Trend 1: Shifting shopper behaviors
In 2023, we saw more BevAl consumers shopping their values, from putting their dollars behind local products and LGBTQ+ initiatives, to opting for more moderate consumption and non-alcoholic options.
In 2024, convenience, wellness, and sustainability trends should be top of mind for BevAl brands, including:
- Friction free retail on a new level — 44% of BevAl shoppers note that speed and efficiency are the most important factors to them at retail.
- Sustainability and authenticity recruiting new consumers to brands — 92% of consumers say sustainability is important to them when choosing a brand.
- Proliferation of “wellness” and functional beverages — especially Non-alcoholic beverages, which are becoming a bigger part of the consumer mix.
- Quick-serve restaurants and neighborhood bars will be the dining outlets to beat in 2024. In 2023, these outlets lead channel growth (up +7.0% and +3% respectively).
For the full deep dive on this trend—including which convenience, health, and sustainability claims rose to the top for consumers in 2023, and an analysis of how non-alcoholic beverages are gaining sales across Beer, Wine, and Spirits — check out the webinar.
Trend 2: Dynamic Demographics
BevAl consumers are approaching the category in new ways. As Gen Z (21+) matures and shifts attitudes towards alcohol consumption, “the graying” of America will shift consumption habits for older consumers—all of which will impact BevAl sales in the new year. Brands also need to account for a more diverse and multiracial America in 2024 and beyond.
In 2024, these are the demographic trends to keep an eye on:
- Attracting Gen Z (21+) consumers will be very important for BevAl brands in the on and Off Premise channels, but several challenges come with that demographic—45% of of-age Gen Z consumers have never consumed alcohol (in other demographics roughly a third of consumers have never consumed alcohol). They’re also more likely to adopt low or-no alcohol. On Premise engagement with Gen Z (21+) is unique and represents significant experiential incremental dollars in 2024.
- More Baby Boomers (who account for 36% of BevAl buying households) reach retirement age and experience drops in disposable income. The impact on their BevAl spend and consumption remains to be seen but will be important for brands to monitor in 2024.
- Younger generations are more ethnically diverse than ever—lines are blurring, and effectively reaching your shopper community will require new intelligence frameworks and close monitoring. However, in the year to come, the buying power of Hispanic consumers will be a large-scale opportunity—in 2023, this population spent $7.8 billion in the category.
For more info on where generations are buying their alcohol, the purchase priorities and On Premise behaviors that differentiate Gen Z from previous generations, and the buying power of Hispanic consumers in the BevAl category, check out the webinar.
Trend 3: Psychology of Premiumization
In 2023, economic pressures dogged consumers, but alcohol remained a small luxury to splurge on. Shoppers are still willing to spend on aspirational, premium alcohol products—many (31%) prefer quality drinks over quantity, and premium experiences offered in the On Premise channel.
In 2024, we expect these premiumization trends to dominate:
- 24% of consumers plan to spend more in the On Premise channel over the next 12 months. Experiential bars (think axe throwing, shuffleboard, and more) are on the rise. At the end of 2023, 14% of Gen Z consumers and 17% Millennials reported visiting an experiential bar in the last 3 months.
- Premium+ Spirits, Imported Beer and $20 Wine are all driving premiumization, and premium products will continue to have a place in consumers’ beverage repertoires.
- Moderation in volume allows for premiumization, so we expect consumer preferences for quality over quantity in beverage alcohol consumption to continue.
- Expect to see increasing interest in craft and locally created premium brands that have a story to relate to within social networks.
For the full details on which premium and non-premium categories and subcategories are trending in Spirits, Ready-to-drink, and Beer, and the role of the On-premise bartender as influencer, watch the full webinar.
Trend 4: Flavor Forward
Flavors are taking center stage in diverse categories like Ready-to-Drink items, Whiskey, Beer, Wine, Tequila, and more. Suppliers are adapting with a dynamic approach to flavor exploration with shorter product lifecycles, and the introduction of entirely new styles. On Premise trends will continue to define trends in Ready-to-drink cocktails in Off Premise.
Here’s how flavor trends will play out in 2024:
- The Ready-to-drink product revolution will continue to drive flavor creativity and growth in 2024, and drive flavor innovations in Beer, Wine, and Spirits.
- Flavor creativity will proliferate in 2024 with functional beverage design being a key driver that consumers recognize.
- Products like Mezcal and Whiskey have their own unique flavor approaches and we can expect more innovation in 2024.
- On Premise cocktail creativity is not slowing down and mixologists are going to be challenging the status quo again in 2024—BevAl manufacturers have an opportunity to help curate targeted cocktail programs.
For more unique flavor trends driving growth in Beer, Whiskey, Mezcal and Tequila, check out the full webinar.
Staying ahead of Alcohol trends On- and Off-Premise
Success in the BevAl space means monitoring On- and Off-Premise outlets at a granular level. Best-in-class data provides the markets, channels, states and category analysis you need to stay ahead of trends and act on them with precision.
For more information, contact Matthew Crompton at Matthew.Crompton@nielseniq.com to learn more about CGA’s On Premise research and insights to help your business thrive in 2024.