How will the US beverage alcohol market evolve to meet consumer needs in 2021?

IWSR analyses the key trends driving the US beverage alcohol industry in 2021


Innovation in premium RTD products

Malt-based RTDs have been the preferred choice of many RTD producers, driven by factors such as lower excise taxes and wider points of channel distribution across the US. However, 2021 will see the rise of spirit-based RTDs as the next iteration of premium RTD offerings.

Brand owners will look to extend the reach of their products to attract consumers interested in flavour and convenient cocktail options. IWSR data shows that nearly 50% of consumers in the US place importance on alcohol base when selecting an RTD. Innovation in premium ingredients, alcohol base and flavours will drive the RTD market in the US.


Ecommerce offerings that make it easier to own the consumer experience

The global rise of ecommerce due to Covid-19 transformed the channel into a critical component of market strategies going forward. In the US, ecommerce alcohol sales are expected to continue to increase rapidly, with average annual growth of nearly 45% in value, 2020 to 2024. Put into the wider market context, this means that online alcohol sales will jump to 1.6% of total off-trade volume in 2020 and reach 6.9% by 2024.

Although ecommerce structures are more complex in the US, we will start to see more alignment in the three-tier system, with a move towards easier solutions for brand owners to reach consumers online. Brand owners will also want to own the consumer experience, and we will likely see a rise of white label ecommerce platform services as well as a push toward state legislation to allow for direct-to-consumer shipping where not currently allowed. Access to consumer data will be a key consideration for brand owners evaluating their ecommerce strategies as well.


Relevance with contemporary consumers

In 2019, still wine volume consumption in the US decreased for the first time in 25 years. The downward trend is likely to continue, with IWSR forecasting a -1.2% volume CAGR (2019 to 2024) for still wine in the US. This trend is prompting brand owners to pivot their product offerings. We will see an evolution of wine, with brand owners leaning towards more casual offerings that bring the category closer to younger LDA consumers – recent findings from Wine Intelligence show that US consumers are simplifying their engagement with wine.

With millennial LDA drinkers shifting the dynamics of wine, more accessible packaging and brand messaging, as well as closer alignment with current consumer trends, such as health and wellness, moderation, and sustainability cues, will drive category relevance.


A demand for transparency

The health and wellness movement has fuelled the no/low alcohol category, but it is also making consumers more conscious of what they drink. We will see a growing need for brands to offer more transparency – everything from what’s in the liquid and where the ingredients are from, to how the liquid is made and who makes it. The trend for transparency caters well to the US craft industry in particular, but it also resonates with adult soft drinks and cannabis beverages that focus on functional benefits. The demand for transparency feeds into consumers’ growing focus on ethical consumption as well, which will see brand owners take more accountability for their environmental footprint and social responsibility.


You may also be interested in reading:

What’s driving RTD innovation in the US?
Hard seltzers drive a resilient US beverage alcohol market in 2020
5 key trends that will shape the global beverage alcohol market in 2021


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