What You Need to Know: Spirits Marketing Trends in 2022

We all know that Gen X and Zoomers have vastly different drinking preferences. The disparities between them affect most operational aspects of the spirits industry today, including sourcing ingredients, production, marketing, and of course, sales.  But recently, in the wake of Covid, growing gaps between  Millennials and Zoomers have also become relevant to spirits brands. Many are clamoring to launch new products (we’re looking at you, RTDs) in an attempt to gain the strongest foothold with these notoriously brand-agnostic audiences. Here’s what you need to know.

Premiumization is a trend that has been around for quite a few years in all three categories – spirits, beer, and wine. It spiked particularly hard for spirits during Covid as more and more consumers, fuelled by months of enforced saving, sought out small comforts in affordable luxury. To quote David Ozgo, the chief economist for the Distilled Spirits Council of the United States, “A person may not be buying a Rolex or a BMW, but they can afford an $80 bottle of Scotch on occasion.” (BevAlc Insights)

These are the most notable pre-Covid factors supporting the continued growth of premium alcohol products:

• The general consensus is that Gen Y and Z drinkers are the key drivers of premiumization. 54% of 18-34 year-olds are likely to choose a premium drink versus just 35% of those over 55.  (Adeo Group)
• Incomes are growing globally. In the fastest-growing markets such as China and India, a burgeoning middle class is keen to access higher-quality beverages.
• Consumers are drinking less alcohol. It’s true. Up to 20% of adults in the UK now don’t drink at all, with 47% of drinkers having cut back their consumption, and Zoomers globally drink 20% less per capita than Millennials. (Business Insider)

Considering that they’re willing to pay more to drink less, consumers today also expect a more sophisticated and upscale experience when they order a cocktail at a bar or restaurant. Cocktail presentation plays a key role – one that premium alcohol brands can’t afford to underestimate. And it extends beyond the physical to digital experiences, too.

A full 69% of Millennials photograph their food and drink before eating so they can share on social media. Cocktails in particular are among the most shareable food and drink items, with TikTok reporting almost two billion hashtags for ‘cocktails’ (Club Mirror) in the first half of 2021. Or as one Forbes writer put it: “What was once a novelty has become a competitive advantage. Bartenders are now designing drinks with Instagram in mind because of its economic impact.”

This is leading spirits brands to constantly seek out new and creative ways of increasing the shareability of cocktails, as well as visibility to the specific spirit mixed inside. Often, they utilize glassware, garnish, and cocktail color to stand out. Many of the most innovative brands also use Ripples bev-top media, which provides a highly visible and flexible tool for influencing consumers at points of consumption.

Beer is no longer a masculine drink and cocktails are not feminine. The market research firm Kantar recently shared that “women in the UK now drink 40 million more glasses of whisky a year than they did in 2010, a rise of 15%, compared with a decline of 6% among men”. What’s more, 20% of customers are now keen to sample drinks they would never have tried pre-lockdown.

As the boundaries between drinker profile and drink grow blurry, brands gain the opportunity (and challenge) of attracting new fans. This means reassessing marketing strategy to focus on engaging consumers they haven’t approached before.

Customer definitions aren’t the only thing that’s expanding – drink categories themselves are also changing. Low & No alcohol products serve as a prime example. The category has captured significant market share among Gen Z, who cite reasons such as health concerns and fear of social media surveillance for drinking less. Google predicts that search results for the word ‘mocktail’ will increase 58% in 2022.

For their part, brands will need to think outside the box when it comes to sufficiently elevating the on-premise mocktail experience to justify serving prices.

We’ve covered the spirits marketing trends driven by changing consumer behaviors. Now let’s look at Covid factors, starting with the rise of the home premise. Nearly two years of on-and-off sheltering in place have pushed many consumers to recreate their favorite cocktail experiences at home, either through deliveries or by upping their own mixology game. But as public social life resumes, the on-trade will need to supply value-added experiences that cannot be replicated at home. How will they do it?

Though the hospitality industry has been slow to embrace digital transformation, since the pandemic began they’ve adopted a multitude of new digital platforms. Apps now enable easy ordering and payment through a range of methods, and bars are being demystified through better online menus.

Integrating drink personalization to the digital menu provides a customized experience that stands out against what was traditionally a sterile and impersonal menu flow.

In this example, created by Guinness during an extended period of travel bans in Korea, Guinness Korea launched a campaign called “travel the world with Guinness”. Consumers could scan a QR code to open a web app, upload their selfie, and choose a desired travel destination as a fun background. These personalized photo frames were printed on the foam atop their pints, and in most cases, also shared on social media.

It’s easy to add these types of digital customer journeys into a digital menu to promote specific brands, or to infuse more value into the post-Covid boom in cheaper beverage options, including ready-to-drink cocktails and draft cocktails.

Final Thoughts and a Challenge

The trends summarized in this article all point to one key insight: alcohol consumers in 2022 expect much more from their on-trade drinking experiences. For spirits brands, the challenge lies in balancing the expectations with conflicting operational limitations and gross margin objectives. The winners will be those who find creative ways to execute at scale.

Interested in learning more? Check out Trends in the Spirits Industry – Expert Chat on demand.