Hard seltzers and ready-to-drink alcohol cocktails are what’s growing in alcohol, Hemphill said.
Hard seltzers, however, have slowed in 2022 and have taken “a bit of backseat to other alcohol alternatives like spirit cocktails.”
Jon Berg, vice president of beverage alcohol thought leadership at NielsenIQ, Chicago, said there’s been a “seismic shift” in the ready-to-drink segment. “And whether it’s a new flavor or a functional beverage difference, all of those things really hit a fever pitch during 2022,” he said, adding the intense shortening of product life cycles has been the biggest issue.
A shortened life cycle can be due to distribution issues or lack of shelf space, he adds. Another reason is many suppliers test a new product in a select location, then roll it out wider or pull it back to “retool and come up with a different idea,” he said.
On the heels of RTD growth is the non-alcohol trend, Berg adds: “That has been really interesting to watch and see who has gravitated to those products.”
In recent years, spirits have done a “premiumization escalation,” Berg adds, and tequila is the most important growth area in RTD alcohol. Tequila, he said, “lends itself to (premiumization) because it has blanco, anejo, reposado variants, which come through aging, and consumers are gravitating toward that.
However, a retailer must be licensed to sell tequila, a significant restriction, Berg said.
Wine under $10, meanwhile, has encountered the biggest headwinds, Berg adds. “A lot of those shoppers who were buying inexpensive wine are now either buying ready-to-drink products or going back to craft beer as part of their repertoire,” he said.
To stay competitive in beverages, c-stores should determine if they have the right product mix for immediate consumption and bigger sizes for the take-home consumer, Lyons Wyatt said. Consider promotions and deals to boost sales—and ensure consumers are informed. “Use digital signage, some of the apps, things like that,” she said.