People visit the M&M store in Times Square on July in Latest York City.
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The Covid-19 pandemic significantly modified consumer behavior from where they shopped to what they bought. That was felt throughout the snacks and spirits industries and a few of those habits have held on, senior executives from Beam Suntory and Mars Wrigley said at CNBC’s Evolve Global Summit.
Jessica Spence, brands president of Beam Suntory which produces quite a lot of spirits, from bourbon whiskeys like Jim Beam and Maker’s Mark to cognac Courvoisier and tequila Sauza, said that “rapidly if you couldn’t exit to your favorite restaurant or the vacations were out of balance, spending slightly bit more on that bottle of whiskey or tequila became a much bigger treat.”
Spence said that resulted in loads of consumers moving to higher-priced brands or “premiumization,” a trend that has continued. She also noted the boom in e-commerce sales, especially within the U.S., where online searching for alcohol has lagged up to now. Amongst online buyers of alcohol within the U.S., 54% said they made their first purchase through the pandemic, based on spirits industry market evaluation firm IWSR.
Perhaps the most important boom has are available the shape of premixed and ready-to-drink cocktails and drinks.
“There have been loads of people experimenting and had the time to rejoice with cocktails, and there have been loads of individuals who realized they weren’t the best bartender on the earth,” Spence said. “While you want that cocktail, possibly you do not need to do all of the exertions.”
Premixed cocktails were the fastest growing spirits category last yr with 42% year-over-year revenue growth to $1.6 billion, in comparison with 30% growth for tequila and mezcal and 16% for Irish whiskey, based on the Distilled Spirits Council of the U.S.
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Ready-to-drink cocktails were second only to vodka by way of volume consumption in 2021, and several other major spirits firms further invested within the category with expectations of further growth. For instance, Anheuser-Busch InBev bought Cutwater Spirits, while Diageo has ready-to-drink cocktails using alcohol from its brands like Ketel One Botanical and Crown Royal.
Beam Suntory has several ready-to-drink options, including On The Rocks cocktails, which use several of the corporate’s other spirits similar to Effen vodka and Hornitos tequila.
“That is something that is going to proceed and the innovation in that space goes to proceed to grow,” Spence said. “It’s a tricky category already but I feel there’s still space to push it more into the premium.”
The candy industry also saw shifts in consumer behavior, said Anton Vincent, Mars Wrigley North America president.
While a few of that was premiumization as shoppers looked for various sorts of confections or chocolates, considered one of the essential trends was around people buying greater packs of candy while they were staying home, Vincent said.
Vincent said because the pandemic has waned, convenience store sales have returned to normal levels, but the corporate continues to be seeing strength in ecommerce and other forms of sales channels, something he thinks points to a bigger shift in viewpoint towards small snacks like candy bars.
“I feel people really got back in contact with treating themselves… in very small inexpensive ways,” he said.