Adult Beverages Year-End Trend Alert

Anyone who’s involved in or who follows the adult-beverage industry knows the fourth quarter is all-important. From Halloween to New Year’s Eve, opportunities abound to drive traffic, sales and profits. At retail, the holiday season sees sales spikes for many categories, and store operators are now preparing to satisfy consumers eager to load up on gift packs for giving and unique items for making merry at home. Meanwhile, restaurant and bar operators are preparing to cater to the drink demands of holiday party guests, quench the thirst of busy shoppers and entice revelers to the bar.

As we move swiftly into the holiday season, however, we’re hearing (and reporting) softening in the adult-beverage marketplace. We anticipate that ongoing economic uncertainty caused by the recent government shutdown may have consumers holding a bit tighter to their hard-earned dollars this holiday season. The on-premise sector appears that it may be more affected, although some categories in the off-premise channel are also feeling the effects. That said, there are wins to be had. Here are some thoughts on how to end the year on a high note:

  • Listen to the customer. For suppliers, that means truly understanding retailer and on-premise operators’ current pressures and their business objectives for Q4. Suppliers that offer ideas and innovations to help operators meet their goals will be valued. Operators tell us they are looking to leverage their supplier partnerships and are seeking value from those relationships.
  • Listen to the consumer. The consumer study conducted for our soon-to-be-released BarTAB Report reveals that nearly a fifth of consumers say they now are ordering adult beverages at restaurants more often than they were three years ago; younger consumers significantly over-index. While that’s good news, the same survey showed cost as the most important factor in determining consumer drink selections on their most recent on-premise occasion.  Repeatedly, we hear that price and variety are important factors, whether consumers are purchasing adult beverages on- or off-premise. Consider tactics that highlight variety and selection, but also convey competitive pricing.
  • Deliver unique experiences. The consumer’s new value proposition focuses not only on price but also on experiential elements. In retail stores, knowledgeable staff and product tastings (where legal) can transform a shopping trip into an educational experience and an opportunity to explore a new category and discover the perfect gift or unexpected accompaniment to the holiday meal. On-premise, pairings of special holiday food items with seasonally inspired adult beverages or guided flights of rare spirits, beers or wines introduces a differentiating element to holiday festivities.

Focus on growth categories and segments. Several categories are on fire as we enter the fourth quarter, and now is the time to tap into their momentum. In spirits, we see Irish whiskey, American whiskey, single-malt Scotch, flavored vodka and products showcasing trending flavors such as cinnamon, honey, spice and florals continuing to garner consumer attention and grow in volume. In beer, craft, imports, cider and seasonals are particularly hot. Fruit-forward table wines, red blends and sparklers with sweeter profiles are trending in wine. Strategize now to cash in on these categories.


Donna Hood Crecca

A veteran of the foodservice industry, Donna Hood Crecca leads the firm’s Convenience Store Practice and is active in its Adult Beverage Practice. She develops research-based insights and recommendations for leading and emerging supplier and operator companies to enhance their go-to-market and product development programs and strategies.

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