7 Trends Shaping The Alcohol Industry in 2016-17

5) Vodka Wonders What’s Next

Vodka remains a tricky category to define. On one hand, its growth was relatively flat in 2015. On the other, vodka still represents 33.7% of all spirits sales, which is more than any other category.

Vodka seems to lose the battle but win the war. The king of white spirits retains its throne in terms of sales, while smaller categories receive all the momentum and press.

Which speaks to the category’s main issue in recent times. Consumers tend to be less excited about premium vodka, compared to top-shelf products in other categories. After the flavored-vodka craze died down, the category has struggled adjusting to today’s craft-driven market.

Grey Goose sales declined 7.6% last year, while Absolut shrunk 2.2%. Meanwhile, mid-level brands Svedka and Skyy grew 2.9% and 2.0%, respectively. Consumers seem to prefer non-premium vodka.

However, there are exceptions. The premium brand New Amsterdam increased 17.5% in sales last year. Burnett’s Vodka showed that craft focus could help resuscitate flavored vodka, as the brand grew 9.7%. Both vodkas were successful in promoting their craft and handmade qualities.

A vodka brand that enjoyed a robust 2015 is perhaps the perfect combination of mid-level pricing and craft qualities. Tito’s Handmade Vodka continued its meteoric rise up the sales chart with a 25.7% gain in 2015.

6) Spikes In Cider and Soda

First it was hard lemonade. Now hard cider and soda have both spiked in sales.

Cider exploded in 2014 to over 28 million 2.25-gallon cases. Last year, it continued to outpace the beer market as a whole, increasing 9.6% to 30.8 million cases.

Those gains, and all the new craft ciders they have supported, owe much to Boston Beer’s Angry Orchard. When the craft beer giant released its own cider line, the category gained the muscle necessary to grab market share. Angry Orchard sales were up 14.3% last year (16.3 million cases), helping raise the profile of hard cider. (The second-best selling cider was Crispin, at 1.99 million cases and up 5%.)

Hard sodas have also been hot lately. At the forefront of this movement is Not Your Father’s Root Beer, which generated more than $104 million in off-premise sales last year.

The sudden success of this brand has mainstream suppliers releasing their own versions, including MillerCoors’ Henry’s Hard soda line and Anheuser-Busch’s Best Damn hard sodas.

Both cider and hard soda have specific advantages with consumers. They are both refreshing alternatives to higher ABV products. And both categories appeal across genders. Their demographics are nearly a 50/50 split between men and women.

Hard soda also fits into the retro trend sweeping through many industries. These drinks evoke the flavors of youth, and also fit into certain classic cocktails that have recently increased in popularity.

7) Consumers Like To Experiment and Learn

So many categories and brands on the rise speaks to the modern consumer’s willingness to experiment.

Looking within categories, wine drinkers are the most explorative: 19% have bought 10 or more wine brands in the past year. That’s compared to 15% for overall beer drinkers, and just 5% for spirits.

What drives consumers to buy across brands and categories? Part of it owes to the adventure of trying something new — a hallmark of the younger LDA generation.

That’s behind the recent surge of flights on on-premise menus. Sampling multiple brands and styles allows consumers to experiment, while also pinpointing their personal preferences.

Education also plays a large role. Today’s consumers love to learn. They want to know more about the background of what they’re drinking: the history, how it’s made, where it’s from and the people behind it.

And it goes beyond specific categories. Today’s consumers actively expand their knowledge about the industry overall. This is why tourism has exploded at breweries, wineries and distilleries.

“One thing I’ve noticed is that instead of having, say, wine from start to finish, consumers will now have all kinds of drinks in one sitting,” Velez says. “The consumer is much savvier now.”

Kyle Swartz is associate editor of Beverage Dynamics Magazine. Reach him at kswartz@epgmediallc.com