The excitement in alcohol, both new products and growth, is around beverages like hard seltzers and ready-to-drink cocktails, Hemphill said.
“Spirits have been kind of the shining star in beverage alcohol,” he added.
For a while the energy was in malt-based type products, but in the past year more spirits companies have joined the trend, he said. Jack Daniels and Coke is one example of a traditional soft drink company and an alcohol company partnering on adult alternative-type beverages, he added.
Pepsi and Boston Beer, for example, have partnered on Hard Mtn Dew. Meanwhile, traditional beer and wine have been soft, he said.
But Hemphill sees a small but growing development in non-alcohol adult beverages with beers such as Athletic Brewing Co.. and spirits—reflecting the growing health consciousness trend. “Those products have improved in quality, and so you've seen more innovation.”
Mark Buonomo, senior category manager, beer/wine/liquor, at Global Partners, Waltham, Massachusetts, which has 353 stores under brands including Alltown Fresh and Honey Farms, said it’s interesting to see the effects of social media regarding consumers connecting quicker with companies.
“And sometimes that means information, good or bad or indifferent, can get posted online and people can react to it,” he said. “And we saw the nation react to a situation with Anheuser-Busch, and it impacted our stores. We have seen the Bud Light brand in decline since that time period.” That situation started with a transgender influencer’s Instagram post with a customized Bud Light can promoting a contest, leading to boycotts and sales plummeting.
However, he said, the domestic beer category in general was showing decline prior to that incident in April 2023.
Buonomo wonders if the domestic beer customer will return to the original brand or move to another brand—or leave the segment for something new.
A sizable number of new legal drinking age (LDA) consumers are not gravitating toward domestic beer, he said. “I don’t think you’ll ever have someone on their 21st birthday said, ‘I want a Budweiser or a Miller Lite,’” he said. “You’ll see them gravitate much more to the newer innovation in the category, the High Noons, the Surf Sides, the brands that did not exist just a few years ago—and now all of a sudden spirit-based cocktails are really hitting that new consumer that has this taste for flavor.”