Detailed Findings:
Spirits sales are declining: Down 11% year-on-year and 13% from 2019, significantly underperforming compared to beer.
Multiple factors contribute: This decline is attributed to rising prices, the cost-of-living crisis, changing consumer preferences (moderation, earlier dayparts), and category switching.
Consumer perception: Over 40% of those drinking less spirits cite high prices as the reason.
Gen Z offers hope: This demographic is going out more, particularly to experience-led venues, and over-indexes for spirits consumption.
Key Takeaway: The spirits industry needs to adapt and innovate to overcome current challenges and regain its appeal, particularly by focusing on value, experience, and targeted offerings.
Trend: Shifting consumer behavior in the On Premise, including reduced spending, earlier dayparts, and increased focus on value.
Consumer Motivation:
Value: Consumers are more price-sensitive and seeking value for their money.
Experience: Younger consumers are drawn to unique experiences and social settings.
Moderation: Growing interest in mindful drinking and lower-alcohol options.
What is driving the trend?
Economic factors: Cost-of-living crisis and inflation.
Social shifts: Changing drinking habits and preferences.
Category competition: Competition from other beverage categories like beer and wine.
Motivation beyond the trend:
Desire for connection: Consumers are seeking social experiences and connection after periods of isolation.
Health & Wellness: Increased focus on health and well-being influences drinking habits.
Exploration & Discovery: Consumers are open to trying new and interesting drinks and experiences.
Who are the people the article is referring to?
Spirits suppliers and manufacturers
On Premise operators (bars, restaurants, pubs)
Consumers, particularly Gen Z and younger demographics
Industry analysts and researchers (CGA by NIQ)
Description of consumers/product/service:
Consumers: Price-conscious, experience-seeking, potentially interested in moderation and lighter options. Gen Z is a key demographic, with a focus on social outings and unique experiences.
Product: Spirits, with a potential focus on premium brands, cocktails, and new serve innovations (e.g., spritzes).
Conclusions:
The spirits industry faces significant challenges but also has opportunities to adapt and thrive.
Understanding consumer motivations and preferences is key to success.
Collaboration between suppliers and operators is essential to create appealing offerings.
Implications for Brands:
Innovate: Develop new serves, cocktails, and experiences to engage consumers.
Focus on value: Communicate the value proposition of spirits, beyond just price.
Target Gen Z: Tailor offerings to appeal to this influential demographic.
Collaborate: Work with On Premise operators to create compelling experiences.
Implications for Society:
The hospitality industry plays a crucial role in social connection and community building.
Adapting to changing consumer preferences can support the long-term viability of the On Premise sector.
Implications for Consumers:
Access to a wider variety of drinks and experiences.
More options for mindful drinking and moderation.
Opportunities to discover new and exciting flavors.
Implication for Future:
Continued evolution of the drinks industry and consumer preferences.
Increased focus on experience and value.
Consumer Trend: Shifting On Premise behavior, value-seeking, experience-driven consumption, moderation.
Consumer Sub Trend: Gen Z's influence on nightlife and drinking culture.
Big Social Trend: The evolving role of social spaces and experiences in a post-pandemic world.
Local Trend: May vary depending on the region and local culture.
Worldwide Social Trend: Shifting drinking habits and preferences, with a focus on moderation and mindful consumption.
Name of the Big Trend implied by article: The Experience Economy
Name of Big Social Trend implied by article: The Mindful Drinker
Social Drive: Desire for connection, value, and authentic experiences.
Learnings for companies to use in 2025:
Understand the evolving needs and preferences of consumers.
Adapt offerings to cater to different occasions and dayparts.
Focus on building brand loyalty and emotional connection.
Strategy Recommendations for companies to follow in 2025:
Invest in experience: Create unique and memorable experiences that resonate with target consumers.
Offer variety: Provide a diverse range of spirits and serves to cater to different preferences.
Communicate value: Clearly articulate the value proposition of spirits, beyond just price.
Embrace technology: Utilize technology to enhance the customer experience and gather data on consumer behavior.
Final Sentence (Key Concept): The spirits industry can overcome current challenges by adapting to evolving consumer behaviors, focusing on value and experience, and creating innovative offerings that cater to a diverse range of preferences.
What brands & companies should do in 2025 to benefit from the trend and how to do it:
Reimagine the drinking experience: Develop new and exciting serves, cocktails, and presentations. Partner with mixologists and bartenders to create signature drinks.
Embrace storytelling: Communicate the story behind the brand, its origins, and its values. Highlight craftsmanship, quality ingredients, and unique production methods.
Offer premium, but accessible options: Provide a range of price points to cater to different budgets, while still emphasizing quality and value.
Create a sense of community: Host events, tastings, and experiences that foster connection and build brand loyalty.
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