While focussed on USA sales trends Nielsen has been tracking a move toward “healthier” drinking, and this trend will continue into 2020. Younger generations are leading this shift, and it will affect drinking quantities and preferences. Consumer desires will also drive more transparency in labelling and supplier product innovations.
The same trends are clear in Australia, where data released by the Australian Bureau of Statistics shows alcohol consumption in Australia has reached its lowest point since the early 1960s, having declined steadily since the mid-2000s. Survey data suggests this decline has been driven almost entirely by reductions in youth drinking.
In Australia, brands are doing their best to innovate and create fresh twists on classic drinks to stay competitive but alcohol consumption at the individual level is stagnating.
Consumers are increasingly choosing quality over quantity in order to make an experience of their alcohol consumption. They’re seeking clarity and demanding higher standards around sustainable manufacturing processes, carbon footprints, eco-friendly packaging and more
According to the Neilsen Report on beverage consumption, going into 2020, expect to see growth in the following:
- Spirits/cordials that are lower alcohol by volume
- Low-alcohol ready-to-drink cocktails
- More alternative beverages with no/low sugar and carbs, and low-calorie options
- A greater selection of low-alcohol and non-alcoholic craft beers, with major craft brewers starting to play in this space
- Active, lifestyle-oriented drinks that tie into consumer interest in their active routines
Spirits will drive the most consistent growth
Building on an already upward trajectory, spirits will experience the most growth from whiskey, tequila, cognac, ready-to-drink/prepared cocktails, vodka and gin. Premium and ultra-premium segments will continue to lead the category’s growth, at the expense of lower price tiers.
Spirits have the advantage of a versatile product range with multiple drink types, flavours, styles and mixing opportunities—meeting the desires of the cocktail culture, and appealing to a broad consumer base (age, gender and race/ethnicity).
Growth in the beer industry will focus on nearly everything but beer
Expect to see more acquisitions—particularly by big beer companies—in spirits and some selected growing segments of wine. Brewers of all sizes will invest and innovate in ready-to-drink cocktails—and even traditional spirit products.
Craft beer will continue to find success with styles found in more traditional beer segments.
Hard seltzer’s growth will be supplemented by hard beverages of other types.
Hard seltzers, or alcoholic sparkling water, has yet to take off in Australia, but Nielsen is projecting worldwide the number of players in the hard seltzer space will double in 2020, adding products from big brewers/mainstream brands, craft brewers and spirit companies.
Additionally, we will see an increase in sub-segments of hard seltzers, focused on attributes like higher alcohol-content, healthy ingredients and features, bolder flavours, and heightened product development and innovation around hard kombucha and hard coffee.
The introduction of so many new brands by new players, along with the introduction of new flavours, packaging and formulas by existing players, will help to fuel growth.
Table wine sales will struggle
Table wine sales will decline as long as the economy continues to be healthy, with the biggest losses coming from lower-priced wine in bottles.
Pockets of growth in wine will including the following:
- Sparkling wine, driven largely by Prosecco
- Rosé, though growth is unlikely to be more than single digits
2019’s leading indicators into the future of alcoholic beverages will kick into high gear in 2020. From the continued rise of hard seltzer and ready-to-drink cocktails to the stability of sparkling wine, alcoholic beverage players have their work cut out in keeping pace with a consumer base whose choices are often motivated by health and convenience.