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Sunday, May 19, 2024

The next pour

Rowena Curlewis peers into her crystal ball to reveal the key trends and challenges that are set to dominate the drinks industry in 2024

 

As the clock ticks into 2024, the dynamism of the drinks industry promises another exciting year ahead, continuing to be a sector full of innovation. Take lo-fi wines, made with minimal intervention, these textural drinks have a similar profile to beverages such as kombucha, and are popular with Gen Zs and a great intro to wine. They are ones to watch as the style hits the mainstream this year.

Yet, at the same the time volatility of supply chains – geopolitics, climate change, economic instability – means brands will need both flexibility and creativity to weather short-term issues, while they look to make long-term changes to ensure their – and the sector’s – sustainability.

Here’s a glance at some major trends and challenges for the year ahead.

The next steps for sustainability

Sustainability and the environment will continue to – and must be – a focus for the drinks industry over the coming year, particularly as the latest research shows the world nowhere near on track to hit the UN’s climate goals. The drinks industry is already witnessing disruption from changing weather patterns, so many in the sector know they need to be stepping up their efforts to boost their sustainability, while others desperately need to catch up this coming year. Efforts will include a focus on eco and ethical liquids, with increasingly inclusive and sustainable initiatives that go beyond the traditional eco-claims. Brands have also started to realise that they need to do much more than just recycling or offsetting, so expect circularity and bio-responsibility featuring more heavily.

In particular, the industry needs to look carefully at how people are making sustainability claims, particularly around the legislation for imagery, symbolism and colour. Australia’s Competition and Consumer Commission (ACCC) recently released its draft guidance on environmental and sustainability, and Principle 7 will be of particular interest to the EU, UK and US legislators in their efforts to prevent green washing through semiotics. Marketers and brand designers must be thinking carefully about how to communicate messaging responsibly in 2024.

At the same time, minimalisation is a growing trend. The response to Denomination’s design for Crate (below) – a wine with no label and full utilisation of the capsule space instead – has stimulated conversation about the different ways brands can strip packaging down to its bare minimum to reduce a drink’s footprint. Can we replace the conventional stopper options? Can we create a pack using one material instead of multiple materials? The next stage in innovation has begun.

Bring the bar home

With the cost of socialising outside of the house growing every week, helping people ‘bring the bar home’ is going to be a big trend this coming year. Younger consumers, in particular, are increasingly unable to afford eating out. For brands, the key is to remember that people still want to get together, so if they can’t afford to in the traditional ways, give them new opportunities for special moments at home.

This results in consumers increasingly stocking their shopping baskets with ‘little’ luxuries. It’s a prime opportunity for RTDs and beer to attract those trying to make their budgets stretch that little bit further, as the cost of a bottle of wine or gin is increasingly seen as comparatively prohibitive. From the briefs Denomination is getting across our three studios, clients are investing heavily in innovation that will drive interesting and disruptive formats, and engaging activation that brings experiences beyond the traditional tasting formats.

RTDs find their sparkle

A wider premiumisation of RTDs is also on the horizon, which are going to be offering more elegant and interesting products and branding. Pernod Ricard is already teaming up with other brands to combine its premium spirit Absolut Vodka – with Coca Cola’s Sprite and also with Ocean Spray’s cranberry juice – as ready-to-drink pre-mixed cocktails in 2024.

However, there will be even more disruptive formats, innovative product combinations and interesting flavour combinations that will engage and excite in the year ahead, from a sector that has been traditionally focused on lower price points with generic liquids. RTD cocktails have only really just got started, and so have a lot more space for growth: the IWSR recently predicted RTDs’ volume growth to rise by 12 percent by 2027.

The future of luxury and premiumisation

As purses tighten, how do expensive and luxury brands get people to part with their hard-earned cash? This is the question that will be driving this category in the new year. Expect to see the unexpected, with collaborations that encourage consumers to see brands differently and increase the aspirational pull. In Asia, dark spirits in particular are investing heavily in design, packaging and liquid to entice discerning customers, while even more unexpected brand collaborations that make consumers think differently about the brand and increase the aspirational pull are growing too. Small batch and niche ingredients will also continue to be a driving trend: for example, in Australia, where Tasmanian whiskies are commanding high premiums for tiny batches, while Penfolds special releases, such as Yattarna V, sold out immediately upon release; and in Scotland the freshly reopened Brora is selling bottles for eye-watering amounts as they start to release new liquids.

Quiet luxury has been a hit in 2023 and this year it will extend its reach as the trend moves from fashion to drinks: which brand will be the Loro Piana of drinks in 2024? For the super wealthy, they will be getting more and more experiences that are uber exclusive: in a category where anyone with money can buy an object, only a few can be invited to those truly luxury tasting experience – for example – and it drives talkability and desire.

At the other end of the scale, we will see the premiumisation of more everyday drinks brands that have a focus on sustainability, as it becomes a bigger priority for businesses and the consumer. For example, bag-in-box brands, especially in wine, are getting new forms and premium graphics that will help to elevate this more sustainable format in the new year.

Time for tequila

The spirit has been huge in North America for some time, but its spread across the rest of the world seems has only got started. However, in 2024, is looking to make huge gains in other markets where people who enjoy big flavours and smoky cocktails will gravitate into mezcals and aged tequilas – especially as Scotch prices continue to go through the roof.

Los Dias Magicos Tequila

We’ll also see more crossovers between categories: products such as tequila cask-aged whiskies and dirty vodkas are examples of innovations that 2024 will see a lot more of.

Lower consumption

The trend for low and no alcohol is not disappearing, and will continue to grow in 2024, particularly offering increasingly premium and innovative options. This will move beyond just ‘zero’ alternatives to ‘better for you’ botanical based drinks with adaptogens and other wellness ingredients. A prime example is the apéritif-inspired Botivo, whose new bottle designs highlight its craft credentials. We’ll also see a shift away from “non-alc” versions, such a ‘no’groni, to brands that simply stand for refreshment for adults, especially with the increased popularity of Asian ingredients such as yuzu.

Although zero or low alcohol beer is still less than two percent of the global beer market, it’s only going to increase, as Gen Z continue to show declines in alcohol consumption and moderation across the board. The trend is unavoidable, so the sector needs to provide more engaging and richer choices for those who are cutting back and interrogating their consumption more carefully.

What else is and isn’t coming with us from 2023?

Just when you think there’s enough celebrity endorsed or partnered brands, think again! Even as 2023 draws to a close the celebrity drinks brands are still rolling in, with Ricky Gervais ( below) joining the ranks as co-owner of Dutch Barn Orchard Vodka maker, Ellers Farm.

Others this year include the launch of Michael Buble’s Fraser & Thompson Whiskey, a blend of Kentucky bourbon and Canadian whiskies, while Matthew McConaughey and his wife Camila McConaughey recently announced their joint tequila brand, Pantalones Organic Tequila, and Woody Harrelson jumped into the mix with the launch of the Holistic Spirits Company. Harrelson’s celebrity booze offering combines another big trend from this year that’s likely to continue: the focus on wellness. Harrelson says his vegan vodka and gins provide consumers with a “better way to drink” as they use sustainable distilling methods and are packed with “all-natural and functional ingredients”, such as artichoke and green tea leaves. The industry will continue to see these celebrity drinks brands launches across the sector from wine to non-alc. Attaching a brand to a celebrity is a sure-fire way to capitalise on a celebrity’s reputation and attract a new audience, and that’s not going away in 2024.

What’s likely to die out is harder to say. Potentially hard seltzer might have hit its peak, but it’ll still play a key role in meeting consumer needs for refreshment and low calorie until something else comes along to trump this. It’s likely that consolidation is ahead in some categories, where there is almost too much choice. Gin and craft beer, for example, should be looking at this carefully, as consumers – fatigued by new brands every week – will gravitate back to the familiar.

Whatever happens, the ever-evolving landscape of consumer tastes will keep the industry on its toes and the year ahead promises a delightful concoction of premiumisation, homebound indulgences and a serious focus on sustainability. Let’s raise our glasses to that.

Rowena Curlewis is CEO and co-founder at drinks branding specialists Denomination 

Rowena Curlewis
Rowena Curlewis
Rowena CURLEWIS is co-founder and CEO of Denomination, an international drinks branding specialist. Her insight, passion and knowledge of the drinks sector makes her a recognised industry figure. She has lectured and chaired panels in design, innovation and drinks packaging around the world. www.denomination.com

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