Drinks analyst puts his money on mindful drinking for future growth
Danny Brager, Senior Vice-President, Beverage Alcohol Practice (US) has told the Drinks Association Network Breakfast that health and wellness is the top alcohol trend drinks companies should focus on for future growth.
Brager was guest speaker at the event, which explored key learnings the Australian drinks industry can take from liquor trends in the United States.
When asked by event host and Drinks Association Executive Director Jeff McKenzie what he'd put his last dollar on in the drinks category, Brager's money was on "the conscientious drinker".
Spurred by a sea of consumer change among American drinkers, the landscape of the US alcoholic beverage market continues to change at lightning speed. Competition for each beverage alcohol drinking occasion and dollar - from both within and beyond the alcoholic beverage sector - has never been more intense.
Brager said the rise of mindful drinking globally suggests that no-alcohol options will continue to grow as a consumer beverage choice during social occasions. Aside from the successful launch of Heineken Zero in 2018, there has also been an increase in non-alcoholic craft spirits. Global brands like Seedlip and local entrants such as Ecology & Co are providing consumers with more options than ever before.
The popularity of Dry January, Dry July, low-carb beer, alcohol-free spirits and hard kombucha in Australia also suggests that ‘mindful drinking’ is the latest health-craze among Aussie consumers.
Brager noted that he feels it is "trend not a fad" and is a "big deal" for both the industry and consumers.
He said Nielsen data shows the main reason people are drinking less beer in the US and Australia is that they are opting for a healthier lifestyle, with 40% of US respondents flagging it.
Beverage drinkers aged 21-34 are particularly mindful, with 66% of them making an effort to reduce their overall consumption of alcohol.
"Australians are reducing the alcohol they consume with one-in-four claiming they have done so recently," he said. "This is more pronounced for men aged over 40. When exploring the reasons behind the reduction in alcohol intake, 32%" of beer drinkers said they are opting for a healthier lifestyle."
As with any category or industry, Brager said the change doesn’t mean that a revenue stream has evaporated.
"Near-beers, premium soft drinks, mocktails, low- and non-alcoholic options, kombuchas and botanical tinctures all offer a wealth of opportunity for on-premise establishments to experiment with and promote to consumers," he added.
However, for liquor manufacturers, bars and restaurants that don’t adapt to shifting ‘mindful drinking’ preferences, "the outlook will be far less bright".
Manufacturers are also channelling their innovation efforts to hit the sweet spot between ‘good for me’ and ‘good for we’ options across channels and categories. Consumers are increasingly seeking options that are better for their own health and that of their families, while also being better for the wider community and the environment.
For example, in Europe consumers are more likely to pay a premium and try products with a sustainability appeal.
"Aside from being a strong premiumisation play, the target market for this sweet spot is highly engaged and readily identifiable making it an attractive proposition for marketers," Brager said.
Click here to read what Brager had to say about the trends in wine, beer and spirits.
Danny's presentation can be found here.
Here are some photographs from the event: