“Big innovations in the U.S. liquor market are creating new avenues for growth, and there are a number of key trends that New Zealand can learn from to boost local liquor sales. Danny Brager, Senior Vice President of Nielsen’s Beverage and Alcohol Practice recently presented the latest trends and innovation shaping his market to New Zealand suppliers and retailers.
A BIG NIGHT OUT IS REPLACED BY AN EASY NIGHT IN
The way people consume alcohol in the U.S. is changing. And the on-premise channel (restaurants and bars), in particular, is feeling the pressure of these shifting dynamics. The cost of purchasing and consuming food and drinks out-of-home is under more scrutiny; while the rise of online shopping and delivery; access to better quality fast food and prepared meal solutions; and just a growing disposition to entertain at home – is taking people away from consuming food and drinks in other establishments.
FINDING OTHER WAYS TO ENGAGE CONSUMERS ON PREMISE
To try and offset this trend, a growing number of on-premise outlets have substantially increased the number of beer and wine they have on tap – designed to encourage consumers to trial more brands/varieties and improve their overall engagement and experience at the venue. In one specific example, an establishment built a self-service beer wall – offering 56 different beers and ciders. The guest is provided with a wristband that tracks how much beer is poured and is linked directly to a credit card for the purchase.
NEW CHANNEL OPPORTUNITIES – ‘GROCERANTS’
The growth of the ‘grocerant’ – a hybrid of a grocery store and a restaurant – is in full swing across the U.S. Grocerants span the dining atmosphere, with many offering everything from salad bars, sushi counters, freshly made pizza, cheese and deli counters, upscale in-store dining, to a fully licenced bar and liquor store. These outlets let shoppers stroll the aisles with a glass of wine in hand, giving consumers a relaxed and engaging shopping experience. Alternatively, some outlets offer an app where you can upload your shopping list while a sales assistant gathers your goods, all for the price of a glass of wine or beer that you can leisurely consume at the bar while you are waiting.
While grocerants will create tough new competition for fast-food chains and traditional restaurants, it also provides new channel opportunities for liquor brands – both for onsite consumption and retail purchasing.
RANGING NEW FLAVOURS AND VARIETALS
Launching new flavours has been successful in injecting growth into a mature liquor category like whiskey. Whiskey spiked with flavours such as cinnamon, honey and apple represents 15% dollar share of the category and is showing annual growth of 11.5% – well ahead of unflavoured (up 5.1%).
In the wine category, imported wines account for 30% of the U.S. off-premise market and growing at 4.1%. Varietals from Italy, France, New Zealand and Spain have all grown dollar share in the past year. Within Sauvignon Blanc, New Zealand wine accounts for almost half the market (45%) and growing at 11.3% for 2016 – ahead of U.S. wines in this segment (8.2%).
Key trends and innovations in the U.S. liquor market highlight a need to offer consumers new and engaging ways to try, interact and purchase alcohol. Catering for the various demographic groups is also very important. The idea of a grocerant, for example, may be most appealing to Millennials – they can have a fresh and relatively inexpensive meal with their young family, accompanied by a glass of wine, but can pick up groceries at the same time. While Baby Boomers could be more inclined to shop at a big store with a large range, but expect the help of an experienced salesperson to help with their purchasing decisions. The catch then for marketers, is to stay on top of current trends when they’re hot and not stay in too long when things start to cool down.”
By Geoff Smith, Director, Business Development, Nielsen