Though retail sales indicate a surge of alcohol buying and inferred consumption increase among Americans, the reality is that the rise of alcohol consumption in the US this year comes primarily from only one-third of the population – those who feel comfortable with carrying on with ‘normal life’ during the pandemic. Alcohol consumption growth has been broad-based, though millennials and Gen X appear to be the most enthusiastic drivers of the increase.
Most US consumers, however, have kept alcohol consumption on par with pre-Covid-19 habits. These consumers report that they are still hesitant to return to normal life, even as restrictions ease. There are significant contrasts between the behaviour of the 35% of consumers who seem comfortable at present and confident about the future, and the 57% majority who are markedly uncomfortable with the status quo and more generally fearful.
• Comfortable consumers tend to be younger, urban, and drinking a broader repertoire of alcohol, and they have tended to spend more during the pandemic; they have also maintained a social drinking habit, be it on-premise or at private social occasions.
• Uncomfortable consumers are more likely to be older, suburban, spending less per unit, believe they are drinking about the same as previously, and unlikely to be doing much socializing.
A key trend that accelerated during the pandemic in the US was drinking across various categories based on occasion. The category-switching story during Covid-19 is in fact a category expansion story, in which consumers increased their drinking habits across all categories. Most report consuming more beer, wine, whisky and (to a lesser extent) vodka, and increasing their intake of hard seltzer which rose the most. There was also more reported interest in niche premium categories. Interestingly, few categories saw a net decline in drinking levels overall in the US.
In terms of purchase behaviour, perceived change in spend shows some positive volatility, with consumers more likely ‘trading up’ in volume rather than value. Recalled purchase formats reflect this trend, with increases in multiple-unit purchases (cases/multipacks), whereas single-unit purchases show net declines.
The biggest change in channel usage in the US has come from the growth of online, though big box retailers have also seen an increase. Channels such as liquor stores and specialist shops have suffered most, though less so if they had a thriving online platform.
Brandy Rand, COO Americas at IWSR, notes, “brands should focus their messaging and strategies to target the LDA population that has adapted more easily to life amid Covid-19 restrictions. Although a minority, these consumers are drinking more, value variety and spend more disposable income.” She adds, “brands should also create strategies that resonate with the needs of the majority – these consumers are focused on at-home consumption occasions, boosting their savings, and enjoying low-key activities, such as food and drink experimentation.”
The insights from this article are based on the recently published IWSR Covid-19 Consumer Tracker Report series, published in collaboration with Wine Intelligence. The Covid-19 Consumer Tracker is an in-depth consumer sentiment research report series identifying and tracking the impact of Covid-19 on the consumption of and attitude to beverage alcohol in 16 markets. If you are interested in more information about the report, please contact us.
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