohol Purchasing Trends: Insights from the Numbers

A new report by Kantar indicates that while bars and restaurants have reopened in the aftermath of the COVID-19 pandemic, the consumption of alcohol at home continues to rise while on-premise drinking continues to fall. The report suggests that other factors, such as inflation, are also having an impact on the shifting alcohol market, in addition to the pandemic.

According to the report titled “Shopping for Beverage Alcohol,” 23% of consumers drank more alcohol at home over the past year, compared to 16% who drank more on-premise. However, the report also found that consumers are generally cutting back on alcohol consumption, with 21% reporting drinking less at home over the same period, compared to 25% of those who drink at bars and restaurants.

 

According to a study by Kantar, shoppers are consuming more alcoholic beverages at home than at bars, even after the pandemic, and cutting back on premium drinks because of inflation.

Renata de Moura, Senior Director of Shopper and Category Insights at Kantar, stated that consumers are buying and consuming more alcoholic beverages at home due to inflation impacting their purchasing power.

The report surveyed 2,000 consumers over the age of 21 who had purchased alcohol in the past three months, with millennials (38%) being the largest age group surveyed and Gen Z (8%) being the smallest.

The study also found that shoppers are reducing their spending on premium alcoholic beverages outside of their homes and instead are purchasing cheaper alternatives for in-home consumption. This trend is expected to continue as the impact of the pandemic on consumer behavior persists.

As a result, retailers and manufacturers are expected to continue adapting to these changes in consumer behavior, such as by offering more affordable and convenient options for in-home consumption.

Less is more

Consumers, particularly Gen Z and millennial age groups, are not only reducing their alcohol consumption but are also increasingly opting for non-alcoholic alternatives. In the last 12 months, 21% of Gen Z and 18% of millennials bought non-alcoholic beer.

When drinking at bars, 21% of consumers indicated that having a non-alcoholic option significantly contributed to their overall satisfaction. The trend can be attributed to the rising demand for healthier options.

Younger shoppers are increasingly seeking healthy drinks that are free of harmful ingredients, low in carbohydrates, or have a reduced sugar content.

“People are looking for healthy drinks, especially young shoppers. They’re looking for alternatives that are free of some ingredient that is not good for them, are low carbs, or have a lower sugar content,” stated de Moura.

Consumer interest in nonalcoholic options appears to be mixed, with some showing enthusiasm and others remaining hesitant.

According to a recent survey, 45% of consumers are not interested in switching to nonalcoholic options, while 12% have already made the switch.

On the other hand, 29% of consumers expressed interest in purchasing nonalcoholic products, but 15% indicated that they were interested but unlikely to buy.

Despite the mixed outlook, experts believe that the nonalcoholic trend is here to stay and has significant potential. The trend is driven by sophisticated flavors and configurations that appeal to a wide range of consumers, from those looking for healthier options to those seeking new taste experiences. As Leigh O’Donnell, head of shopper and category insights at Kantar, points out, nonalcoholic options offer a sophisticated alternative without the calories or cost of alcohol, making them appealing to a broad range of consumers in both home and hospitality settings.

 

Time and place

 

The alcohol market is undergoing a shift in terms of what consumers are purchasing and why. Hard seltzers and ready-to-drink (RTD) cocktails are becoming popular alternatives to traditional alcoholic beverages.

The increase in drinking at home may be one factor behind this trend, as consumers seek convenient and cost-friendly options.

According to a recent survey, 33% of consumers are now buying hard seltzers instead of other alcoholic beverages, while 37% are purchasing RTD cocktails.

Other beer alternatives, such as soda-mixed drinks and hard coffee, are also gaining traction, with 58% and 49% of consumers already buying or interested in buying these products, respectively.

The rise in consumer interest in alternative alcoholic beverages could be due, in part, to the growing influence of mobile devices. Mobile technology is making it easier for consumers to discover and purchase new products, and this is leading to a greater interest in experimentation. As consumers become more comfortable using mobile devices to research and purchase products, they are more likely to try new and unusual alcoholic offerings.

This trend is likely to continue as mobile technology becomes even more integrated into the shopping experience.

According to de Moura, social media is one of the key drivers of the increase in sales for beverage alcohol. Shoppers are turning to platforms like TikTok for recipe ideas and inspiration, which in turn is encouraging them to seek out new and innovative options for their drinks.

While innovation is certainly a factor in driving sales, it’s not the only one. Occasions are also playing a significant role in the purchasing decisions of consumers across all categories of alcohol, including beer, wine, and spirits. In fact, a recent survey found that 33% of consumers bought at least one of these categories for an occasion, which is higher than any other category.

This trend could have implications for marketers that rely heavily on on-premise consumption or alcoholic beverage brands that do a significant portion of their business through bars and restaurants.

As more people are celebrating at home or only drinking on special occasions, this trend may result in less regular business for alcohol marketers. In order to overcome this shift, it’s important for marketers to embrace experimentation and cater to the interests of consumers. By doing so, they can better position themselves to weather the storm and remain relevant in a changing market.

 

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