Keeping spirits up: How Covid-19 has fuelled alcohol innovation

By Graham Gibson, co-founder and director, Alcohol Solutions

When an economy is in recession it can leave little opportunity for sector innovation – and yet innovaiton is exactly what is currently happening within the drinks industry to great success.

As consumer lifestyles have significantly changed in response to the pandemic, many big brands and micro-distilleries have been creatively galvanised to meet new consumer demands. Collectively, they have demonstrated great adaptability at a time of great uncertainty. This highlights the robust nature of the industry and provides reassurance that the drinks off-trade sector can weather this latest storm.

In July, the Global Trends Report from IWSR Drinks Market Analysis highlighted key macro trends to watch out for in the drinks industry including Sophistication and Premiumisation, Evolving Traditions and Health & Ethical Consumption. Based on my own business observations demand for intriguing spirits, tropical flavours and low alcohol drinks are increasing which has opened the door on an exciting new era in drinks innovation.  Considering the current societal backdrop, it is easy to see why.

Intriguing, exciting drinks

While people were  encouraged to ‘Eat Out to Help Out’ over the summer, not everyone is ready to return to bars and restaurants just yet. Consumers that made building at-home bars their ‘lockdown project’ have taken the opportunity to research and try out more interesting flavoured spirits, support local distilleries and experiment with cocktail making.

The British spirit boom, bolstered in large part by the popularity of gin has allowed for a plethora of local artisan expressions, across different categories to come to market.  With distilleries in the UK continuing to rise to at least 441 as of this March, and with consumers more in-tune with ‘supporting local’, the market is primed for retailers to benefit from this. Indeed further to stocking local lines, some retailers are starting to create their own house expressions in order to really tap into this trend.

Alongside the appeal of stocking at-home bars with unique spirits comes the cocktail cabinet comeback, which was already in full swing back in April according to data from market analysts CGA. Its Cocktails & Mixed Drinks Report showed that 50% of those who used to drink cocktails in pubs and bars had chosen a cocktail or mixed drink at home during lockdown. Pre-Covid the number was just over a third (37%) and a further 20% were planning to try a cocktail at home – I’d hasten to guess that these figures have only grown over the last few months.

Lockdown created totally different drinking habits that are sticking. Consumers wanting to create a ‘big night in’ to take away from the merging of days and weeks opted for more premium, intriguing spirits.  Now still, the desire to elevate the at-home drinking experience remains true which provides ongoing opportunity for brands and retailers to fulfil this need.

Holiday drinks at home

As 2020 has become the year of the ‘Great British Staycation’ consumers are embracing every opportunity to emulate holidaying abroad, at home. There has been a huge interest in tropical flavoured spirits as brands tap into this trend – think pineapple, mango, papaya infused rums, gins and mixed punch drinks for socially distanced gatherings.  As distilleries continue to bring these authentic, fruity expressions to market, retailers would do well to curate this holiday drinks experience down the aisle with compelling themed displays and promotional offers that excite their customers.

Health & Wellness

Long before Covid-19 the health and wellness trend fuelling the low and no-alcohol category was growing quickly, with customers demanding more variety, better tasting and higher quality products. Covid-19 and lockdown highlighted the importance of getting regular exercise and with millions tuning into Joe Wicks’ daily workouts many people took the opportunity to prioritise their mental and physical health. Now, the launch of the Government’s Better Health campaign has created further impetus for producers to up their game and innovate their offerings further. 

Consumers want to drink responsibly, enjoying a social lifestyle without taking on a calorific load – and this is outside of events like Sober for October and Dry January. Building pace alongside the low and no-alcohol category is the Hard Seltzer movement, the product of which are characterised by their light, fresh taste and low calorie offering. Their rise in popularity has also been amplified by social gathering restrictions in the wake of Covid-19, their canned, functional nature making them the ideal choice for picnicking and garden parties.

The drinks industry has indeed had to navigate incredibly choppy waters this year but observing how drinks brands are reacting to market trends, adjusting, innovating and moving forwards is incredibly reassuring from any standpoint.

Alcohol Solutions (alcohol-solutions.co.uk) is an independent company specialising in drinks innovation and development. The company works with micro-distilleries through to multinational brand owners to produce new drinks, to meet the changing demands of consumers.