By John Livesey
The headlines tell us that Gen Z and Millenial consumers are drinking less and less. Health is a greater priority and the market for 0% alcohol drinks is achieving record-level growth. But these stats mask other changes in consumer behaviour. One micro-trend that easily gets lost is the emergence of spirits and cocktails as the go-to-drink for younger consumers.
Indeed, whilst Gen Z and Millennials may be shunning ‘binge drink’ culture, they also represent a new ‘cocktail class’. Motivated by the desire for elevated experiences and an openness to new things, these consumers have welcomed the cocktail with open arms.
The numbers are clear. The spirits sector remains resilient despite negative growth for other alcoholic drinks like beer or wine. And, according to the Bacardi Consumer Survey, more than one-third (38%) of respondents plan to drink more cocktails than wine over the next year. (Source: Bacardi/FutureLab)
So how did cocktails become the decade’s drink of choice?
Everyone’s seen the picture. Dianne Abbot sat on the Overground enjoying a cheeky lunchtime Mojito. And we all remember THAT iconic scene in Fleabag where Phoebe Waller-Bridge and Andrew Scott share canned Gin and Tonics.
No-one could predict that ready-to-drink cocktails would become embedded in culture so quickly. And yet Marks and Spencer revealed to RadioTimes.com that in the week following the premiere of episode 2, the retail chain had seen a 24% rise in the sales of its canned G&Ts. (Source: RadioTimes)
And it’s not just M&S that have seen business boom.
Accelerated by the Pandemic, more and more consumers are looking for ways to enjoy bar-quality drinks from their homes. As a result the UK market for Ready to Drink beverages (RTDs) is currently valued at £440 million, and RTD producers have seen revenue increases of up to 42% in the last year. (Source: WSTA)
Evidently this more-accessible, cheaper, and mass-produced alternative to regular cocktails is reaching new audiences: casual drinkers, younger consumers who are new to cocktails, or those who are not prepared to pay a premium price point.
As Dianne Abbot’s faux-pas proves, the RTD trend has led to cocktails being enjoyed in new venues. Globally 44% of respondents to Bacardi’s survey say that ‘relaxing with friends or family’ is the number one cocktail-drinking occasion, replacing traditional environments like happy hours, date nights, and parties. Whether it’s in the park, at home, or indeed on the overground; new drinking moments are emerging, and the RTD has helped bring cocktails out from behind the bar.
The Rise of the Premium
If part of the boom in cocktail consumption is down to the rise of the affordable RTDs, the flipside is consumer premiumisation. Across the board, luxury industries have bounced back with 96% of luxury brands reporting revenue increase in 2022. And the spirits sector is no exception.
The Bacardi Consumer survey revealed that whilst in the UK 30% of consumers say they are now drinking more premium spirits and liquors, nearly half of consumers in Mexico (46%), South Africa (46%), India (45%), and the U.S. (45%) say it’s extremely important for them to drink cocktails that contain high-quality spirits and liquors.
If the cocktail is a symbol of decadence (think of Daniel Craig enjoying a martini, shaken not stirred) it seems that consumers are keen to indulge. And these premium consumers are getting younger and younger. Bain and Altgamma released predictions that the luxury market will be 61% Gen Z and Millennial by 2026. Younger generations crave elevated experiences, classic products, and heritage brands. And the wealth transfer from baby-boomers to their children means that they are able to pay-up. And that’s yet more good news for premium spirit companies.
Democratising Your Drinks
As we’ve seen, cocktails are no longer the reserve of the bar. And that means that cocktail-making is also no longer the reserve of bar-tenders. Bacardi’s consumer research revealed that more than 30% of respondents in the UK are choosing to make more cocktails at home in 2022 compared to 2020.
Evidence of the increased interest in home mixing can also be seen in digital search trends. The volume of searches for ‘cocktails’ on google increased by 59% between 2021 and 2022. TikTok has also become a hub for amateur mixers, with @thirstywhale_ amassing over 600k followers.
Indeed, more people making their favourite drinks at home also opens up opportunities brands interact with their customers in new and exciting ways. Some brands have capitalised on the home-mixing trends by releasing cocktail making recipes, tutorials and collaborations with influencers. Omar Apollo recently released a ‘how-to’ pina colada reel with Buchanan’s whiskey and Amelia Dimoldenberg, one of media’s hottest new stars, partnered with Smirnoff on her own cocktail-making video series.
These strategies take a culturally embedded approach to building the hype around home mixing, keeping cocktails in the conversation and changing habits to keep spirits on the shelf. The attention of a new generation has been captured by the cocktail. And It’s now up to brands to make the most of this untapped opportunity.
At KRPT, we believe in letting culture be the creator and believe. The cocktail is the perfect example of how culturally attuned and creatively-intelligent strategy can create conversation around a product. Cheers to a world of new creative opportunities…