By Jo Taylorson, head of marketing and product management at Kingsland Drinks
The drinks industry is facing challenges from all angles, from global disasters affecting local supply chains and material costs to changes in personal alcohol consumption and tough economic conditions impacting demand. However, with the right understanding of what’s driving this difficult climate, insights, product development, clear communication and appealing branding, drinks suppliers can tune in to the opportunities 2024 offers.
As an industry, we need to be agile and stay ahead of the game to give consumers choice, value and flexibility at affordable prices at a time when every penny and purchase counts. Critically, brands and retailers need to prove value to justify price increases and keep the consumer committed to purchase and continuing to climb the price ladder. Areas for optimism include in-home socialising habits, convenience and value for money, appetite for new flavours and formats, concern for the environment and sustainability, lower ABV drinks and mindful drinking, and the benefits duty reforms in wines and spirits could have on purchasing behaviour.
Overall, we’re seeing a “drink less, drink better” attitude among consumers; they’re drinking less or opting into lower ABVs options and going out less. When they do either, they’re doing them better. This is especially the case when it comes to wine and spirits. Yes, they want to enjoy excellent drinks, but it’s not necessarily about it being cheap – they want good quality, tasty products and experiences at an affordable price.
Below are some of the key areas and trends to watch out for in 2024 across wine, spirits and RTDs.
Cost of living – value is more important than ever
A challenge for the whole BWS category is the cost-of-living crisis, especially when you consider it in the context of the political and economic climate. Value and quality reign supreme for UK consumers who – more than ever – are watching their spend. While many people are reducing their consumption in hospitality venues, the opportunity for retailers is clear. We know from previous economic downturns that some consumer groups will trade down within their existing supermarket shop, looking for lower priced items, yet others will shop around and buy their wines and spirits when they are on promotional offers or look online for discounts. Value and well-priced premium products are the order of the day here, and getting your mix right will keep consumers on the price ladder.
Consumers are making choices with their budget in mind. Campaneo – hailing from Spain and backing lesser-known regions such as Campo de Borja - has built real momentum and a cult following of consumers and wine critics. In 2023, we expanded the range with the addition of a new Sauvignon Blanc variety and a new 2.25L Bag in Box (BiB) format, which extends the offering into new parts of the market that have gained momentum and tap into the consumer mindset right now.
Developed specifically for the value end of the market, Campaneo wines have the look, feel and taste of a premium wine brand, but at an affordable price point.
In the can
Canned RTDs have been met with an explosion of popularity in 2023, and this is set to grow even further in the year ahead. They’ve landed into retail with bright, eye-catching packaging designs, purse-friendly deals and discounts alongside punchier RRPs, helping to drive spend and have been embraced by those looking to try new drinks on the market without having to purchase expensive bottles or multiple spirits and mixers. They’re loved especially by urbanites and those who crave convenience and simplicity, looking for affordable drinks to suit their lifestyle and current trends.
Mix Up canned RTDs aim to offer consumers quality at an affordable everyday price. Earlier this year, we expanded the range to include three new flavours: Mix Up Coffee Rum & Cola, Pink Gin & Diet Lemonade, and Apple Rum, Lime & Ginger Ale, which have been flying off the shelves and are positioned to win in the current context. The packaging grabs attention on shelf, while communicating the refreshing nature of the drinks.
The beauty of these products is that the single-serve measures encourage trial and experimentation. It is an extremely cost-effective way for consumers to try new flavours, products and brands, plus they’re portable, making them ideal for taking to parties, or for enjoying on-the-go on the way to events and festivals. Watch this space for further new product developments in the spirits space in 2024.
Wine reforms meet mindful drinking
The new wine reforms and duty changes introduced by the UK Government in 2023 have forced producers, importers and retailers to speed up development and innovation in wines with lower ABVs. Alongside this, some consumer groups actively want to cut down on alcohol consumption or moderate for different drinking occasions and are seeking out wines with lower ABVs. This will continue in 2024 and is an example where the changes can help retailers boost sales.
For example, earlier this year, Andrew Peace expanded its UK portfolio of Australian wines and introduced a range of new lower ABV SKUs. The wines tap into the trend for lower ABV wines to moderate alcohol consumption, while addressing recent duty changes the wider industry is navigating. Critically, they don’t replace the brand’s existing range, but instead make it more attractive to consumers.
We know that many consumers are going to be moderating their drinking in the year ahead, while also looking for more sustainable brands to back with their spend. Andrew Peace is perfectly positioned to meet the consumer head on, on both these counts. By offering lighter options and expanding the format that consumers can buy into, we’re hitting multiple pressure points.
Flavour of the month
Our onsite NPD team constantly researches and tests new flavour combinations, profiles and liquids. In 2024, we’re confident vodka will continue to grow as gin consumers shift categories and that rum will still be the darling at home but work even harder to pave the way for darker spirits like whisky. Equally, tequila’s stronghold in the on-trade will start to take hold at home.
Our insights team expects to see Asian flavours such as yuzu, citrus notes such as pink grapefruit, and florals such as blossom, rose, and hibiscus to come to the fore in 2024, coupled with a surge in new drinks launches containing well-known classic ingredients such as coffee, ginger, cherry, elderberry and mint and smoky flavours in aromatic cocktails, ciders and spirits.
No and low alcohol drinks
As health concerns continue to grow, consumers double down on mindful activities, and the market and brands really bringing their A-game to the category with NPD, no and low alcohol drinks are here to stay, and we’d advise all retailers to consider this segment seriously.
Contemporary drinkers are moving away from sweet, sugary alcohol-free wines or spirits, and looking for satisfying, stylish grown-up drinks that don’t compromise on taste. In the past, non-alcoholic drinks were an option for those who do not drink alcohol, such as designated drivers or pregnant people, but this is no longer the case. Looking to 2024, we expect these drinks to become even more mainstream, with creative zero alcohol spirits (such as tequila), RTDs and wine-based drinks using botanicals, herbs and spices, citrus and exotic fruits. Shoppers are prepared to pay a premium for these to give them an elevated experience and an unusual alternative to alcoholic drinks.
Flexible formats
Wine faces the challenge that it is quite a traditional category, with glass bottles being the most widely accepted format. But bag in box wines are in good growth within the sector as consumers realise and embrace the benefits the format brings to drinking occasions.
Bag-in-box wines have become increasingly popular over the last couple of years, predominantly due to changes in lifestyles, budgets and circumstances. Bag-in-box has seen a surge in demand as casual at-home drinkers have recognised the benefits in terms of convenience, freshness, quality and value for money. Plus, bag in box is lightweight, helps prevent wastage and the wine can stay fresh for up to six weeks.
At Kingsland Drinks, we have taken some of our most popular wines into the bag in box format, and several of our customers have diversified into the format to tap into the opportunity.
Sustainable sips
Sustainability will continue to be a key focus in 2024 as brands and consumers become more environmentally conscious. Brands highlight their efforts to reduce their carbon footprint, use eco-friendly packaging, or support conservation initiatives to help build brand credibility and awareness. These stories resonate with consumers who want to make a positive impact through their purchases.
Our Australian wine brand, The Hidden Sea, as an example, has a compelling but simple story – for every bottle consumers buy, it supports the removal of 10 plastic bottles from the world’s oceans and rivers.
Meanwhile, Pod Pea Vodka is a vodka made from peas and is built with sustainability at its heart. Pod Pea Vodka was created with the guiding principle to source everything locally (Manchester), which cuts emissions typically generated from bringing ingredients and materials together. It is made from British peas from the beautiful farms of Somerleyton Estate in Suffolk, before being fermented and distilled in Manchester. The vodka is bottled in vessels made from transition glass, which is glass before it is turned into flint. By skipping this step in the processing, it allows for less waste.
The labels are printed on wood-free, FSC-certified paper, with no plastics and foils, and the team are currently exploring ways to make the cork compostable.
Regions to watch
We still have an eye on Eastern Europe as a wine region to watch, with wines from Romania, Bulgaria and Greece presenting great value wines with mainstream appeal. But Ukraine is the emerging territory set to take spotlight in 2024. Earlier this year, we signed a landmark deal to import and distribute six Bolgrad wines from the Ukraine into the UK drinks market. Bolgrad is a well-known favourite in Ukraine, and is the number one brand for still wines, and while the brands have a premium positioning (RRP from £10), we know British audiences will welcome it with open arms and will be astounded by the high quality of both the native and international varietals.
We’re expecting to see more wines from Ukraine landing on British shelves in the year ahead, and we’re excited about the potential the country’s wine industry is showing under such difficult circumstances.
Summer of sport
We’re expecting a bumper summer season for alcohol sales, thanks to major sporting events such as the Paris Summer Olympics, Euro 2024 in Germany, and other national and international tournaments. Viewing parties in the home and garden are set to dominate the sporting season, with alcohol a key component of a successful screening.
Bag-in-box wines for sharing or for splitting over several occasions, cans, RTDs and crowd-pleasing wines are set to be the big winners over the summer months, so retailers should ensure they’ve done their research and refreshed drinks fixtures ahead of time.
We also see the trend increasing for daytime and early evening gatherings in the home, and more informal parties rather than high-tempo big nights out to night clubs or bars. So laid back, casual, easy drinking beverages are what will be in demand over the summer 2024.
NAM Implications:
- Anyone in BWS categories has to benefit from taking these trend forecasts at face value…
- …and treating them as ‘what ifs’ as a final check on 2024 strategies.
- Unless you want to re-do all this ground work?
