Generational trends present issues for alcohol brands, says GlobalData

A tension exists in alcohol brands between consumers’ established preferences, market norms, openness to innovation, and products that cross traditional category or flavour lines, according to GlobalData, the data and analytics company.

The firm said that creative and edgy innovation works best when it retains a connection to the familiar, allowing consumers to experiment and try new things, but with a degree of confidence.

The company’s latest report, ‘Top Trends in Alcoholic Drinks’, noted that while traditional flavours in alcohol hold sway over consumers’ choices, a different picture emerges when reviewing flavour choices by generation and gender.

“Gen Z consumers are influenced by the newness and trendiness of flavours, as promoted through social media, and by visual as well as flavour aspects,” said Richard Parker, Principal Consumer Insight Analyst at GlobalData.

“This generational landscape creates a fertile territory for products such as hybrid beverages, which marry familiar categories in new and exciting ways – for example ‘vodquila’ or ‘rumquila’. GlobalData noted that hybrids can introduce interesting flavour notes and unique premium narratives through the use of storage and aging techniques from other categories, such as beer stored in wine or spirit barrels, or taking flavours from food products.

“Despite the opportunities for innovation and demographic targeting still to be had in such a mature market, alcohol brands face some growing macro-level issues. Climate change, and the unpredictable effects this is having on the supply chain, is undermining regular and sustainable approaches to production and consumption. This will force change in available products,” Parker added.

“Climate change affecting barley yields could lead to beer shortages and rising prices of barley (and beer) – subsequently resulting in a fall in global consumption. The risk of falling supply and significantly boosted prices means that brands will need to give consumers strong reasons to continue to purchase their products as premium becomes luxury and standard products effectively premium in price.”