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Alcoholic Drinks in the US

US alcoholic drinks market: Positive future thanks to innovation & expansion

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2014-02-18 11:54:03 - Alcoholic Drinks in the US - a new market research report on

With sales in the US alcoholic drinks market having declined since 2009, beer finally returned to a positive trajectory in 2012 thanks to the premiumisation trend, with consumers embracing dark beer (especially craft versions) and premium lager, resulting in overall positive alcoholic drinks sales. However, further interest is also being shown in other categories as postmodern consumers are seeking differentiation and are becoming more adventurous with their drinks choices. Spirits, wine and in particular cider/perry and RTDs/high-strength premixes registered strong growth as consumers mixed and matched between beverage options and embraced innovation.

Post-recession, strong trading-up trends, observed particularly in spirits and beer, were driven largely by millennials and baby-boomers, fuelled by increased marketing spend, economic recovery and innovation at higher price



points. Flavour innovation flooded the alcoholic drinks landscape across all price points. While vodka has long been the frontrunner, other drinks, including dark spirits (beverages distilled from grains such as brandy, whisky and bourbon), wine, rum, tequila, gin and even beer have now jumped on to the flavour bandwagon so as to offer differentiation in the fiercely competitive alcoholic drinks industry. Manufacturers continued to push non-traditional flavours and hybrid drinks (eg mixing wine, beer and spirits for additional flavouring).

Brewers Anheuser-Busch InBev and MillerCoors remained the leading alcoholic drinks players by far but also showed signs of expansion beyond beer. They embraced change by investing in the small but dynamic cider/perry category through either their own brands (Michelob Ultra Cider from Anheuser-Busch InBev) or by buying an existing one (MillerCoors bought Crispin Cider). Anheuser-Busch InBev also expanded into malt-based RTDs, capitalising on the stronger demand for flavoured beverages with the highly successful Bud Light Lime-A-Rita.

Both of the above-mentioned retailing channels have made great efforts to expand their ranges of alcoholic drinks and cater for the demands of the postmodern consumer in terms of offering different brands and sweet and flavoured drinks. Parapharmacies have also been pushing their quality credentials and have expanded their range of wine and RTDs, even organising in-store tasting sessions and displaying luxury spirits brands. Legal-drinking-age millennials and females are emerging as core wine shoppers at convenience stores, looking for easy-to-drink, everyday wine options.

The future is positive for alcoholic drinks sales thanks to innovation, experimentation and category expansion. The sole strategy of flavour innovation could potentially cause confusion if marketers fail to accurately communicate and describe their flavours on product labels and other communication platforms. The boundaries between alcoholic beverage types is driving a reactionary trend, with basic, simple, high-end ―no-nonsense‖ beverage types in reaction to the increasing presence of hybrid, highly mixed and processed drinks.

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Mike King
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