Circana, a leading advisor on consumer behavior complexity, has recently released insights on the beverage alcohol industry. Their report, titled "State of the CPG Beverage Alcohol Industry," highlights a growing consumer appetite for variety. Specifically, Gen Z consumers aged 21-26 are at the forefront, driving innovation in flavor profiles, packaging, and product formats¹.
Here are some key takeaways from the report:
1. Ready-to-Drink (RTD) Cocktails and Hard Seltzers: Despite a slight softening in sales, RTD cocktails and hard seltzers remain widely popular across different age groups and income cohorts. The RTD category has more than tripled since 2018, reaching $10.3 billion in sales in 2023. Variety packs are the top-selling RTD format, outselling single-flavor packs. Brands are also venturing into crossover products, with nonalcohol brands entering the beverage alcohol space.
2. Shifting Preferences: Consumers are moving from value to premium options in both beer and wine categories. Gen Z consumers aged 21-26 prefer sparkling wines and those with fruity or sweet notes. In the beer category, sales remain robust, particularly in the convenience channel. Gen Z also shows a preference for a variety of beer options, including flavored alternatives, Mexican imports, and economy brands.
3. Stability and Opportunities: Beverage alcohol has experienced the least inflation among all food and beverage departments. This stability presents an opportunity for marketers to emphasize value, enhance in-store experiences, and increase engagement through store apps and social media channels. Brands that incorporate high-quality ingredients, unique flavor profiles, and innovative packaging can capitalize on holidays and everyday celebrations.
In summary, exciting flavor profiles, premium ingredients, and innovative packaging will continue to drive innovation in the beverage alcohol industry. Gen Z's influence is shaping the market, and brands that adapt to their preferences will remain competitive
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