First came Dry January, now it’s Sober October. The challenge to give up alcohol for a calendar month is becoming more than just an event that lasts for 31 days; it’s becoming a lifestyle trend.
NielsenIQ recently hosted a webinar identifying some important trends for the end of 2024 leading into 2025. None of the news should come as a huge surprise to people in the beverage alcohol industry. And while it doesn’t seem like an ideal road ahead, there are opportunities if you know where to look for them. Here’s how data can help you take advantage.
Consumer drivers
Nielsen IQ identified multiple consumer drivers impacting the beverage alcohol industry, including:
- Moderation of consumption, including health and wellness concerns
- Premiumization
- Inflation
- Usage occasion substitutions, with cannabis and THC consumption presenting other opportunities for those occasions
These factors are probably familiar to many in the industry. The rapid growth of SKUs has added a level of complexity to beverage alcohol that has forced businesses to get more creative with their offerings and the other aspects of operations that these changing consumer preferences affect.
RTDs disruption
Another thing to keep in mind is the way RTDs are disrupting the numbers. In many statistical cases, RTDs are usually paired with their category of drink (beer/cider, spirits, and wine), and if the numbers are looked at that way, growth in the industry is pretty flat. But if RTDs are excluded, the beer/cider, spirits, and wine categories are all down in terms of growth rate. NielsenIQ reports that RTD as its own category would make up an 11% share of total alcohol.
When it comes to where shoppers are making their purchases, liquor store purchases are down. Liquor stores remain the top choice for people looking to purchase spirits, but there is more competition with other beverages from convenience stores or grocery stores. NielsenIQ reports that 44% of beverage alcohol shoppers note speed and efficiency are the most important factors to them at retail.
How data can help
For liquor stores, as a destination purchase channel, it is important to drive traffic into stores. A lot of that rides on price, so it’s important to use the information available to you to be competitive in that way. It is possible for liquor stores to stock a wider variety of products, but there is a balance they need to strike. People who are in the habit of going to liquor stores like knowing exactly where to find what they want without having to think about it too much. Stocking more products could help liquor stores become a destination for more products than they’ve been in the past, but they don’t want to sacrifice too much shelf space in a way that would upset returning customers. The important thing, though, is getting foot traffic into the store, where people might make extra purchases.
One of the biggest opportunities for growth lies with members of Generation Z of legal drinking age (LDA Gen Z). According to NielsenIQ, LDA Gen Z represents 8% of households buying beverage alcohol, and that number is obviously increasing as more people come of age. There are opportunities for businesses, particularly when it comes to flavor innovation, and data can play a major role in helping to identify ways to take advantage of those opportunities.
The summer months have passed, which is when beer is usually at its most popular. For liquor stores, it is important to concentrate on spirits sales during the holiday months before the end of the year. Analytics can help identify what products sell best that time of year, and help companies make the best decisions to take advantage of the holiday giving and celebration season. It would also help if the Sober October trend doesn’t carry over into a No-Drink November or a Dry December.
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