As the world’s largest hybrid packaging supplier,
Berlin Packaging tracks consumer insights, product trends,
and packaging innovation to understand what is happening in
the market so we can best help our customers succeed.
The spirits category is in a time of transition as the world
settles into a new post-pandemic normal.
Consumers continue to spend more time at home, health consciousness remains at the forefront, and economic uncertainty is impacting spending habits. Product innovation and packaging solutions that leverage these latest trends can help brands win in the crowded and evolving spirits market.
Home as a Hub
As a result of COVID-19, the home has become a place for both work and play. Even as the pandemic wanes, work-from-home and hybrid models will remain popular, shifting consumer habits and behaviors. This is creating longer-term changes in when, how, and where people consume alcoholic beverages.
While on-trade alcohol consumption is returning, the popularity of off-trade consumption will remain. Lingering safety concerns, cost considerations, and familiarity will continue to drive consumers to entertain at home.
Premiumization in alcoholic beverages has been an ongoing trend for decades. Manufacturers are capitalizing on consumers’ desire for indulgent experiences by continuing to introduce premium products and elevated experiences.
However, severe inflationary pressures, the growing risk of stagflation, and the potential of a recession will impact the spirits sector. Consumers are becoming more price-conscious and looking for products that provide value. Trading down and across will shift the focus away from premiumization, with both ends of the spectrum impacting the industry simultaneously.
Shifts toward healthier lifestyle choices are becoming prominent across most FMCG industries, and the spirits sector is no exception. Attitudes toward alcohol are changing, especially among younger consumers. There is growing demand for no and low alcohol options, and these products are becoming part of the mainstream.
Consumers are no longer just focused on their physical health but looking for products and ingredients that support emotional and mental wellness as well. Functional benefits, including those that help with relaxation, cognitive performance, brain health, and increased energy, are growing in popularity and likely to fuel the next stage of the better-for-you spirits segment’s growth.
According to IWSR Drinks Market Analysis, global alcoholic beverage e-commerce sales are expected to grow 66% 2020-25. Consumers appreciate the value, convenience, and variety found online.
Beyond traditional e-commerce, there is a rise in D2C and subscription-based delivery programs. In the United States, producers sold $223 million worth of wine via their DTC channels in June, an increase of 18% from the previous year. The spirits industry is lagging behind, but trade organizations are lobbying the government to pass DTC shipping laws (currently only allowed in 9 states plus District of Columbia).
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The brands mentioned in this report are trademarks of their respective owners. Inclusion of these brands in this report is not meant to imply an association with or endorsement from the respective trademark owners.