Alcohol Consumers’ Interest in Health and Wellness Will Continue to Increase, Says Nielsen
By Thomas Pellechia, Contributor
January 5, 2020
In liquor, grocery and big stores (off-premise) for 2020 Nielsen CGA expects the younger generation will lead the health and wellness charge and that will make an impact on which beverage alcohol is preferred and at which quantity of consumption. These same consumers are expected to seek “transparency in labeling” and “product innovations.”
Nielsen predicts spirit sales will grow the most at liquor stores and other outlets in 2020: whiskey, tequila, cognac, ready-to-drink/prepared cocktails and vodka, especially the top-selling Tito’s Handmade Vodka. Premium and ultra premium segments will lead. At the same time, however, the data company says a large segment of consumers will be looking for less alcohol by volume (ABV) (how spirits producers in the high-end category can accommodate that is a mystery).
Low alcohol beer is expected to be in greater demand in 2020, right down to no-alcohol at all. Nielsen predicts a flood of alternative beverages, like seltzers, many which will offer low sugar and no carbohydrates. Nielsen also believes the heated hard seltzer market of last year will heat up even more this year—it will double. Therefore, for 2020 the beer industry is expected to focus on everything but beer: more big beer company acquisitions, including in spirits and in a select group of growing wine segments. The expectation is that brewers of all sizes will invest in ready-to-drink cocktails and other spirits in 2020. Hemp infusions are on the horizon too.
According to Nielsen, table wine sales will decline, especially in the lower-priced wine category, but only as long as the economy remains strong. Growth in wine will continue in Prosecco and Rosé, but not by double digits. New Zealand and Oregon, as well as Eastern European wines may provide the buzz for 2020, and cans and other alternative packaging (aluminum resealable bottles) will grow. Nielsen sees a good year ahead for canned wine spritzers and wine cocktails. Finally, the health and wellness as well as low ABV trend will hit wine as well, so we should expect more wine-based products making those claims.
Much of the same trends predicted for off-premise retailers are expected to guide beverage alcohol sales in restaurants, bars and hotels (on-premise). Because it falls right into both the spirits and the mixed drinks trend, Gin and Tonic may make a splashing comeback at the bar in 2020, alongside sugar free flavored vodka to quench the wellness thirst. Further, growth in on-premise low or no-alcohol cocktails appears on the horizon. The data company also expects product innovations in the whiskey category for 2020.
Local beer will be in demand on-premise, but Millennials are expected to move into hard seltzers. As it is off-premise, on-premise demand for table wine is expected to decline; in response to that decline, Nielsen expects a wave of wine-based products with innovative packaging and marketing aimed at newly minted legal drinking age consumers, Generation Z.
How else will the industry appeal to Generation Z? From a press release regarding the Nielsen 2020 predictions: “Game bars, authentic experiences from other global regions, seasonal activities and elevated hotel bars will continue to attract and engage American bar goers.” as will “…iPad menus, more seamless, tech-driven payment options and even educational experiences through augmented reality.”
As beverage alcohol e-commerce continues to grow, Nielsen predicts 2020 will represent a turning point in the beverage alcohol distribution industry. Taking advantage of shifting state alcohol regulations to address online shopping for alcohol, and noticing that impulse purchasing is declining at off-premise locations, beverage alcohol distributors will invest heavily in marketing on the Internet.
What could upset these predictions? Perhaps the economy turns south; perhaps trade wars; perhaps shooting wars; perhaps something else. The point being, these are predictions based on the past year’s experience and current trends—but in this technology-driven universe, what happens in one year can be like a lifetime of changes.