Total bev-alc retail sales reached $112 billion in 2024 but, excluding ready-to-drink (RTD) beverages, no category saw growth in dollars or volume, according to market research firm NIQ. That’s quite a different chart from adult non-alc (ANA) sales, which are now closing in on the $1 billion mark.
The fresh insights come from the data firm’s yearly recap of off-premise trends and a presentation from Wine & Spirits Business Daily’s Summit in Palm Beach, Florida, on Tuesday. Analysts tackled where premiumization is still kicking, how brands can recruit Gen Z, and where ANA is headed.
Here’s the 2024 overview:
- Beer, excluding flavored malt beverages (FMBs) and hard seltzers, shows the largest gap in value (-0.7%) and volume (-2.9%) in the latest 52 weeks ending December 28, 2024, compared to the same time the previous year. Imports, non-alc beer, and super premium beer helped offset declines in lagging segments.
- Excluding RTDs, spirits declined -1.1% in value and -2.3% volume. Beyond RTDs, tequila and Canadian whisky are still performing well.
- RTDs exceeded $13 billion in 2024 off-premise sales, holding a 12% share of total bev-alc dollar sales and up +3.8% in value.
- Adult non-alc (ANA) sales are nearing a billion dollars, at $823 million.
Ready-to-Drink: Gin, Hard Tea and Non-Alc Pick Up
RTDs across segments are picking up steam as the category benefits from flavor-thirsty consumers.
Within RTDs, the top growth segments are:
- Non-alc (+167%)
- Wine tetra (+77.2%)
- Spirit RTD cocktails (+26.5%)
- Hard tea (+17.5%)
- Canned wine (+16.4%)
- Spirits seltzers (+14.1%)
- Hard soda (+4.1%)
Hard kombucha, hard coffee, cocktail shooters, hard lemonade, and malt seltzers are all in decline.
Simple mixed drinks are now a staple of the off-premise too, with the style of spirits-based RTDs dominating 40% of dollar share. Juice cocktails (12%) and margaritas (10%) are also leading in share. Variety packs (10%) and hard tea (4%) are leading sales growth, up +120% and +351%, respectively. Vodka and tequila continue to dominate as base spirits followed by multiple spirits and rum. Gin ranks fifth in dollar sales, but gin-based cocktails are experiencing the highest growth aside from non-alc RTDs (+43%).
Flavor is a trial driver for RTDs, but consumer interest may be stagnating, according to Jon Berg, vice president of NIQ’s bev-alc vertical. When dividing flavored versus unflavored products across categories, consumers are still reaching for their unflavored staples.
“You still find that those items on the backbar that have been there and have always been part of the consumer repertoire still tend to drive a lot of the purchasing cycle, occasions, and drive dollar loyalty or share of wallet as well,” he said.
Premiumization Not Dead Yet
Shoppers are still looking to trade up in spirits, including in RTDs. Premium-plus spirits make up 70% of spirits dollar sales but, excluding RTDs, that number falls to 66%. Otherwise, super premium-plus makes up over a third of straight spirit dollar sales most of the year, but fluctuates with holiday seasons.
“It has faded, and it has faded in the past, but right now, December to December, especially from a big gifting and holiday season, it really held the line pretty nicely,” said Berg.
Education Needed To Develop Gen Z Loyalty
Roughly half of Gen Z are legal drinking age (LDA) and the LDA Gen Z households purchasing bev-alc have doubled in the past two years. Over three-quarters of those households (77%) have purchased bev-alc in the latest 52 weeks and the average LDA Gen Z household spends more than $300 per year on bev-alc (down $55 versus two years ago). But brands will need to work on creating an emotional connection to younger consumers as they find their way into drinking culture.
“The older we are when we’re buying spirits, the more we tend to have a very focused plan purchase,” said Berg. “The younger we are, we still have some more input to gather, we still have some choices to make.”
When it comes to planning spirits shopping, 64% of Gen Z respondents plan to buy a brand before purchasing, compared to 76% of boomers. Right now Gen Z represents 9% of buyers and only 5% of bev-alc dollar sales, as compared to millennials which represent 32% of buyers and dollars.
American whiskey, vodka, tequila and scotch rank the highest in consumer loyalty.
Non-Alc On Its Way To $1B
With ANA sales up $176 million versus a year ago (+27.2%) the category is on fire compared to its full-proof counterparts while still only representing 0.7% of bev-alc sales. Here’s the split in share of dollar sales and growth since a year ago:
- Non-alc beer (84.4%, +25.1%)
- Non-alc wine (10.9%, +27.2%)
- Non-alc spirits (4.6%, +86%)
Most of ANA is consumed by drinkers who are also consuming alcohol, and analysts were quick to point out that while moderation is driving alcohol sales, there’s a spectrum of attributes brands can otherwise tap into. Gen Z are still interested in cultural connections and experiences, where high-ABV products like BeatBox have excelled.
Some brands may “launch a lower alcohol version of some of their products, and they’re combining it with sustainability trends, or other trends, like a calorie count or no added sugar, to really try to capture the health and wellness that consumers might be seeking out,” said Kaleigh Theriault, director of thought leadership of NIQ’s bev-alc vertical.
The top trending stated health and wellness attributes in dollar sales are: free from artificial colors, low-calorie, eco-friendly, non-GMO, and all forms of social responsibility.