Experts reveal the top trends the drinks industry is going to see in 2022, and how brands can successfully navigate them.
2021 was the year of tequila and mezcal. Hard seltzers and RTDs saw record-breaking sales, and the espresso martini stole the show at bars and restaurants. Sustainability was a MAJOR topic. The majority of brands also moved online, offering customers a top-notch e-commerce experience with incredible technology and unsurpassed CX.
This year, we’re going to continue to see all that, and more. 2022’s trends are driven by the effects of the ongoing pandemic. We spoke to some of the USA’s drinks experts, who shared with us the trends that will be taking over the industry in 2022, and what brands need to do for optimum growth.
Sustainability as an attribute rather than a buzzword by Brigid McCabe
(Director of Growth Marketing for global importer, distributor, and service provider MHW Ltd.)
Consumers are sending a clear signal; shopping sustainable brands will continue to become the norm rather than the exception. Millennials and Gen Z will choose a sustainable brand when it's available and are willing to pay an upcharge for this important quality.
An example of a global wine brand leading the way in 2021 is Schenk Wine. Schenk is creating a carbon-negative winery and testing a recyclable wine bottle made of cardboard.
The number of choices in 2022 is expected to grow as more brands make changes to improve their impact on the environment.
E-commerce and online ordering by Brian Rosen
(Founder and Chief Executive Officer of BevStrat, a boots-on-the-ground alcohol sales team)
What grew from a pandemic emergency need, is now mainstream. There have always been issues with ECOMM and beverage alcohol. The weight, the cost of shipping, vintage and inventory issues, and state line restrictions. Those were always the MOAT issues that the industry used to protect itself.
With Drizzly and Reserve Bar and the many larger regional chains focusing on their own back yards, there is success to be had for real-time delivery, local shipping, and average cart increase. As 2022 begins, the brand that does not have an ECOMM relationship with a 3rd party provider and a supplier that does not help to create their own pull strategy will fail.
Bourbon and online tastings by LC May
(Brand Ambassador of Clyde May’s Whiskey, and grandson of Clyde May)
I believe our industry will continue to send the growing trend of brand ambassadors hosting bourbon tastings via meeting platforms such as Zoom, WebEx, and Google Hangout. These meetings played a huge role during the COVID-19 pandemic, and they have continued even as markets have opened up. These meetings have allowed ambassadors to introduce their brands to more consumers than ever before.
Visual Creativity for millennial and Gen Z drinkers: Packaging and Social Media Innovation Translates to E-Comm and On-Premise Sales by Brigid McCabe
Visual UGC has become a key consideration for consumers aged 21-39 across all CPG verticals, sparked by the evolution of social media platforms like Instagram and TikTok. And it's no wonder – 90% of information transmitted to the brain is visual, and visuals are processed 60,000 times faster than text.
In order to survive and thrive, brands must take advantage of this survivalist human trait by story-telling through real-life videos, fan consumption occasions, and of course – attractive packaging. This consumer set considers packaging design and appeals much more heavily than past generations because what they show and consume is an extension of their identity. Conventional labels, advertising, and "stock" images of your products no longer cut it. Especially during the pandemic, consumers are living their lives online.
Of course, this raises the bar for new brands entering the U.S. to not only have their labels stand out against the competition, but also attractively communicate key attributes in 5 seconds or less – all while staying compliant. MHW advises on and handles TTB label approval, having submitted more than 100,000 labels to this regulatory body over the last 25 years, and are some of the foremost experts on labeling. We can also advise on visual marketing materials so that brands can produce creative assets that are compliant and can legally be distributed in your key markets.
One example is RTDs. Aside from the sheer convenience of not having to mix our own cocktails during the pandemic, ready-to-drink cocktails have become a vehicle of the global "visual" marketing trend because consumers consider this presentation format to be new and exciting.
Our client Siponey, who supports honeybees which are critical to the earth's ecosystem, produces a delicious canned honey cocktail that creatively incorporates metallic honeycombs in vibrant yellow on a slim and tall can. Online or in-store, the consumer connects the dots instantaneously that this brand is about the bees, looks stylish in hand, and validates their core sustainability values.
Another example is wine products that are disrupting traditional wine packaging status quos. Fun Wine is a client of ours who was picked up nationally this year by Republic National Distributing Company Partners for their "Better for You" Category. Focused on eliminating the pretense often associated with traditional wine, the Miami-based Fun Wine Company makes wine fun for every drinking age while keeping prices affordable for mass appeal. Tapping into Instagrammable culture, they worked with renowned graffiti artist Miguel Parades to create unique, work-of-art bottles that have picked up speed in top chains across the U.S.
Working in contradiction to the above packaging innovation trends, supply chain shortages will continue in 2022 with more delays in componentry, bottling resources, production lead times, shipping, and warehousing solutions.
Brands that invest in end-to-end supply chain management will see more market continuity and be able to introduce more competitive SKUs and designs. MHW created the Concept-to-Commercialization program to answer this emerging need from our clients. Brands should revisit supplier management relationships regularly over the next year and plan 6-12 months ahead of their usual production schedules, especially for new launches. 2021 and 2022 are the "Golden Era" for new products entering the US, but the X-Factor is managing the process with utmost precision.
Capital investing markets are ripe by Brian Rosen
Given the ever-present fear of inflation, the capital markets are ripe to invest in the AlcBev space. Brands are non-correlated assets that are not always subject to the levers that plague the market. Unemployment, GDP, price of gas, and while important, do not seem to move the needle too much in the AlcBev brand channel- in terms of terminal value.
We are seeing PE firms like InvestBev Group spending millions of dollars in the category with dizzying positive results for their investors and the suppliers they invest in.
Regional whiskeys taking over home markets by Murphy Quint
(Head Distiller and Director of Operations, Cedar Ridge Whiskey)
Of the more than 2200 active craft distilleries currently in the U.S, 70 percent are outside of the traditional whiskey-producing region of the south. The West and Midwest are growing most rapidly with regional loyalty fueling consumer demand.
In 2020, Cedar Ridge became Iowa's number one selling Bourbon. The first craft distillery to claim that title in their home state outselling legacy brands. This accomplishment was a testament to consumers' knowledge that great whiskeys can be created anywhere and embracing brands founded in their backyards. It's really the whole buy local concept applied to whiskey.
Regional distilleries are becoming similar sports teams. For example, I love baseball. I'll watch pretty much any baseball game. But I cheer for the Cubs.
Third-party sales support will be more needed than ever in 2022 by Brian Rosen
There were over 20,000 TTB applications put into the government in September 2021. This will flood the market in 2021 Q1 and continue to make the market as challenging as ever. The reliance on your distributor to "sell and market" your beverage gets more challenging.
The successful brands will be brands that hire 3rd party sales and marketing companies, like BevStrat, to push your brands into the marketplace. The model that BevStrat pioneered will be copied and duplicated throughout the USA as the consolidation continues.
As suppliers, you need to change the behavior of the consumer daily and clearly communicate what your value to them is. You are not creating a new drinker; you are converting one from another brand.
Looking back on 20 years of prediction lists, it is clear to me that the best brands have one thing in common: active and aggressive suppliers. Given the list for 2022, you will need to be aggressive, sell with passion, and dominate your competition.
Whiskey and tequila by Roy Danis
(President & C.E.O., Conecuh Brands)
I have been involved in the whiskey and tequila business for much of my career. I can't recall a time previously when there has been more consumer engagement and interest in these categories. This heightened consumer interest inspires us to innovate and provide the best possible product selection to our discerning consumers.
Quality Improves as Craft Distilleries come of age by Murphy Quint
According to the American Craft Spirits Association 2021 Data Project, there are currently more than 4,000 DSPs across the United States and roughly half of those are craft distilleries. While many are still new, the quality of their products continues to improve each year with the age of spirits and experience.
Cedar Ridge is a great example. When we began distilling in 2005, whiskey was just a passion project. With each year we gained experience and a reputation for making Iowa corn bourbon becoming ADI's Distillery of the Year in 2017. Today, we produce more than 125,000 proof gallons and continue to win awards for our products as they age and we continue to experiment.
Additionally, craft spirits will gain ground as direct-to-consumer shipping becomes a bigger part of their go-to-market strategies. No longer hamstrung by needing to start with a classic distribution model. New policies for shipping allow consumers more immediate access to new craft spirits.
Continued consolidation of traditional distributors by Brian Rosen
Even as this piece is being researched RNDC acquired a distributor. By the end of 2022, the 3 bigs will be; RNDC, Breakthru, and SGWS. This underlines the need to use 3PL's like MHW who can allow a brand to grow independently in the market. They will be a cornerstone of any brand launch and survival.