New research from global insights specialists EY suggests price-conscious consumers are reducing discretionary consumption and opting for affordable, sustainable solutions when it comes to alcohol.
The EY Future Consumer Index tracks global sentiment and purchasing behaviours of around 18,000 consumers in 24 countries.
Overall, EY’s research shows a pessimistic economic outlook from Western markets compared to emerging markets. “As a result, consumers are increasingly focusing on controlling their spending and readjusting priorities to maintain their lifestyles,” the company says. “The rising cost of living and inflation are also impacting consumer appetite to purchase sustainably despite the continued interest in practicing ‘conscious consumption’.”
Looking specifically at drinking trends, the research shows that 43% of consumers plan to spend less on going out, and 34% plan to spend more time at home. This will impact the on-trade, EY says, but further stats suggest the off-trade is not out of the firing line, either. EY finds that 40% of those surveyed plan to spend less on alcoholic beverages in the next 3-4 months. However, it could be good news for own brands and alcohol-free, as 33% are “willing to purchase private label non-alcoholic beverages”.
Sustainability is still on consumers’ minds, despite the cost-of-living crisis. Around a third (32%) of consumers say they chose a product or service that supports sustainability through recyclable packaging, refillable products, or similar.
EY says most consumers are “responding to beverage price increases by either reducing consumption or switching to cheaper alternatives”.
Speaking specifically about drinks, EY adds that growing price sensitivities and awareness of the climate crisis is accelerating consumer preference for circular business models that reduce plastic waste.
Meanwhile, wider research suggests that sustainability priorities are linked with cost saving, such as reducing food waste and buying second hand goods.
Kristina Rogers, EY global consumer leader, says: “As talk of a looming recession increases in many markets globally, consumer businesses are bracing themselves for further economic pressures. Much like during the pandemic, consumers are quickly pivoting their priorities and adapting to disruption, but are now increasingly pessimistic about the economic outlook, in particular among European markets.”