In March 2020, the majority of nations around the world found themselves entering COVID-19 lockdowns for the first time. Twelve months on, some markets are still facing public restrictions while others are relatively back to normal. However, all markets have experienced changes to consumer behaviour in some way.
Over the past few months, several agencies have published their own versions of the latest global consumer trends. When reading all of these it is interesting to discover there are overarching mega trends in play that continue to be the driving force for consumer behaviour despite the disruption of COVID-19.
According to GlobalData, there are eight mega trends for Fast Moving Consumer Goods (FMCG) that are listed on the left-hand side of the image below. These mega trends are clusters of several similar trends that are set out to look like a train network, thus demonstrating the linkages and overlaps.
Previous market bulletins released by Wine Australia have referred to several of the trends listed below including health and wellness, digitisation, sustainability and ethics.
Figure 1: GlobalData’s Trendsights framework
COVID-19 has resulted in some of these mega trends increasing in priority. The IWSR presented six consumer trends based on the impact from COVID-19 and afterwards. Two of these were assessed to have positive change in the long term: digitisation and health and wellbeing.
Forced to embrace online shopping due to restrictions during lockdowns, ecommerce has become more important than ever for consumers. The IWSR has estimated that the value of alcohol ecommerce grew by 42 per cent in 2020, across 10 core markets to reach US$24 billion. It is even tipping that the United States (USA) will overtake China by the end of 2021 to become the biggest market for ecommerce in the world.
IWSR further notes that for its part, wine has a 14 per cent share of the total drinks market compared to a 40 per cent share online. Most agencies agree that this trend will continue, and Euromonitor recently reported that 74 per cent of global retail professionals expect the crisis-inspired ecommerce boom to become permanent. But it will be important for businesses to continue to embrace news ways of conducting business to remain relevant with rapidly advancing technology along with the demand for it.
Digitisation can address several consumer behaviours highlighted in Euromonitor International’s Top 10 global consumer trends 2021 report. Consumers have been forced to become more digitally savvy and are wanting:
- to maintain convenience and being available on demand – developing a 24/7 online service culture
- a seamless shopping journey across all channels – QR codes, online bookings for example save time, provide information, and guarantee availability
- businesses to prioritise safety – touchless, cashless and clean plays directly into unattended commerce and ecommerce
- businesses to have truthful marketing and dispel misinformation – delivered through more precise marketing on social media and gaming and give consumers a voice, and
- remain connected by seamlessly living, working, shopping and playing both face-to-face and online – this means meeting consumers where they are.
One of the trends identified by GlobalData as one of the ones to watch for the alcoholic drinks sector that overlaps the digitisation mega trend is next-generation shopping (within the sustainability and ethics mega trend). This trend in particular highlights the need to improve on creating seamless, user-friendly experiences. Further to this is the necessity to deal with delivery challenges, with longer than expected delivery time cited as the most common challenge in a Euromonitor International digital consumer survey.
Figure 2: Most common delivery challenges in 2020
Source: Euromonitor International
When it comes to meeting consumers where they are, this is where augmented reality (AR), virtual reality (VR), artificial intelligence, robotics, social media platforms, live selling platforms and virtual assistants provide the greatest opportunities. Euromonitor predict that leveraging technologies such as AR and VR will evolve from ‘nice to have’ to ‘must have’. While gaming is the most typically used AR/VR activity identified in their digital consumer survey, these are also being used to preview a holiday destination or to learn more about things before buying. Livestreaming has also been another emerging avenue to engage digital shoppers in real time. This type of shopping appeals to younger generations.
Health and wellness
The desire to be healthy and well has been heavily influenced by the conditions put in place to manage the spread of COVID-19. The IWSR have observed that this, along with the increasing focus on environmental concerns, is driving organic, biodynamic and low-intervention niche wine segments.
The majority of product development in this space has been focused around beer, hard seltzers, ready to drink and spirits to date. However, the IWSR believe that no and low-alcohol wines are an untapped opportunity – especially given they only represent a small fraction of overall wine consumption and it is seeing double digit growth. Wine Intelligence also agree that there is an unmet consumer need and that this appears across multiple cultures around the world.
Wine Intelligence recently published a chart from the report Opportunities for low and no alcohol wine that shows that Australians have a higher intent to purchase lower in alcohol wines compared to the United Kingdom (UK), USA and Canada, although these markets still have a quarter of the regular wine drinking population intending to purchase.
Figure 3: Intent to purchase: Lower alcohol wine - percentage who would be likely or very likely to buy lower alcohol labelled wine.
Source: Wine Intelligence, October 2020
Notes: Base = All Australian, Canadian, UK and US regular wine drinkers. Red/orange: Statistically significantly higher than 3 / 2 other markets at a 95% confidence level
GlobalData has predicted that ‘moderation and avoidance’ in general is a trend to watch for the alcohol sector citing that a growing number of young and ‘sober-curious’ consumers are experiencing a social life that does not depend on alcohol. Further to this, research conducted by Wine Intelligence identified that when it comes to wine, the category will remain a niche as consumers will still chose ‘standard’ wine most of the time instead choosing to moderate how much they drink. That is smaller amounts and less often. Again, it is the younger consumers driving this trend towards moderation globally.
Figure 4: Alcohol moderation by age: Global view – percentage who are moderating their alcohol intake
Source: Wine Intelligence, October 2020
Notes: Red/blue: Statistically significantly higher / lower than all wine drinkers in each market at a 95% confidence level. LDA – Legal drinking age
Other consumer trends
The agencies producing the reports all have their own versions of consumer trends and there is considerable overlap. However, some of the trends that are not mentioned in this article, but are recommended reading include:
- Increasing acceptance of new packaging formats (IWSR). Purchase of alternative packaging such as canned wine is highest amongst the younger generations (Wine Intelligence).
- Social drinking experiences and expanding choice of occasions, venues and opportunities for drinking together outdoors or indoors (IWSR).
- Sophistication and premiumisation will remain a long-term constant (IWSR) Award-winning and heritage remain strong wine purchase drivers (Wine Intelligence).
- Shift to wines seen as a safe choice and ‘localism’ (Wine Intelligence).