We recently looked at the unique characteristics of the American beverage trade, including the “three tier system” for alcohol. With alcohol regulation rooted in the nineteenth century and a vast patchwork of different state and local municipal regulations, the sales of alcoholic beverages in the U.S. can be daunting, especially for newcomers. At the same time, there is endless opportunity to take advantage of lucrative niches and achieve market innovations. These are the trends we are excited about in the beverage industry.
Craft everything
Walk up to a discriminating cocktail consumer in 2019 and tell him or her that the American whisky market was all but dead thirty years ago, and they’d surely be surprised. Sparked by changing tastes in the early 2000’s, American consumers developed an unending hunger for all things artisanal. This farm-to-table aesthetic extends to liquid consumable and for the well-heeled drinker of today, they want spirits that are nothing if not “authentic.”
Of course, defining authenticity in spirits is a complicated task. It’s not a very closely held secret that many craft spirits are “sourced” or manufactured by contract with larger distillery operations. But as taste for these specialty brands increase, expect the demand for manufacturing and agricultural resources to follow suit.
Agricultural incentives
The boomlet in micro-craft distilleries can also be chalked up to a changing political climate including favorable financial incentives for entrepreneurs who are willing to use local raw materials in the production of their craft products. New York State is a prime case in point. In 2012, the New York State Senate has passed legislation that provided financial incentives to establish breweries in the state, lowering fees and increasing the production cap for small breweries from 60,000 barrels to 75,000 barrels. Similar “farm to flask” style legislative serves as a boon to small-scale distilleries who use local agricultural products like grain in their whiskeys, bourbons and ryes.
Biodynamic as a buzzword
Situated at the convergence of the wellness trend and environmentalism is the “biodynamic” concept. Just as consumers stopped being pleased by their “macro” brewed beer, so too have they raised the demand for wines that go beyond the “organic” standard. Enter so-called “biodynamic” wines, which are grown with an eye to the natural rhythms (including the lunar cycle) of the vineyard’s ecosystem.
Meeting consumers where they live
Billions of dollars of marketing spending by international conglomerate and macro brewers has cemented the place of alcoholic beverage as a core marker of lifestyle. But as small brands try to get in on the action, we find that the most successful pay plenty of attention to other aspects of their target demographic’s lives including their leisure pursuits, level of disposable income, and even their taste in food. Knowing how to meet that consumer in the perfect niche is so key to the successful introduction of a new brand in the United States.
The critical role of brand ambassadors
Because the U.S. market is so dominated by major distributors, we know that it’s not enough to make sure your product gets some placement in key retail locations. You need a booster who will make sure your product is getting into the hands of consumers. In this changing marketplace, we see the role of brand ambassadors becoming more and more critical. These individuals visit retail accounts, cultivate relationships with distributors, and create experiences that leave a memorable impression in the mind of the consumer.
What trends are you excited about in the beverage industry in 2019? Let us know in the comments.
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