Convenient, experiential and healthier lifestyles: These are the rallying cries emerging in today’s U.S. adult beverage landscape and the principal themes Danny Brager, Senior Vice President, Nielsen U.S. Beverage Alcohol Practice, recently addressed at the Unified Wine & Grape Symposium in Sacramento and the Oregon Wine Symposium in Portland.
Presented to an audience of wine industry insiders, Nielsen painted a picture of what trade trends will win throughout 2019 and beyond. According to Danny, “One thing is clear: competition has become much broader and multifaceted, with pressures coming from other beverage categories—the hard seltzers and ready-to-drink cocktails of the world—as well as changing consumption trends, like drinking healthier, drinking less or even abstaining from alcohol entirely.”
Other major shifts that Danny presented to the industry included:
A Shift to Alternate Beverages, in Moderation
Nielsen data shows that nearly half of regular wine drinkers—including two-thirds of Millennials—say they’re trying to drink less alcohol, with the primary reason being that this aligns with a healthier lifestyle. Some good news for wine? Adult beverage consumers traditionally shift from other alcoholic beverages to wine as they get older. And while some are lowering their alcohol intake, others are pausing consumption altogether. Aligned with this trend, Danny said, “Today we are seeing manufacturers that have traditionally focused on non-alcoholic beverages now jumping into the fray through offerings like alcohol-free sparkling sangria, cider, bellinis and ginger mules. Fortunately for alcohol consumers, the wine category as a whole is adapting, as we’re seeing growth beyond just table wine, including wine cocktails, sangria and sparkling wine, as well as a plethora of wine types in cans.”
Evolution in Experiential Drinking
On stage, Danny continued, “As tastes evolve, so do locations where consumers have the opportunity to imbibe, and brands need to stay in tune and begin to think of new and exciting ways to engage with the consumer, beyond the expected. Consumers crave the experiential, and they can do that with a drink in hand at places beyond just bars and restaurants—including taprooms, outdoor music festivals/concerts, various sports/activity bars, tiki bars and cinema bars.” Referencing Nielsen CGA On-Premise User Survey data, he noted that of those 21+ U.S. consumers who have visited a bar in a cinema in the past 3 months, nearly half (42%) have done so more in the last year than the previous year.
Embracing E-commerce Sales
And in addressing the growing omnichannel retail environment, Danny reinforced that e-commerce is a frontier of sales opportunity. Within the alcohol e-tail, wine wins by leaps and bounds over beer and spirits, generating 78% of online alcohol sales from January to December 2018, according to Nielsen data powered by Rakuten Intelligence. But still the wine category as a whole has room to grow; 2018 online alcohol sales made up only 19% of total online beverage sales, and its online presence is much less developed than many other categories.
In an environment of slower overall wine category growth, it’s imperative to pursue hot pockets like e-commerce. “However, in today’s wine business environment, it’s become a battle for the hearts, minds and pocketbooks of consumers, occasion by occasion. With growing competition from both within and beyond alcohol categories, the sharks are circling.”