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The economic strain of inflation, the rising cost of entertainment, labor shortages, and supply chain issues combine to drive consumers to another location for their alcohol consumption – their own homes. COVID-19 led to a spike in at-home drinking occasions and this trend remained steadfast throughout 2021 and into 2022.

IRI, a consumer data research aggregator, noted that consumers are experiencing several difficulties preventing them from flocking back to on-premise alcohol locations. Labor shortages have led to unpredictable levels of service, evidenced by many on-prem restaurants and businesses’ “Help Wanted” signs in the window.

Research indicates that 75% of IRI’s survey respondents do not plan to go to bars and clubs for summer activities. 8% of respondents will frequent on-prem establishments “less often” with 15% indicating they would participate at “about the same” level as they normally do.

Seltzers and RTDs are Driving Factors

The surging popularity of seltzers and other Ready To Drink cocktails (RTDs) makes for a better home drinking experience. Brands are keeping things interesting with new variety packs that allow people to experiment with different flavors and alcohol types. Consumers get more bang for their buck with these packs and can cater to a wider audience without having to deal with the inflated prices of ordering multiple drinks at a bar or restaurant.

IRI’s research found that seltzer sales are beginning to slow to a more consistent baseline, but they are still a preferred choice for consumers.

Sales for the top RTD/seltzer flavors over the last year include:

  • Variety Pack – $3.9B
  • Iced Tea – $422MM
  • Black Cherry – $399MM
  • Lemonade – $282MM
  • Margarita – $254MM
  • Mango – $205MM

IRI also identified 4 of the top 10 Pacesetters in 2021 – Corona Hard Seltzers, High Noon Sun Sips, Truly Iced Tea, and Michelob ULTRA Organic Seltzers.

Bev alc suppliers can capitalize on the at-home drinking surge by continuing to develop unique seltzer and other flavored malt beverage options for consumers with a variety of flavors and ingredients.

Vizzy is a great example of a brand leaning into the health-conscious preferences of modern consumers. The Molson Coors brand designed their hard seltzer with antioxidants and a dose of Vitamin C.

On-Premise Will Claw Its Way Back

The economy continues to keep the full-scale return to on-premise consumption at bay. While slowly making gains, these establishments must still grapple with inflated costs, labor shortages, and supply chain issues limiting their inventory.

Meanwhile, consumers can opt for BOGO deals through off-prem retail chains, subscription services with at-home delivery for wines, and a wider variety of RTD cocktails that may not be available at bars or restaurants.

Fintech is a trusted source for insights into the bev alc market space. Our blog is constantly updated with new content on trends we are seeing, tips on alcohol business optimization, and more. Check out a recent post exploring hard kombucha and its rising influence on the market.

Data sourced from IRI’s 2022 Mid-Year Alcohol Update

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