February 11th, 2021

3 drinks trends to watch for 2021

Posted by Hattie Frisby

The 2021 interim results from one of the world’s largest alcohol beverage companies, Diageo, show some significant shifts in consumer habits during the coronavirus pandemic. These changes have had a big impact on the trends we expect to see in 2021.

Lifestyle changes and an increased curiosity about where and how our drinks are made has lead to a switch in domestic behaviours, which is influencing both marketing strategies and product development.

2020 saw a necessary shift to B2C sales and marketing, giving people more choice and inspiration of what to drink at home. Following this movement, consumers have more knowledge and consideration for what they are drinking, accelerating trends which will dominate the industry this year.

Here are our top three drinks trends to look out for in 2021:

1. Premiumisation

Premiumisation is a long term global trend which has been emerging over the past few years. According to the Diageo report, more than 50% of its net sales are now generated by premium brands, showing that this trend is now very established.

Its rise has partly come from people drinking less alcohol but better quality. This is often reported in discussions around the booming no and low sector, where premium non-alcoholic options are dominating headlines as people look to reduce their alcohol intake as a lifestyle choice.

According to a survey conducted by Leatherhead Food Research, health and wellness is a key consideration for consumers, and alcohol consumption between 2004 and 2017 has reduced by 16%. That said, there remains a place for alcoholic drinks even for those who choose to reduce their intake, as there are occasions where alcohol and calories play no part in the purchasing decision, such as a celebration. Here drinks must deliver on flavour – which is where a premium brand will likely be the preferred option.

And it’s not just premium spirits which are on the rise, sales of craft beer and quality wine have been increasing too as consumers are becoming more considerate about sustainability and sourcing of ingredients. Hyperlocal premium drinks tick many boxes for these consumers, which is great news for local breweries, distilleries, and wineries focusing on a sense of place and natural ingredients within their production and marketing.

Pentire ACV with tumeric

2. Ready to drink

Although it has been around for a long time, the ready to drink sector has seen a 4% increase within Europe over the last year. Once showcasing very little choice of just a few standard household spirits and mixers, the sector is now expanding into all kinds of exciting concoctions with sophisticated branding. Influenced by the growth of e-commerce in 2020, and the ability to get almost anything delivered to your door, ready to drink cocktails have become the must-order for those at home celebrations where people would usually go out to a bar.

The explosion of hard seltzers in the US is part of the ready to drink trend which is still yet to fully catch on here in the UK. Essentially flavoured alcoholic sparkling water, they accounted for 43% of mixed drink sales in the US in 2019. With big brands such as Coca Cola and Brewdog diversifying into a hard seltzer range, it’s only a matter of time before the low calorie, lighter alcohol option becomes all the rage amongst our increasingly health conscious nation.

We also see canned drinks being a big trend particularly for the summer as people spend more time outside at the beach, on picnics, and enjoying a UK staycation. Canning has come a long way over the past few years to become the packaging of choice for many drinks such as craft beers. You can now choose from a fantastic range of canned wine, beer, and cocktails across the country from craft producers as well as big brands. Watch this space…

3. Craft spirit boom

Following in the footsteps of the craft gin boom from the last decade, there are two more spirits set to head in the same trajectory: rum and tequila.

Last year alone it was reported rum sales had jumped 7% thanks to the increased popularity of the cocktail market where people are more willing to play outside their comfort zone with flavours. We would expect this trend to continue as people have been experimenting more at home.

According to an article by The Times, a record 124 distilleries were created in Britain in 2020, showing demand for spirits continues to increase. This is the first time more than 100 had been registered in a single year. Within the same article, it states total rum sales between 2017 and 2020 in Britain had increased 14% from 34 million bottles to 39 million.

No longer just the shot you have in a club with salt and lemon, tequila has shaken off some of its youthful image to become more of a sophisticated long drink which can be enjoyed at home. Tequila now accounts for 7% of Diageo’s total sales, up from only 1% the previous year. This is a trend which is being mirrored in further statistics worldwide. The popularity of the tequila industry might have a little to do with celebrity influence we’re going to call ‘The Rock effect’, as Dwayne Johnson posts about his small batch Teremana Tequila brand to his 215 million global Instagram followers daily.

Porthilly Spirit Distillery rum and apple herbal.

Trends in action:

As we emerge from lockdowns and the world starts to get back to some form of normality with the rollout of vaccines, wholesale trade will increase again with bars and restaurants opening up. On-trade business is such an important part of the drinks industry, not just for product purchasing, but as a way of introducing new consumers to a drink, brand, or trend.

Whilst it is widely thought that the hospitality sector will see a surge in people longing to get out and see each other again over a drink or two, the experience of enjoying a premium drink at home is set to remain. This is why a multi-channel marketing strategy will be essential for drinks brands moving forward, combining the power of wholesale with the benefits of the online consumer platforms which have been invested in throughout the last year.

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