The world has changed considerably in 2020.
Travel has ground to a halt. Shops have shut their doors. Pubs, bars and restaurants have been empty.
Covid-19 has challenged the whole drinks industry to rethink how it operates.
Yet consumers have adapted. Overall drinks sales have remained surprisingly resilient.
Off-trade alcohol sales in the UK are expected to grow by 16% in 2020 (Mintel).
E-commerce has taken centre stage. 25% of alcohol e-shoppers in the UK are new to the experience this year (IWSR).
Consumers are still drinking, just more at home.
The on-trade has rapidly innovated too, adopting technology to support social distancing, contactless ordering and engaging customers remotely.
A slow return to a new different
There will be no immediate switch back to how things were. Vaccination rollout has now begun, but it will be at least 6 months, likely a year or more, before we can expect a full return to bustling indoor venues again.
Moreover, much of the mindset and behaviours consumers have developed during the pandemic will persist.
It’s not just a slow return to how things were. We’ve entered a new, more digitised world which is here to stay. By 2024, beyond the spikes of lockdown, the total value of online alcohol sales in the UK is predicted to be 50% higher than it was in 2019 (IWSR). 80% of hospitality venues that have introduced delivery as a result of lockdowns this year intend to continue to do so beyond the pandemic (KAM Media).
So, what trends can we expect in the drinks industry in 2021?
Enhanced e-commerce
Diageo now forecasts the overwhelming majority of its growth to be driven by e-commerce sales (WARC).
Diageo’s ‘What’s your Whisky’ tool was used in the on-trade prior to the pandemic, featuring as one of Rewrite Digital’s Pioneers in Digital 2020. With many bars shut, the machine learning whisky matching service has now been exclusively integrated into Asda’s online shopping experience.
Following the successful introduction of ‘Hakkasan at Home’ across London, the Michelin-starred restaurant has now launched a nationwide wine delivery service, further broadening its reach.
While e-commerce can break down geographical boundaries, additional tariffs imposed by Brexit will limit imports and exports with the EU. Consumers are also demanding more localised services, like Norwich Urban Collective.
It will no longer be enough to simply offer e-commerce in 2021. You have to add value to compete – from multi-vendor baskets to personalisation and marketing automation.
Premium at-home experiences
Getting your drinks served to you in a bar can feel like an exciting, indulgent experience – one worth paying a premium for.
Consumers are looking for something similar in the at-home experience from the moment the box arrives to finally enjoying the liquid itself.
Lucky Saint bakes a branded experience into its packaging and at-home ‘serve’. Yeastie Boys’ Digital IPA has a QR code which leads drinkers to view the recipe, places to buy the ingredients and social media where they could discuss their own remixes of the beer.
SingleCut made the QR code a bit more beautiful and playful with its launch of ‘Big In Japan’. Drinkers were challenged to guess what songs are represented by the motifs. When scanning the code, Spotify opens up to play the track.
Bacardi’s European chief is certain the trend for ordering pre-mixed high-end cocktails to drink at home is here to stay and is going head-to-head with bars with a D2C offering. Bacardi recently acquired Tails Cocktails, normally selling pre-mixed cocktails in litres and kegs to bars and festivals, but has pivoted to deliver to consumers directly.
Consumers will want to premiumise their at-home drinking experience in 2021. Is your digital capability ready to address this demand?
Virtually real
On-trade, off-trade and producers will continue to vie for consumers’ attention through virtual experiences.
In December, Pernod Ricard is hosting over 60 free online masterclasses to help consumers take their Christmas cocktail skills to the next level.
Pubs and entertainment venues are already running events such as quizzes and gigs with both a physical and virtual audience. Expect more of this to come in 2021. And for experiences to be a growing source of revenue too – like Northern Monk’s virtual tours and samplings linked with physical deliveries.
Going beyond Rekorderlig’s multi-sensory ‘Rekorderland’ – another of Rewrite Digital’s Pioneers of Digital 2020 – how can we deliver richer immersive experiences at home too?
Virtual Reality still requires hardware that most people don’t have, although the latest PS5 and XBox Series X games consoles with advanced ‘haptic’ vibrations could bring deeper sensorial experiences into more homes.
Unlikely to waft our way in 2021, but Zoom’s founder, Eric Yuan, talked recently about his vision for introducing multi-sensory features such as handshakes and coffee aromas.
Standout innovation
When the on-trade is off limits, in-store promotions are cut back and out of home advertising has a much reduced reach, brands have to work harder to get into the public consciousness. The proliferation of new producers in recent years, increased product releases and now the extended reach of brands online has made it harder to stand out.
We expect to see brands that create unique new products or activations, particularly in digital, to perform well next year.
Diageo recently crowned TheQ winner of its MAD//Fest pitch, promising a new path for the group’s brands to connect to consumers via their mobiles with sport, games, and other live events next year.
There’s lots to look forward to in 2021. Whatever, and however you’re drinking, the role of digital in the drinks industry is set to be more significant, and critical, than ever before.
Are you ready?
Rewrite Digital has delivered digital transformation strategies and roadmaps for some of the world’s leading drinks organisations. If you are interested in a free 30 minute video/phone consultation to evaluate your digital maturity and effectiveness, get in touch at info@rewritedigital.com.
