Top 10 drinks trends for 2017
If there’s one theme that’s influenced the alcohol sector over the past few years, it’s craft. The explosion of independent breweries and distilleries over the past decade laid out the principles of craft – small batch, high quality, provenance and experimentation, writes digital agency Kerve.
The big brands have been quick to co-opt the design cues and language of these independent producers.
In some cases they’ve simply bought those who were challenging them.
Encouragingly for consumers, the major players also seem to have adopted the independents’ taste for experimentation, in product, packaging and marketing.
“Sick of all things establishment and big business, consumers turned their backs on the big faceless homogenous brands that had provided for them and satisfied them, and their parents, for decades.
“Consumers thirsted after smaller, more credible brands and business that reflected the values that they had been forced to adapt,” said Elliot Wilson, strategy director at The Cabinet.
In this round-up we will examine how this increasing experimentation by brands, and the changing tastes of consumers, influenced the alcohol sector in 2016; and conclude what it may mean for marketers in 2017.
The full Kerve drinks trends report can be found here.
1: Will the craft bubble burst?
Market research group Mintel found that half of Americans think that brands describing their products as ‘organic’ or ‘artisanal’ are doing so as an excuse to up their prices. So is craft a bubble that’s about to burst?
If consumers are losing faith in artisanship, craft beer would appear to be among the first sectors at risk. The Brewers Association however, is bullishly predicting that craft can increase its current 5.5% share of the US beer market to 20% by 2020.
The big breweries are certainly betting on UK growth, with SAB Miller buying our longstanding clients Meantime Brewing in 2015, and AB InBev buying Camden Town Brewery in 2016.
There’s no sign of a slow-down among the smaller breweries either, with SIBA reporting that UK independent brewers increased production for the seventh year running in 2016.
The craft ‘bubble’ shows no immediate sign of bursting. In fact, with younger drinkers moving towards premium brands, and Brexit’s weakening of the pound improving British exports, the UK’s craft bubble looks set to get bigger.
Trend-hunting consumers will move on from gin to premium Tequila, but the gin category will continue to grow with greater flavour experimentation and hyper-localisation from independent distilleries fighting to make a name for themselves.
The smaller craft breweries will also become hyper-localised in their business models and distribution. Those breweries who do break through on a national-scale will face stiff competition from the corporates’ ‘craft’ brands and craft acquisitions.
2: Tastes will become more adventurous
Consumers are developing more adventurous tastes for food and drink. Increased travel, the litany of cooking shows, YouTube food channels and Instagram food porn, all expose us to new ingredients and flavour combinations. And our knowledge of and taste for the unusual is valuable social currency.
The craft beer sector in particular is taking a more-is-more approach to product innovation. Colorado’s New Belgium Brewing teamed up with Ben & Jerry’s to create the fiendishly rich sounding Chocolate Chip Cookie Dough Ale.
Meanwhile, on this side of the Atlantic, Somerset’s The Wild Beer Co. has launched beers that taste like bonfires and peanut butter. Mixers are becoming alcoholic drinks in their own right. Pedrino’s sherry based tonic, Fentiman’s Alcoholic Ginger Beer and Henry’s Hard Soda Cherry Cola are blurring the lines between mixer and main drink.
By tapping into customers’ nostalgia for the flavours of their youth, this emerging category is predicted to make a 175% year-on-year increase in sales during 2016.
Nostalgia will continue to play a big part, with craft breweries partnering with food brands and soft drinks to develop new flavour variations, and hard soda continuing to grow, particularly at the premium end of the spectrum. Wineries will desperately try to get a slice of the fruit fusions category that Echo Falls currently owns.
3: Clean drinking
The continual growth of the health and wellness movement is changing the lifestyle and purchasing decisions of consumers. The number of vegans has increased by 360% in 10 years and ‘clean-eating’ bloggers are becoming household names. Crucially for the alcohol sector, millennials are drinking less than the generations before them.
Breweries, distilleries and wineries are putting fresh and local ingredients front and centre in their response to consumer demand for healthy choices. For some brands, such as Scotland’s Caorunn Gin, the use of local ingredients is at the core of their ethos. Bompass & Parr’s ‘Anti-AGin’ is made with botanical ingredients like collagen, nettle, Gotu Kola, chamomile, witch hazel oil and burdock, which make the drink “the alcoholic equivalent of a facial”.
Brands will tweak existing recipes to reduce sugar, and breweries will start offering more gluten-free and low-carb beers. The use of natural and local ingredients will become more commonplace and far more talked about by marketing departments. Brands will seize upon the success of Supernatural’s alcoholic juice bar, to launch alcoholic juices and health-centric pop-ups of their own.
4: Packaging becomes a product
As the unboxing video phenomenon shows, packaging is fast becoming as important to consumers as the product inside. Many brands are using it as a platform to demonstrate innovation and engage tech-savvy consumers. And, as McDonald’s ‘McTrax’ music station and KFC’s ‘Watt-a-box’ phone charger prove, your product needn’t have any inherent tech connection for your brand to play in this space.
The cardboard beer carrier Budweiser created for basketball team Cleveland Cavaliers is a near perfect marriage of brand, opportunity and engagement. Once back at their seats, fans can fold the carrier into a headset and insert their phones. Then, via the Cavaliers’ mobile app, they can access four VR videos, including a tour of the locker room and player introductions.
LED screens delivering product and brand information will become commonplace on high-end wine and spirit bottles over the next few years, as the cost of production lowers. Festivals will see a surge in convertible VR packaging such as Budweiser’s. Conductive ink will be used to create interactive experiences on cans and bottles. And at least one brewery will launch a six-pack that turns into a bluetooth speaker.
5: Getting physical
Despite the travails of the high street, eCommerce is still predicted to amount to just 19.3% of total UK retails sales by 2019. In fact, the giants of online retailing, from Amazon to Warby Parker, are now opening physical stores.
Why? Because physical stores create intimate, brand-focused experiences. Many brands are turning to the pop-up shops to deliver these experiences. Pop-up bars and tasting events have long been part of the alcohol sector’s marketing arsenal. But over the last few years the scale and creativity has increased, as each brand tries to one-up the pop-up before.
Meantime Brewing’s Make Time For It campaign culminated in building the world’s smallest bar. Every visitor to the tiny pub received a free pint and a personalised bottle of Pale Ale to take home, under one condition: they had to hand over their phones on entry, so they could appreciate the crafted elements and beer away from digital distractions.
Brands will launch pop-up retail experiences which sell the lifestyle their brand embodies, rather than just the product. For instance, pop-ups from high-end champagne brands will host tailors or couture dressmakers, jewellers, and furniture makers.
On a more playful note, partnerships with food companies will see brands launch alcoholic ice-cream parlours and sweet-shops. The big operators will open ‘local’ micro-breweries and distilleries, with unique recipes made from local ingredients.
6: Sensory overload
Music has soundtracked dining experiences throughout the ages. Evidence, even if unintentionally, that we understood that enjoyment of food and drink was determined by more than just taste and smell. But it’s only since Heston Blumenthal burst onto the scene in a cloud of liquid nitrogen that sensory dining has become familiar, and demanded by consumers.
Stella Artois commissioned The Roots to write two new songs for them. One song used high- frequency sounds to bring out the sweeter flavours of the lager, while the other used low-frequency sounds to enhance the bitterness.
Bubble Lick’s edible alcoholic bubbles come in a pack of six bottles, to which you add any drink you fancy before shaking them up and blowing them into the air.
Brands will partner with perfumeries to create limited edition drinks, and will experiment with serving alcohol in other textural forms – ice creams, jellies, crumbs etc. Far closer attention will be paid to the music being played in pop-up bars, with choices being made to improve the drinks not deafen the patrons.
Similarly music will be chosen for adverts based on its effect on the drinking experience, not just its suitability to the visuals. And if anyone can do something to improve the smell of city centre pubs when they first open that would be appreciated.
7: Alternative realities
If you thought Pokemon Go was a flash-in-the-pan, think again – it’s still making $2m per day. It brought augmented reality into the mainstream and helped justify the multi-billion dollar predictions for AR and VR. Tim Merel, Managing Director at Digi Capital, forecasts that AR and VR will generate $150 billion in revenue by 2020.
In 2015 Jim Beam created a 360 roller-coaster like CGI tour of their distillery, and we at Kerve created a 360 video tour of Meantime Brewing’s Greenwich brewery. This use of VR, to educate consumers about a brand’s craft, is still the most popular use of the technology among the alcohol sector.
With its low barrier to entry, AR is the big opportunity. Expect brands to take Pokemon Go’s use of contextual, GPS powered content as a starting point. Festivals provide a great opportunity, providing connectivity issues can be remedied. A safer route may be branded tours of cities’ cultural spots, such as street art locations.
VR will continue to grow but, with the low proliferation of headsets, brands will concentrate on delivering experiences via Google Cardboard, at gigs, sports events and the like. In these instances the alcohol brand will act as the provider of the content rather than the focus of it, similar to Budweiser’s partnership with Cleveland Cavaliers.
8: Wine breaks from tradition
Wine is on the up. While millennials drink less than the generations above them of almost every category, they consumed 36% of all wine purchased last year in the USA. Not only did they drink more, they drank more expensively: a Wine Market Council survey revealed that 17% of all millennial wine drinkers paid over $20 for a bottle in the past month, compared to 10% of all drinkers.
This popularity is due to recommendation apps and younger, less stuffy brands making wine more accessible and relevant to the millennial audience. Australian newcomers Cake Wines are connecting with younger drinkers by behaving like a beer or spirit brand. While their wine comes from the Adelaide Hills they operate from a warehouse in Sydney’s inner-west, at which they host DJs, street-food festivals and talks from chefs, other winemakers and artists.
Far less technologically advanced, but proving equally popular with younger drinkers, are wine pouches and cans such as those from Union Wines. Their smaller portion size appeals due to a combination of smaller households, concerns about packaging wastage, and people wanting to try a greater range of wines.
New wine brands in the UK will adopt the marketing platforms of the other alcohol categories, moving into music, street art and street food. Similarly, wine bars will move beyond the 1980’s suits and champagne stereotype. Canned, bagged and boxed wine will move past its association with cheap plonk and become standard options for many brands.
9: Thinking and drinking local
The backlash against globalisation which led to 2016’s dramatic political changes is also leading to big changes in consumer behaviour. Big is no longer better: consumers want more personal and intimate experiences and products, reflective of their locality. Millennials in particular favour local businesses.
Done right, hyper-localisation strengthens brand recognition and a company’s place in the community, and improves ROI. The recent £1bn boom in UK gin distilleries owes a lot to the hyperlocal behaviour of the producers.
Yorkshire’s Masons Gin sources its botanicals from their surroundings, including their own juniper bushes. Bristol’s Psychopomp meanwhile, hand-delivers to the local on-trade, sells directly to consumers from the small bar that fronts its premises, and produces bespoke own-brand gins for Bristol restaurants and bars, with flavour profiles specific to the venue’s identity and menu.
National marketing campaigns will become more locally sensitive, helped by big data and the increasing proliferation of digital OOH placements. National retailers will give more prominence to local producers, and producers will put more effort into sourcing (and talking about) local ingredients.
Craft breweries and distilleries will become increasingly regionally focused, with only a few big operators chasing national distribution.
10: Getting personal
Just 10% of consumers find what they’re looking for in online content, according to Christophe Primault, CEO of GetApp. Hyper-personalised advertising seeks to solve this problem by moving beyond the usual personal data to look at customer’s wider interests, opinions and attitudes, values and behaviours.
Absolut recently announced the winner of a competition to design a new bottle that uses data and the internet-of-things to personalise the drinking experience.
New York agency Huge took the top prize, with a design that allows users to record a personalised message that plays when the bottle is opened. Other entries included a cap that unscrews only for designated fingerprints.
And how about a wine based on your DNA? Send Vinome a swab and, using ten genetic markers related to smell and taste, they’ll send you a bottle from their Californian winery based on your ‘Vinome’ – your unique taste profile.
The features of Absolut’s bottle will appear across many other brands’ packaging. Breweries and distilleries will enable customers to create their own drinks in micro-runs, either via their websites or at tasting sessions at their taprooms and venues.
Once the excitement of personalised labels wears off (and thus the ability to sell them disappears), customers ordering direct from brands will receive personalised bottles as standard.