However, North America’s 2.3% growth last year provided a shot of optimism in an otherwise sobering global landscape.
What’s keeping US alcohol sales afloat?
An emphasis on premiumization of ingredients is replacing the focus on generating large profit margins through mass commoditization. The shift in business priorities has led to the sales of craft alcohol encroaching on the mainstream alcohol revenue, especially in the beer segment, Senior Alcoholic Drinks Analyst Spiros Malandrakis told BeverageDaily.
“People are drinking less, but better,” he said
The premium liquor segment is also growing, particularly in the darker spirits like whiskey, according to the report.
Rum and vodka are among the worst performers, dropping in popularity partly due to the over proliferation of flavors.
“They pioneered the idea of flavor innovation, but the flavor overload came back to bite them and human nature followed the trend to its death,” Malandrakis said. “Whiskey hasn’t made the same mistake.”
Whiskey’s simplified and streamlined flavor profiles that are paired with natural ingredients like honey are what consumers now prefer combined with the cyclical nature of spirits consumption, Malandrakis added.
“We’re not drinking our father’s drink, we’re drinking what our grandfathers used to drink.”
The word 'craft' loses meaning
The word “craft” has taken on a nebulous meaning, as the craft alcoholic market becomes more crowded, according to Malandrakis. He sees the word being replaced by other terms such as “independent” and “micro” to help breweries and distilleries better distinguish themselves.
“While terms such as authenticity and craftsmanship are losing traction, the trajectories of sophistication, moderation, perceived exotic credentials, accessibility and restrained yet grounded aspirational attributes remain the key driving forces fuelling pockets of buoyancy,” Malandrakis said.
Alcohol beverage innovation will take on a faster pace, creating new and unexpected flavor combinations.
The innovation cycles will become much faster, the taboos of certain flavored liquors like whiskey will start to diminish, Malandrakis said.
"Consumers are looking for authentic stories, non-glitzy premium cues, adventurous or irreverent experimentation. People are more knowledgeable about most things, alcohol is part of a wider trend."
Malandrakis sees the rise of cannabis in the US playing a huge role in the larger market, serving as an adversary for hybrid alcoholic beverages.
“People are only now waking up to the fact of hybrid infused cannabis drinks,” Malandrakis said.