6 Important Alcohol Industry Trends (2024-2027)
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The alcohol industry is a resilient one.
When COVID restrictions shut the doors of bars and restaurants, off-premise sales of alcohol soared. Today, we’re seeing the DTC alcohol market take off.
As people’s tastes change, the alcohol industry is poised to adapt and launch new products.
One thing remains the same: alcohol producers that can catch trends early will continue to take in huge profits.
Here’s a list of the top six trends in the alcohol industry worth keeping an eye on.
1. Non-alcoholic drinks go mainstream
Nielsen reports that sales of non-alcoholic beverages increased 33% for a total of $331 million in 2021.
Searches for “non-alcoholic drink” are up by over 60% in 5 years.
This trend is expected to continue. IWSR reports that the total volume of no-alcohol and low-alcohol beverages hitting the global market is expected to grow 31% by 2024.
A recent Gallup survey shows that consumers are supporting this trend.
In 2019, 65% of adults reported drinking alcoholic beverages. That number was down to only 60% in 2021.
Gallup’s survey shows that the highest percentage of individuals drinking alcoholic beverages occurred in 2010, with 67% of adults reporting they drink.
The non-alcoholic beverage trend is especially prevalent among Millennials (people who are 26 to 41 years old right now) and Gen Zers (people who are 10 to 25 years old right now).
Gen Z is drinking more than 20% less than other generations did at their age.
There’s even a movement for people who may have drunk alcohol in the past but don’t anymore: “sober curious”.
Those who are “sober curious” aren’t necessarily addicted to alcohol or feel the need to abstain for the rest of their lives. They are simply experimenting with living without alcohol.
Searches for “dealcoholized wine” have increased 486% over the last decade.
There’s Dry January and Sober October, too, for individuals looking for a defined time to dedicate to non-alcoholic beverages.
Athletic Brewing Co. is one company that’s popularizing the “non-alcoholic alcohol” trend.
Search growth for “Athletic Brewing Company” is skyrocketing (350% in 5 years).
More than 100,000 barrels of their beer went out the door in 2021.
And brewer was named one of Time Magazine’s 100 Most Influential Companies in 2022.
2. Mix-ins and enhancements shake up the market
In 2022, an olive in a martini or an orange in a Blue Moon doesn’t cut it anymore. People are craving mix-ins, enhancements, and fermented mixers in their drinks.
A survey by Bacardi Global ranked flavored bitters, coconut water, coffee, and fermented mixers as the most popular ingredients that are piquing the interest of bartenders.
Bacardi is seeing growth in offbeat mixers.
In the bitters category, Aperol and Campari have specifically soared in popularity.
Bartenders say Aperol paired with Prosecco and club soda (an Aperol Spritz) is one drink of choice.
#aperolspritz has over 2 million posts on Instagram.
Hard coffee was popular in the 90s, and yet, it’s an emerging trend now, too.
Between 2019 and 2020, hard coffee sales grew by 1,100%.
The most popular preparation of 2022 was a mildly sweet, good-for-you cold brew.
Mr. Black Coffee Liquor offers 10 times more coffee concentration than classic brands like Kahlua but packs only half the sugar.
Mr. Black has been called “the leader in a new breed of spirits”.
The fermented drink market (alcoholic and nonalcoholic) is expected to have a CAGR of 6.2% through 2028.
The hard kombucha market (an alcoholic, fermented beverage) is growing much faster with a CAGR of 42.4%.
The popularity of hard kombucha continues to soar, up nearly 136% in the past 5 years.
Flying Embers is one of the most successful hard kombucha brewers.
The startup raked in $20 million in a Series C funding round in early 2022. And they’ve reported 93% growth year-over-year.
Searches for “Flying Embers” are up 233% in the past 5 years.
The final add-in to note is cannabis.
The 2021 BevAlc report showed that more than half of respondents said cannabis-infused drinks have the industry’s highest growth potential.
Artet is one brewer that offers a non-alcoholic, cannabis-infused “cocktail” drink. It’s described as botanical, with notes of ginger, juniper, and cardamom.
The company’s drinks have approximately 2.5mg of THC, reportedly giving drinkers a “light, mellow buzz”.
3. Alcohol brands are diversifying
In an effort to capture more sales, many beverage brands are diversifying their product offerings.
In recent months we’ve seen non-alcoholic beverage producers enter the alcoholic market. As well as beer brewers launching spirits and hard seltzers.
Ekos, a company that offers business management systems for craft breweries, reports that 31% of their customers say they’ll be launching new types of products in the next two years.
In the midst of this diversification, beer has been losing ground to other beverages in the alcoholic market.
In 1990, beer was responsible for 87% of the volume. In 2020, it was down to 72%.
Beer’s grip on the alcohol market is slipping.
Dutch brewing company Heineken recently acquired Distell for $2.6 million, expanding their business to include wine, brandy, liqueur, and whisky offerings.
Even giant beverage companies like PepsiCo and Coca-Cola are diversifying.
In 2021, PepsiCo announced it would partner with Boston Beer to launch Hard Mtn. Dew with 5% ABV.
With none of Mountain Dew’s usual caffeine or sugar, the beverage hit shelves in early 2022.
Coca-Cola bought sparkling water company Topo Chico in 2017 and increased its sales by 39% in the following year.
In 2020, Coca-Cola launched Topo Chico hard seltzer. It’s Coca-Cola’s first alcoholic beverage in the US since 1980.
Topo Chico hard seltzer capitalizes on the success of its line of sparkling waters.
Craft breweries are diversifying, too.
Oskar Blues Brewing Co. launched operations in 2002 and added hard seltzer to its lineup in 2019.
Making hard seltzer required a few equipment additions in the brewery, but many of the processes were already in place.
The brewer now sells a dozen different flavors of hard seltzer.
As another sign of this trend gaining momentum, Oskar Blues Brewing Co. was acquired by Monster Beverage Corp. (maker of Monster Energy drinks) in early 2022.
Search volume for “Sugar Free Monster” has grown considerably (59%) over the past 5 years.
The $330 million deal brought five craft breweries, a collective known as CANarchy, under Monster’s belt.
CANarchy alone produces 616k barrels of beer and 211k barrels of hard seltzer each year.
Monster is also reportedly in talks to merge with Constellation Brands, which owns brands like Svedka vodka and Meiomi wines.
4. Canned cocktails give consumers a step up from hard seltzer
The ready-to-drink (RTD) cocktail market was already growing pre-pandemic, but it got a huge boost from COVID.
The popularity of canned cocktails is soaring (760% in 5 years).
Although the market still only accounts for about 3% of spirits volume in the US, it grew by 50% between 2019 and 2020.
Data from Nielsen shows that sales of canned cocktails grew 126% in one year.
In 2021, the Drizly Consumer Report said the share of sales of RTDs on its alcohol delivery platform was growing 15x faster than that of hard seltzer.
Canned cocktails are capturing a share of the market that hard seltzers used to own.
Experts say the RTD cocktail market, valued at $782 million in 2021, will surge through 2030.
Many consumers love RTD cocktails for their simplicity and convenience — there’s no need to haul a dozen ingredients to the beach if you and your friends want cocktails.
Consumers who like to experiment with flavors, especially Millennials, are also leading this trend forward.
From a Manhattan to an Old Fashioned to bourbon whiskey with honey, ginger, lemon, and apple juice, there’s a canned cocktail for everyone’s taste.
One of the newest RTD cocktail producers is Social Hour Cocktails.
The company launched three cocktails in 2020 and an additional three in 2021.
In the Ultimate Spirits Challenge of 2021, Social Hour’s Gin & Tonic RTD cocktail earned a rating of 97: extraordinary, ultimate recommendation.
5. DTC alcohol sales see significant growth
When pandemic lockdowns went into place, many states loosened their laws regarding alcohol delivery. Laws vary, but only a few select states specifically outlaw alcohol delivery.
For example, only nine states plus the District of Columbia allow DTC spirit sales. However, 46 states allow DTC wine sales.
The Distilled Spirits Council of the United States is one organization fighting to get the laws surrounding DTC alcohol sales loosened even further.
In 2021, they released a survey that found 80% of consumers believe distillers should be able to ship directly to customers.
Their survey also showed that 45% of customers had already bought alcohol online for direct shipment.
In fact, Rabobank reports online alcohol sales reached $6.1 billion in 2021, growing 131% since 2019.
Other estimates for online alcohol sales are a bit more conservative, but still report massive growth through 2025, more than doubling today’s market value.
Revenue from online alcohol sales continues to grow.
Wine sales make up a large portion of that number. Wines Vines Analytics reports DTC wine shipping increased by 27% in 2020 with 8.39 cases of wine sent out to customers.
Local alcohol delivery has become incredibly popular, as well.
Saucey, an alcohol delivery app, saw post-pandemic sales increase by 400%.
Alcohol delivery service Drizly delivers drinks to your doorstep in 60 minutes or less and reported a 437% increase in sales between the summer of 2020 and the summer of 2021.
Search volume for "Drizly" remains high post-pandemic.
Although the app still operates on its own, Uber acquired Drizly in early 2021 for $1.1 million.
Instacart launched a partnership with Meijer in 2021 to expand its delivery of alcohol in Illinois, Michigan, and Ohio. The grocery delivery service now says its alcohol delivery area covers 75% of households in the United States.
6. Eco-friendly packaging offers benefits to producers and consumers
In the 20th century, packaging alcohol in brown or green bottles was standard because the coating kept the beverage protected from UV rays.
In more modern times, a clear UV coating became available and clear bottles were used.
Now, we are seeing a shift away from glass packaging altogether.
Consumers are demanding more convenient, sustainable, and environmentally friendly ways to carry their alcoholic beverages.
One estimate says a traditional glass bottle has a carbon footprint of 675 g CO2e/l while a wine pouch has a carbon footprint of only 96 g CO2e/l.
Estimated carbon footprints of various packaging options show that pouches and cartons are the most environmentally friendly.
Alcohol pouches are one example of non-glass packaging options. This packaging is lightweight, portable, and resealable. It also has a lower carbon footprint and leaves less waste behind than typical packaging.
Whisky Me is a London-based subscription service that sends customers a monthly sampling from some of the greatest distilleries in the world — all in a pouch.
They’ve got more than 10,000 current members.
Whisky Me’s alcoholic pouches are eco-friendly and easy to ship.
Gone are the days of boxed wine having a stigma attached to it — bag-in-a-box solutions are also becoming popular.
This option offers sustainability and still provides the company with the ability to design attractive packaging via the outer box.
At one UK grocery store, sales of boxed wine were up more than 40% post-pandemic.
Anheuser-Busch released Boxology Cocktails in 2021. The product is being piloted in the southern United States.
MurLarkey Distilled Spirits, a Virginia-based company that was recently ranked among the 25 best distilleries in the US, released their Bootlegged Lemonade Boxed Whiskey Cocktail in 2021.
The distillery uses its lemon whisky and all-natural lemonade to show that consumers don’t have to sacrifice quality when buying a boxed alcoholic beverage.
The first batch sold out through DTC sales in less than three weeks.
The convenience and portability of MurLarkey’s boxed cocktail are a major draw for consumers.
Conclusion
That wraps up our list of the most important alcohol industry trends to watch over the next 3 years.
From low-alcohol options to canned cocktails, we expect to see producers rapidly adapting to the demands of consumers in the months to come. Those who haven’t already expanded their product offerings will most likely move in that direction soon.
The push for more sustainable packaging and on-demand delivery services may even change the way companies market to consumers. These types of changes aren’t set in stone yet, but local laws and consumer interest will play an important role in the future of the industry.
