It’s time to stop dwelling on the past and take a look at what the future holds. 2020 was one bummer of a year, to say the least, but it has also fundamentally changed the way many businesses operate, the alcohol beverage industry included.
If there’s one real lesson to be gleaned from 2020, it is that no one can truly predict what will happen. But forge ahead we must. Peering deep into the crystal ball of common sense and educated observation (backed by some facts and figures), here are some of the biggest trends set to dominate the alcohol industry in 2021.
Drinking at home
Direct-to-consumer, online e-commerce is perhaps the broadest, all-encompassing shift that has planted firm roots in 2020 and is here to stay for the foreseeable future. Brands that prioritised selling to bars and retail before are now switching it up with direct sales channels too, and for good reason.
You see this happening with initiatives like the SG Craft Together movement where breweries banded together to sell to consumers directly. Or with distributors like Smith Street Trading opening an online store as well. It makes sense, as while on-premise sales are limited by capacity and operating restrictions, e-commerce is allowed unbridled growth.
According to research by IWSR, the value of the international alcohol e-commerce market is set to grow by 42% in 2020, compared to just 11% in 2019. “Growth is largely being driven by the omnichannel segment as supermarkets and traditional retailers seek to rapidly enhance their online offering,” the report states. “On-demand players are also expected to gain significant share.”
The on-trade term that is RTD (ready-to-drink) will become more and more commonplace. RTDs are also one of the main drivers of the alcohol e-commerce boom. According to IWSR, the category is predicted to represent 10% of total alcohol e-commerce value by 2024, up from just 2% in 2019.
From being something bars sold just to tide over the crisis period, RTD cocktails and other beverages are now a mainstay item. Jigger & Pony Group’s newly formed PONY line and Campari’s own Campari Negroni Cocktail available in 500ml bottled formats are prime examples. But also expect a surge in more interesting RTD formats, such as Compendium’s sojus, canned highballs, spiked coffee drinks and more.
This is a misnomer, to be sure, but until the industry agrees on a proper name for non-alcoholic beers, wines, spirits and whatever else, this is what we will call it. “Adult beverages” just don’t seem to cut it right now.
In any case, the rise of alcohol-free variants of commonly alcoholic products has been an unexpected winner this year, and likely for the near future too. We can only attribute this to the rise in consumer awareness and desire for the same great taste many alcoholic drinks provide, but without the nasty side effects.
Closely linked to the non-alcoholic boom is the thirst for booze that is seen as healthier and better for the environment, such as low-ABV drinks and beverages made using more sustainable methods. Brands like Seedlip, Melati, and Sans Papiers are case in point.
According to a study by Clarivate, the same Millennial and Gen Z consumers powering the RTD segment with their need for convenience and instant gratification, are the same generations calling for healthier and more eco-conscious alternatives. This poses a unique challenge for alcohol marketers appealing to these digitally-savvy demographics.
Proliferation of hard seltzers
Hard seltzer is now a category to bank on. Although nothing completely new, it has somehow caught enough attention and gathered sufficient clout to become a staple in retail, and possibly even at bars soon.
The category, though nascent, seems to be attracting a fanbase from both regular drinkers and non-drinkers alike, being seen as a healthier, more refreshing alternative. White Claw is the most popular hard seltzer brand in the market right now, with labels like Sunly and Whitewater also in the fray. Cider brand Somersby even debuted its own line of hard seltzers in Singapore earlier this year.
In line with aforementioned trends, the proliferation of hard seltzers (often in easy-to-drink cans) is linked to the rise in RTD products, e-commerce and the perception that they are lower in ABV, calories and seen as being better for you.
Rise of home bartending
A side effect of on-premise closures (or reduced opening hours) is that many turned to home-based bartending. With more and more distributors selling directly to consumers as well, bar supplies have never been more accessible for the mixology hobbyist.
If the quarantini and drink-at-home social media trends are any indication, home bartending is not only a way for people to enjoy drinking from the comforts of home, but also an outlet for personal creativity and expression.
This is not a bad thing for bars. On the contrary, the more educated the public gets about cocktails, the better it is for bars that actually give thought about their offerings, as well as for craft spirits brands, especially in the long-run. It’s always better if customers can appreciate why they are paying so much for that Mezcal Paloma made using specialty bottles and upcycled ingredients for themselves.
Craft beer leads the way
Asia-Pacific as a whole is the world’s largest alcohol market, thanks in no small part to the sheer volume of consumers from China. And in Mainland China, beer, especially craft beer, is set to be the fastest growing segment, with beer trademarks experiencing a great increase the last 10 years, according to a Clarivate report.
“Mainland China is the leading innovator in beer and leapfrogged Japan, another global beer innovation powerhouse, in 2015,” the report states. It is thanks in large part to the great domestic demand that has surged in recent years, and is set to continue growing going forward.
Well-known Chinese craft breweries leading the way include the likes of Boxing Cat, Great Leap, No. 18 and Slow Boat, among many others.
About the Author
Dannon Har is the Managing Editor of Spill. Discovering his innate gift for drinking only at a ripe age, he spares no time trying to find more delicious drops to imbibe during his time on Earth. When he’s not minding every detail at Spill, he spends his time concocting luscious libations and sharing them with folks that visit his home bar.