Has the market caught up with shifts caused by Covid?

Successive lockdowns, the closure of the on-trade, and the disruption that the Covid-19 pandemic has caused to our everyday lives has changed how consumers are drinking, shifting the alcohol occasion to new locations and new times; has the market caught up?

As summer approaches and much of the world remains in flux, consumers across many major markets are beginning to contemplate what their summers may look like. Now more than a year into a pandemic that has closed international boarders, changed lives, and prevented many from seeing friends and loved ones, the prospect of better weather and easing of lockdown restrictions brings with it (tentative) plans for summer gatherings.

In some markets such as the UK, USA, and selected mainland Europe, dates for large-scale festivals have been announced. And while bookings for on-trade venues in the UK are open, a staggered opening date first for venues with outdoor areas, followed by indoor hospitality venues – both still operating under socially-distanced practices – will mean that demand is likely to far outstrip supply. Many venues are already reporting being fully booked for weekend slots months in advance. In short, whether for practical or safety concerns, outdoor drinking is here to stay for the foreseeable. But has the drinks market caught up?

Lifestyle changes

As explored in previous blogs, walktails (the practice of consuming alcohol while on permitted daily exercise walks), mail order booze, subscription clubs, or on-demand delivery from shuttered leading bars, have emerged as some of the key ways in which brands have had to adapt to reach consumers – and their changing needs – during the pandemic. The boom in functional ingredients too, has emerged as a key segment to watch as greater health-consciousness has prompted consumers to make lifestyle changes during lockdown. While a counter shift towards drinks connoisseurship has seen consumer opt for premium releases, or join drinks subscription clubs that offer exclusive tasting samples, alongside educational opportunities.

According to a brand new study from Alcohol Change UK, undertaken by Opinium to find out whether people’s drinking habits have, in fact, changed in lockdown, both indulgence and abstinence have been key defining factors of our changing lockdown habits. The study found that though most consumers are drinking differently, they aren’t all responding in the same way. More than one in three of the 1,555 drinkers surveyed reported they have either stopped drinking or reduced how often they drink, since lockdown, while 6% said they have stopped drinking entirely. However, 21% – or around 8.6 million UK adults – said they have been drinking more frequently since the lockdown.

Keeping pace

In short, the brands and categories that have managed to keep pace are the ones that have responded not just to the consumer mood, but have managed to match the new drinking occasion – with its increased demand for balancing indulgence with functional ingredients, and lower ABVs – with a need for formats that better meet these new occasions.

Though there’s been a flurry of craft cocktail RTDs, and pouch delivery boxes launched during lockdown, arguably, formats at large have yet to adapt fully to these new consumer needs. Summer 2021, will be dominated by the right products in the right formats. Afterall, it’s the combination of low ABVs, low calorie counts, and easily portable formats, decked in Instagrammable designs, that has helped hard seltzers to flourish over the past couple of years.

Convenience is king

Announcing the recent launch of the RancH20 canned cocktail range, which includes a Vodka Soda, Classic Marg, Gin Fizz, and a tequila-based Ranch Water, in the US in March, CEO Amelia Lettieri, said: “Consumers today want convenience, shareability and portability, and we’re committed to making RancH20 bigger than Texas. Notably each product, which range from 6.5-7% ABV, contains just 150 calories per 12oz can.”

The ‘will-it/ won’t-it succeed’ saga of canned wine has rumbled on for a number of years now, hindered by quality perceptions, but now buoyed by demand for both portable formats, and single serve options that allow consumers to easily moderate intake. Could 2021 finally be its moment?

Babe canned wine is making a shrewd play for the UK market by overtly tapping into the current consumer mood, having first launched in the US in 2015. The product from Josh Ostrovsky, a.k.a. “The Fat Jewish” (@thefatjewish), and Tanner and David Oliver Cohen launched a light and refreshing rosé targeted to a new culture of wine drinkers who just want to have fun, and is marketed under taglines including “I deserve wine now” and “It’s wine. In a can. Get over yourself”. Its new mixed packs are available in 12 or 24 packs of 200ml cans of ‘sparkling Spanish white’ and ‘French Rosé with bubbles’. Its Babe Foodie Box is for those that “miss real life, parties, and friends?” and includes chocolate truffles, and meringues. While the playful website makes proclamations including “Babe is the cute, delicious, take-anywhere wine in a can that pairs well with literally everything” and “The official wine of day drinking and falling asleep by 10pm so you don’t wake-up feeling like complete garbage”, the brand is also making a play to be a more eco-friendly choice than purchasing wine in glass bottles.

Casual premium

Pouched drinks, including wines, may also find themselves a convenient choice for consumers heading to picnics in the park this summer, though branding – and how this affects perceptions of quality – will be key. Easy to pack into cool boxes and chiller bags, and the new format of choice for many prestigious bars launching take-home options during lockdown, there still seems to be a little squeamishness among consumers to be seen out-of-home with the format. Numerous media pieces have appeared over the past six months, highlighting special cool bags designed to hide pouched wines – while also cooling them, and allowing for dispense without removing them for the bag. However, the Franzia brand has leaned into the trend with a branded backpack designed to specifically to hold, cool, and dispense a box of its wine.

Balancing needs

The new wave of popular formats emerging during these strange times highlights concerns that will be paramount for drinks makers in the coming months, and beyond. Though practicality is key, consumers now used to taking reusable water bottles with them, separating their waste for recycling, and avoiding single use plastic where possible, have waning tolerance for overly packaged products. The new launch from Small Beer, London’s sustainable brewery has launched a recyclable beer keg for home use, targeting a 1000% rise in Google searches for ‘BBQ’, and a reported rise in demand for larger sharing formats from supermarkets.

The limited edition Small Beer BBQ Kit includes two session-strength beer styles in a fully recyclable, 5L format, intended to be a “new kind of centrepiece for outdoor dining and bring a sense of occasion to your Easter feast”. Both beers are notably under 2.7% ABV, and the pack also includes charcoal, applewood and eco firelighters, and is priced at £37, making it an affordable, better-for-you, and better for the planet, guilt-free treat.

Products that manage to balance portable, easy formats that work for these new consumer occasions, while also tapping into a complex myriad of consumer needs from eco-friendly formats, to wellness focused products, or those that offer the sense of being a premium or playful treats, will reap the rewards as life, hopefully, gradually moves towards normality.