We like to call this time of year 'prediction season' as everyone has a look into the crystal ball for answers, about what the year will hold. Sometimes they're purely speculative, other times absolutely spot on.
So this week, following on from last week's dive into the cocktail trends of 2023, we're now taking a closer look at renowned drinks analyst IWSR's global predictions on the macro drinks trends of 2023 to answer the question - what will actually be trending here in Australia for 2023?
Right then, let's have a look at some of the key trends:
'As the world enters a period of growing economic fragility, those with financial stability – typically consumers with lower levels of debt and secure employment – will provide increasing opportunities for premium-and-above spirits and wine brand owners' IWSR.
Premiumisation was the buzzword of 2022 and even referenced in the 2022 IWSR trends survey. But this year, with rising interest rates and 7.2% inflation putting a squeeze on household budgets, there is instead a pushback again towards value for money. Interestingly, a portion of households - typically trending older, with low debts - are insulated from this pressure. They're also the drivers of wine consumption, which suggests that wine may continue moving towards higher prices and lower volumes. This leads nicely into the next macro trend!
'The total wine category is in volume decline, in line with historical trends. However, Prosecco and Champagne continue to grow, and the high-end is gaining across all sparkling wine segments' IWSR.
Fizz is booming. As our own Simone Kealy pointed out in this Shout article late last year, Australia is now Australia is the sixth largest importer of Champagne in the world, with 10 million bottles making their way to our shores in the past year.
We're seeing that on Kaddy Marketplace, too, with bubbly sales doubling in just two months last year, with seven out of the top ten sparkling wines of 2022 (by volume) either Prosecco or Champagne.
'IWSR data shows that, globally, RTD value will rise at a CAGR of +7% between 2022 and 2026, outpacing a volume CAGR of +5%. This compares with a volume CAGR of +14%, 2016-2021. The value growth reflects the recent strong performance of premium-plus RTD products across key markets' IWSR.
As the Bacardi trend report identified last week, higher quality RTDs - especially cocktails and premium mixed drinks - are booming, driven by an ever sharper focus on top ingredients and a consumer base now more accepting of the premixed format. It's hard to argue with this trend, especially when it ties in with the nascent non-alc RTD movement.
'Pandemic lockdowns drove rapid alcohol e-commerce growth, prompted by a loosening of regulations, or a boost to existing e-commerce infrastructure, in many markets. As a result, alcohol e-commerce value grew by over 40% in 2020 alone – compared with value growth of 12% in 2019 and 16% in 2021, across 16 focus markets. Over the coming years, growth rates for the alcohol e-commerce channel are set to moderate as the market enters a period of post-pandemic normalisation' IWSR.
Alcohol e-commerce is expected to still contribute an additional $10bn of sales over the next three years, so this trend is more a reaction to the lockdown-enforced COVID world. Wine, the most mature online category, is expected to flatline in the share of e-commerce growth, however, with spirits expected to contribute more value and beer more volume instead.
Here at Kaddy, some of the biggest growth is in craft spirits, with locally made options enjoying boomtime growth while embracing Australian local flavours - as discussed in this feature.
'Growing economic concerns are set to make the at-home occasion even more significant in the future, as shrinking disposable incomes force many people to cut back on visits to the on-trade.
(Also) moderation in alcohol consumption is increasingly being spurred by economic worries and a need to cut household spending. Consumers are choosing to cut down rather than down-trade in many markets.
(Meanwhile) the post-Covid on-premise recovery has been patchy in many locations, with hospitality hotspots thriving but other venues struggling to cope with lower customer numbers and rising costs' IWSR.
Drinking at home was one of the biggest shifts during COVID lockdown periods, and it has spurred consumer drinking habit changes too. The Bacardi consumer survey reports that 37% of people globally are now making more cocktails at home than in 2020, as an example.
The push to moderation is still driven by health and wellness locally, especially given that Australia is in a stronger financial position than many other countries. Contrast that to the UK where half of all consumers are predicted to cut alcohol consumption due to cost-of-living pressures (according to this report).
Millennial drinkers remain the exception locally, with health and wellness drivers intersecting with cost of living pressures to drive no and low alcohol (NOLO) growth (and a further rise in 'switchers').