State Of The Industry: What's To Come For Alcohol In 2019

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Alcohol consumption is stagnating as consumers pay increasing attention to health and wellness (US alcohol consumption decreased 0.7% in 2017, according to IWSR); but this means consumers increasingly value quality over quantity - good news for premium and craft sectors.

In 2019, the craft beer sector is optimistic it can continue to build on its success of previous years; while drinks such as mead and gin have seen a resurgence in the US. Meanwhile, wine consumers are increasingly on the look-out for sustainable options, while spirits drinkers are exploring new cocktail concoctions.

Craft beer

It was a good year for US craft beer in 2018?, with a 5% increase in sales and a milestone 7,000 breweries operating across the country. Another 1,000 are expected to open in 2019; in 2007 there were just 1,511. Vermont leads US states with the most breweries per capita (11.5), followed by Montana and Maine (both 9.6).

C + R research analyzed data from the Brewers Association to learn more about the growing popularity of craft beer in the US. The largest economic impact from breweries was found in Colorado at $764 per person and Vermont at $681 per person.

"When looking for nationwide trends and patterns, you can see that there is a heavy craft brewery presence in the Midwest as well as the Pacific Northwest,"? C + R research said.

"The South seems to have the lowest amount of craft breweries, which could be due to restrictive liquor laws that give brewers a lot of hoops to jump through to open. For example, laws in Georgia and Alabama ban craft breweries from selling their beer directly to visitors."?

Craft beer has grown the most on the east coast since 2015, thanks in part to more changing laws: New Jersey (43%), Kentucky (43%), Oklahoma (39%), North Carolina (37%), Virginia (36%) and New Hampshire (33%).

"In recent years, licensing laws in New Jersey have changed, which have allowed for microbreweries to sell beer by the glass and by the keg. In Kentucky, changes in laws have increased a brewing cap, allowing breweries to produce more beer,"? C + R said.

Spirits

With more consumer interest in premium, craft beverages, there's also been a resurgence in the popularity of traditional drinks like mead?, ginger beer and gin?. Mead (13) and Moscow mules (8) were the most popular 'trendy' drinks of 2018 in the US state-by-state, according to Google search interest data from Hangover Heaven.

Other recent trendy alcohol concoctions include jalapeño margaritas, picklebacks, frose, wine pops, frozen alcoholic slushies, lychee martinis, elderflower cocktails and hard seltzer. Now more often launched in convenience packaging, Nielsen reports sales of canned 12oz spirits are growing over 200% a year.

There are currently more than 1,500 craft spirits distillers? in the US, most heavily represented on the west coast. They are often restricted to selling local and becoming popular within a tight region, because small operations don't have the infrastructure to market or ship nationwide.

Subscription boxes? and other third party retailers are attempting to amend that and distribute craft spirits, though many states don't allow distillers to ship directly to consumers.

Rabobank said: "If the spirits industry had the same access to consumers as wine, they could build a market worth billions of dollars. Recognizing the opportunity, distillers are pushing state legislatures to change their shipping laws, and they are making progress."?

Spirits are also barred from the ecommerce sector in grocery. Several states still ban the sale of liquor anywhere outside of designated liquor stores, but even in states that sell liquor at grocery and convenience stores, the category is excluded from online sales.

Today's consumers want transparency and sustainability in their food and beverages across all categories, and spirits are no exception. Interest in production materials and processes has been growing, and conscious consumers will continue looking into the manufacturing of spirits. This is most well-represented through taprooms, brewery and distillery tours anchoring the appeal of experiential drinking?.

US wine and spirits importer Palm Bay International predicts: "The market will be selective of brands that pay attention to their carbon footprint and support sustainability movements like no-plastic-straws."?

There has also been a decline in the distrust of no-age statement spirits (spirits that do not state an age on the bottle), particularly with Scotch whiskies. Consumers increasingly trust the taste of their alcohol over any labels, claims or age statements that once represented status and credibility.

Out-of-the box spirits flavors within gin and tequila will continue to climb, featuring botanical combinations that are spice and herb-centric.

Wine

The Millennial generation out drank Baby Boomers in 2019, making this group even more important for the wine industry, says wine lifestyle site Wine Voice (around 28% of Millennials drink wine on a daily basis).

Millennials will not take the time to read labels: but they will be attracted to colorful designs, interesting logos or a catchy name.

Bourbon barrel wine - wine aged in barrels that once held bourbon or whisky - are expected to continue to increase in popularity; as are biodynamic wines (wines made with a holistic process in mind) and wines which consumers deem to be more sustainably-minded in general.

Source: beveragedaily.com
January 3, 2019