The past few years have been turbulent to say the least, and many people are unsure about what’s coming next for the world of drinks brands and retailing.
In the latest of YesMore’s regular series, four industry experts – a drinks marketer, an audience researcher, a drinks buyer and a drinks brand – shed some light on what they think will be the major developments in the industry in 2023.
Zara Irving, head of client services, YesMore drinks marketing agency
It’s been a challenging year for marketers in 2022, with the effects of Brexit, changes in government, the impact of the war in Ukraine on production costs and a rise in the cost of living.
On a more granular level, it’s now much harder to track sales from digital ads with the introduction of more cookie restrictions. The bad news for 2023? The cost of living crisis remains front of mind, and consumers will be much more selective about the drinks brands they purchase.
The good news? If you’re a retailer, they’re likely to come to you as they hold back on spending in the on-trade.
For brands, there are still lots of ways to resonate and connect with audiences through marketing. Point-of-sale and paid-for media will move further up to the top of the funnel, focused on driving brand recognition rather than at the pointy end of driving awareness into conversions. Paid-for social media ads will grow email databases, which will in turn drive conversions.
However, I predict that by 2024 consumers will be sick of email newsletters and percentage discounts. Social media platforms will double down on their ecommerce functionality, most likely led by Elon Musk and his new toy Twitter. And I can safely bet we’ll all continue to cringe as Instagram continues to copy Tik Tok’s features.
Rebecca Ironside, qualitative director, Made You Think Research
The current economic climate is forcing consumers to make spending decisions on shifting sands. This makes trying to predict trends and behaviour more difficult, but by staying close to consumers and their lives, we can get a good sense of their future intentions.
Consumers love the freedom of going out again, but as costs rise, or disparities emerge in their social circle’s incomes, this is likely to be reduced in favour of spending time in their own or other people’s homes. We expect to see a continued elevation of in-home drinking, with an ongoing growth in home bars as spaces to display and enjoy drinks.
In spirits especially, consumers are seeking differentiation and talking points around bottle design, brand story and flavour. While consumers are being watchful about spending, there is a desire to reframe alcohol spend as less-but-better, which means choosing premium brands for sipping and, perhaps, trading down for mixed drinks or cocktails. Brands can offer reassurance on aspects like taste and the drinking experience, which in turn offer value.
Switching to a cheaper brand but getting less enjoyment can feel like an expensive mistake, which no one can afford to make these days.
Joseph Turner, buying manager for wine & spirits, The Co-op
With the cost of living at a record high, consumers are expected to channel their spend into two main areas next year: well-known brands and private label.
Shoppers will look for the reassurance of a trusted brand to ensure they aren’t disappointed. This could lead to less-frequent experimentation in wine and spirits and a shift towards the category stalwarts.
In equal measure, customers will be seeking out great value, so retailers’ private labels and exclusive ranges will need to be competitively priced. We expect growth in the popularity of great-value offerings from eastern Europe, especially labels which promote much-loved grape varieties.
Our recent listings of Moldova’s Tilting Tree Merlot and Sauvignon Blanc, which retail at £6 a bottle, are great examples of this.
Within spirits the demand for flavour shows no sign of slowing down and we expect to see further innovation launching in 2023. What’s exciting is that it’s not limited to one category, with pretty much every major spirits segment getting in on the act, from the resurgence of fruit vodka through to more complex flavour profiles, such as Tamnavulin Cabernet Sauvignon Cask Edition Speyside single malt, which launched exclusively in The Co-op.
Matt Price, product and brand manager, Salcombe Distilling
Purpose is the word for 2023. Purpose-led brands will continue to take centre stage next year as consumers are gaining more understanding of environmental and societal issues, and know more about their health.
Brands will need to be clear and confident in their offerings, as the ever-savvier consumer starts to recognise messaging with connotations of greenwashing or fake health claims. On top of this, with the cost of living crisis set to continue, purchases will be made more carefully, with extra thought going into why a specific brand or product should be chosen to be consumed, shared with friends or family, or posted on social media.
Authentic brands that genuinely care about the planet and the people who live on it will need messaging that’s honest, simple and concise, whether it be about supporting a cause or a health-focused functional ingredient. Every drinks brand has the ability to become a pro-planet brand if it correctly aligns its values.
When it comes to functional ingredients and health-focused messaging, it’ll largely fall to the exciting low/no space, although full-strength alcohol brands can win by promoting responsible drinking and focusing on the purpose of the occasion. Consumers will purchase and consume brands that they know are good for themselves, good for their communities and good for the planet.