Let’s face it there is a lot resting on 2021. As we head into Christmas week our thoughts are starting to turn to what is in store for us in the next 12 months. It’s not surprising considering the tumultuous year we have all lived through that there are big hopes for next year and the opportunity for us all to get back to some sort of normality. Here Neil Anderson, retail brand marketing director of specialist spirits supplier, Quintessential Brands, shares the key trends he thinks will dictate the drinks industry in 2021.
Any key trend in the drinks industry going into 2020 has been on fast forward on the back of Covid-19. But which trends will dominate our lives over the next 12 months? Neil Anderson of Quintessential Brands looks to set the agenda with is top five drinking tips.
What does 2021 have in store? If we have learnt anything from this year, it is that you never can be certain about what is going to happen. However, with a vaccine being rolled out, there has to be some level of optimism now.
Firstly, we need to stay close to our all-important consumers of our brands and products during these challenging and evolving times. Understanding their motivations and evolving behaviour has to be the priority.
Based on my conversations with those in the drinks industry (producers, customers) coupled with additional research Quintessential Brands has undertaken this year, here are my predictions for 2021:
1. Consumers’ growing desire for the 3 C’s – Cause, Community & Conscience – set to continue
In January 2020, 7% of consumers in a poll said they like to purchase product and brands or services from companies that give something back. By September, that figure had risen to 48%, showing what a dramatic impact Covid-19 has had on people’s sense of conscience and community spirit.
It’s always important for marketing to be well-attuned to public sentiment and with the fear and uncertainty that was widespread at the start of the pandemic, brands had to quickly adapt their marketing communications to ensure they didn’t appear tone-deaf. Many of those brands who demonstrated empathy and took action to support others affected by the pandemic – such as our very own BLOOM Gin, which offered free 20cl BLOOM gin wedding favours to couples who had to postpone their weddings due to the pandemic – have had their efforts rewarded by consumers and this will stand them in good stead, especially if they continue to demonstrate their own sense of civic duty and philanthropy into 2021 in an authentic way.
2.Improving quality of ‘alternatives’ as they become ever more mainstream
‘Alternatives’ such as organic, vegan, sulphur free, no sugar and no alcohol used to be niche, but with growing shelf space in store and presence online, they are now well and truly entrenched in the “mainstream”. As such, competition is fiercer, meaning great taste has become increasingly important.
It’s not enough to simply offer the alternative, consumers now expect more from such products – to be made better, taste better, to do better, so producers of low and no alcohol products need to up their game if they’re going to compete.
3. Purchasing behaviours: There’s no going back
We have seen dramatic changes in how we shop and our associated behaviours as a result of the pandemic, and some of these changes are here to stay. For example:
- From 9% pre-lock down, e-commerce now makes up 50% of total retail sales (reaching 55% in April) as consumers have fully embraced online shopping. In grocery, online sales are up +82% vs last year. These increases are from all age segments.
- For many, the move to online shopping was made out of necessity, but it has now become their norm, due to the convenience it brings, so it’s hard to see this trend reversing.
- There has also been a 52% increase in Monday to Wednesday grocery shopping trips. With an increase in home working, which based on announcements from various FTSE companies, it looks like a more flexible balance of working is here to stay.
- Basket spend is up, convenience is in double digit growth.
4. The gin category will continue to outperform in spirits
There’s been speculation for some time about the gin bubble bursting, but this year has shown that that is far off the mark. In the off-trade, alcohol has been one of the best performing categories throughout 2020, however gin has been one of the most exceptional performers within BWS.
IRI reports total spirits up 11% over the year (MAT to November 1). However, gin, the largest spirits category, is up 15% making it clearly the most important driver of spirits growth. Flavoured gins have seen 90% growth at times during the year and now sit 29%, so again, showing their importance within the spirits category.
With gin meeting different occasions, appealing to all ages, and plenty of new exciting flavours hitting the shelves in 2021, gin will remain the most important spirits category for overall performance.
5. Premium own label and retailer brands will continue to outperform and be a vital part of the category
There remains great potential with retailer brands. They remain the “sleeping giant” of the spirits category. However, this is changing as retailers realise the specific value-adding role they can play in recruiting Gen Z and millennial consumers by tapping into specific occasions and seasons, as well as introducing new innovation to market faster. With the attractive margin gains to be had, these will continue to grow, particularly as the recession deepens and disposable incomes shrink.
- If you would like to share your top drinks industry tips for 2021 then contact Richard Siddle on firstname.lastname@example.org.