NIQ Global Intelligence plc · NYSE:NIQ
NIQ Global Intelligence — Sipping into the Future: Four Beverage Alcohol Trends for 2024 webinar
64 slides from NIQ Global Intelligence's conference presentation, December 2023
Slide 1: Sipping into the Future: Four Beverage Alcohol Trends for 2024
Webinar Sipping into the Future: Four Beverage Alcohol Trends for 2024 Jon Berg, Vice President of BevAl Thought Leadership at NIQ Matt Crompton, Client Director, Americas, at CGA by NIQ Drew Hummel, Client Solutions Director at CGA by NIQ Kaleigh Theriault. Director of BevAl Thought Leadership at N
Slide 2: Important Housekeeping Notes
Important Housekeeping Notes This webinar is Slides will be Questions? Ask being recorded! emailed out! them in the chat! © 2023 Nielsen Consumer LLC. All Rights Reserv ed. 2
Slide 3: Today's Presenters
Jon Berg Matt Crompton Jon.Berg@nielseniq.com Matthew.Crompton@nielseniq.com Today’s Presenters Drew Hummel Kaleigh Theriault Andrew.Hummel@nielseniq.com Kaleigh.Theriault@nielseniq.com © 2023 Nielsen Consumer LLC. All Rights Reserv ed. 3
Slide 4: Today's Outline
Today’s Outline Webinar: Sipping into the Future Shifting Shopper Behaviors Dynamic Demographics Characterized by lifestyle changes that Evolving consumer demographics, emphasize convenience, wellness, and particularly focusing on unique scenarios sustainability. This shift is evident in with Gen Z
Slide 5: On Premise and Off Premise Total Alcohol
On Premise Total Alcohol +1.9% Latest 52 weeks ending 10/7/23 dollar change vs year ago Off Premise Total Alcohol +1.5% Latest 52 weeks ending 12/2/23 dollar change vs year ago © 2023 Nielsen Consumer LLC. All Rights Reserv ed. 5
Slide 6: Shifting Shopper Behaviors
Shifting Shopper Behaviors © 2023 Nielsen Consumer LLC. All Rights Reserv ed. 6
Slide 7: Shifting Shopping Behaviors
Shifting Shopping Behaviors Convenience Wellness Sustainability • Can or bottle options in the right • Desire for transparency with • Sustainability and corporate pack size for the type of offering in inclusion of “free from” stated responsibility the off premise and on premise attributes • 92% say
Slide 8: Shopping Priorities for Total Alcohol: Friction-free retail
Shopping Priorities for Total Alcohol: Convenient Location 44% of respondents agree that a Convenient Location is an important factor for choosing their in-store location. 44% Friction-free retail and technology stretching to fit lifestyle preferences Low Prices 36% of respondents agree that Low Pri
Slide 9: Convenience is driving growth of dining outlets
Convenience is driving growth of dining outlets while key drink-led sub-channels are also in YoY growth Dining Channel % Change Drinking Channel % Change (October 2023 vs October 2022) (October 2023 vs October 2022) Total Dining 2.8% Total Drinking 3.1% Quick Service Restaurant 7.0% Neighborhood Bar
Slide 10: Top Beverage Alcohol wellness attributes
Top Beverage Alcohol wellness attributes span from social responsibility to “better for you” Trending health & wellness attributes for Total Alcohol – Dollar % change vs year ago Insights powered by NIQ NIQ off-premise channels Total Product Insight data +17% +32% +10% Vegan stated +49% Eco Friendly
Slide 11: Non Alc Cross Purchasing
Non Alc Cross Purchasing 94% of Non Alc buyers are purchasing Alcohol-containing Beer, Wine, or Spirits Source: NIQ Omnishopper, Total U.S., Latest 52 w eeks ended 07/15/2023 © 2023 Nielsen Consumer LLC. All Rights Reserv ed.
Slide 12: Non Alc gaining from categories across Beer, Wine, and Spirits
Non Alc gaining from categories across Beer, Wine, and Spirits Shifting TO Non Alc Beer, Wine, and Spirits Competitive Analysis Interaction Index Still Wine $4.9M 90 Hard Seltzer $1.4M 140 Tequila $1.1M 135 Beer $479.8K 85 Sparkling Wine $337.5K 126 Ready to Serve $281.2K 239 FMBs $230.8K 116 Non Al
Slide 13: Non Alcohol in Beer, Wine, & Spirits in the On Premise
Non Alcohol 1 in 7 Beer, Wine, & Spirits in the On Premise 14% of consumers have non- alcoholic alternatives (i.e. non-alcoholic beer, spirits, cocktails) when in the On Premise 24% Of ages 21-34 Which of the follow ing have you had in bars, restaurants or other similar venues in the past 3 months?
Slide 14: Dry January drives non-alc trial in bars & restaurants
Dry January drives non-alc trial in bars & restaurants 29% 44% of consumers took of consumers say part in they Very likely/Likely Dry January 2023 to take part in Dry January 2024 SOURCE: CGA BY NIQ US ON PREMISE IMPACT CONSUMER RESEARCH SAMPLE (394 - 1988) © 2023 Nielsen Consumer LLC. All Rights Re
Slide 15: Gen Z and Millennials show increased engagement with non-alcoholic drinks
Gen Z and Millennials show increased engagement with non-alcoholic drinks Top 3 reasons for choosing non-alcoholic drinks when out – Gen Z 41% to be healthier -9pp vs Millennial 35% to save money +3pp vs Gen X NEW! 31% to try something new +16pp vs Baby Boomer Source: CGA by NIQ OPUS Fall 2023 – Sam
Slide 16: What will shopping behaviors look like in 2024?
• Three to watch, this year at the macro level: Convenience - Wellness - Sustainability • Friction Free retail on steroids for 2024 with 44% of BevAl shoppers noting that speed and efficiency most important • Sustainability and authenticity is turning a corner and supporting recruitment of new consu
Slide 17: Dynamic Demographics
Dynamic Demographics © 2023 Nielsen Consumer LLC. All Rights Reserv ed. 17
Slide 18: Dynamic Demographics
Dynamic Demographics Generation Z (21+) Graying of America Ethnic and Racial Shifts • Approaching Beverage Alcohol with • Once consumers reach retirement • America is more diverse and more caution ages, income levels drop multiracial than ever • Seeking “better for you” products significantly • Hisp
Slide 19: On Premise channel captures significant share of wallet
On Premise channel captures significant share of wallet especially among younger consumers Where consumers typically spend more on alcohol Spend 39% 36% 25% I spend more on alcohol I spend more on alcohol Not sure in stores in bars and/or restaurants 21-34 35-54 55+ 21-34 35-54 55+ 21-34 35-54 55+ 3
Slide 20: BevAl Buyers by Generation
6% 32% Generation Z Millennials BevAl Buyers by Generation % of BevAl Buying Households 27% 36% Generation X Boomers/ Traditionalists Source: NielsenIQ Omnishopper, US ALC – Integrated (21+ Only) Database; L52 WE 07/15/2023, Total Outlets, Total US © 2023 Nielsen Consumer LLC. All Rights Reserv ed.
Slide 21: 45% of Gen Z (21+) have NEVER consumed BevAl
45% of Gen Z (21+) have NEVER consumed BevAl, down from over 47% year ago Q18: How Often do you Consume Alcohol? Versus the point change to if ever, did you consume alcoholic beverages a year ago? 36% 32% 34% Never 45% -2.4pts 1x quarter 22% 22% 1-2x month 23% 20% 1x week 12% 12% 13% 12% 12% 7% 2-3x
Slide 22: Top retailers BevAl over indexes being purchased at by Generation
Top retailers BevAl over indexes being purchased at by Generation Over indexing = greater than 120 index Generation Z (21+) Millennials Generation X Boomers/Traditionalists Source: NielsenIQ Omnishopper, US ALC – Integrated (21+ Only) Database; L52 WE 07/15/2023, Total Outlets, Total US © 2023 Niels
Slide 23: Gen Z (21+) Important BevAl Purchasing Drivers
High Quality On Sale Recommended by Friend/Family Lowest Price Brand/Mfg I know Sustainable Gen Z (21+) Important Socially Responsible BevAl Purchasing Drivers Advertised *Dark Blue and BOLD represent an over-index NIQ Gen Z Study; Gen Z is legal drinking age 21+ on this slide; Q22: Which of the fol
Slide 24: Gen Z visit the On Premise weekly
54% of Gen Z use TikTok to browse Food/Drink Trends 77% (+22pp on avg consumer) 57% Would choose of Gen Z visit the brands who On Premise promote good Weekly * values/ (+10pp vs avg) 48% ethical practices (+5pp vs avg) of Gen Z post on Instagram to complete a Night Out ** (+9pp vs Avg) Source: CGA b
Slide 25: Craft beer serve preferences by age
Historically, Craft has been driven by Preferred Craft Beer Serve draft, but younger 68% consumers are Beer Drinker Age 21-34 Beer Drinker Age 35-54 Beer Drinker Age 55+ increasingly 46% indifferent 33% 26% 23% 16% 17% 18% 16% 14% 8% 1% In a can No preference In a bottle On tap/draft Source: CGA by
Slide 26: Counting on a Graying America for BevAl sales?
Counting on a “Graying America” for BevAl sales? Disposable Income fall off will impact spending 17% 21% of Americans are 65+ Today will be 65+ by 2030 “Disposable” Income By Age In thousands of dollars $120 $110 43% drop as retirement Thousands years begin $100 $80 $63 $60 $40 $20 $0 Under 25 years
Slide 27: Younger generations are more ethnically diverse
Younger generations are more ethnically diverse Race and ethnicity distribution of the population, by generation Gen Z Millennials Gen X Boomers Traditionalists White* 23 20 20 26 10 Census release Asian American* 25 27 23 19 6 shows America is Black* 30 24 20 20 5 more diverse and more multiracial
Slide 28: Hispanics are the fastest growing population in the U.S.
Hispanics are the fastest growing population in the U.S. Truly an economic force to pay attention to and understand Population has quadrupled in past 40 years 62.1M 19% of US Population 15.9M Hispanic 21+ HHs $7.8B 67% purchasing BevAl in Spent on BevAl in the L52 weeks* the L52 weeks* born in the U
Slide 29: How will changing demographics impact 2024?
• Gen Z LDA are a very important recruitment target but several challenges come with that demographic • On premise engagement with Gen Z is unique and represents significant experiential incremental dollars in 2024 • Slowing population growth is creating a graying of America and disposable income ch
Slide 30: Psychology of Premiumization
Psychology of Premiumization © 2023 Nielsen Consumer LLC. All Rights Reserv ed. 30
Slide 31: Psychology of Premiumization
Psychology of Premiumization Premium Brands Premium Experiences Macroeconomic Trends • Perception of quality and • The premium experience must be • Split brain budget association are key, as shoppers are genuine, and needs to withstand • Positive consumer outlook on willing to pay more for luxury an
Slide 32: Premiumization Factors that Matter
Premiumization Factors that Matter Total BevAl Buyer and Sales Overlap Off premise Repertoire Consumption cuts across all segments like never before Authenticity Consumers like to be able to tell the Wine & Beer & Spirits brand story to their social network 38% HH 65% $ Vol Taste Preferences Flavor
Slide 33: Confident Consumer?
Confident Consumer? The job market continues to support this metric • 19.1% of consumers said business conditions were “good,” down from 21.0% in September • 18.3% said business conditions were “bad,” up from 15.9% Consumer Confidence Index Consumers were, on balance, more pessimistic about the shor
Slide 34: The Split Brain Budget
The Split Brain Budget Affordable Luxury & Holiday Spending For finances, consumers are embracing a "split- brain budget", meaning cutting back on the basics while making room for personal luxurious items. 63% 69% 58% "I have cut out more Of consumers are "I'm not going to 'in-between' willing to bu
Slide 35: Bars & Restaurants are engrained into the social fabric
Bars & Restaurants are engrained into the social fabric of US consumers, 24% of with 1 in 3 saying consumers they would be plan to spend lost without it more in the On Premise over the next 12 months CGA by NIQ US REACH 2023 © 2023 Nielsen Consumer LLC. All Rights Reserv ed. Sample Size: 459 -1249
Slide 36: Growth expected in experiential bar sub-channel
We expect growth in experiential bar sub-channel, many of which have innovative beverage programs % visiting experiential bars in the last 3 months Age Generation 2% 8% 17% 14% Baby Boomer Gen X Millennial Gen Z Source: CGA by NIQ OPUS Fall 2023 – Sample Size: 1422 - 4608 © 2023 Nielsen Consumer LLC
Slide 37: Given a fixed $ amount, how do On Premise consumers behave?
Given a fixed $ amount, how do On Premise consumers behave? If you were choosing what to drink out, and the total of your bill was the same regardless of which option you picked, which of the following would you prefer? One luxury / super premium drink 31% Two high quality / premium drinks 39% Three
Slide 38: Beer Premiumization is driven by Imports
Beer Dollar and Volume Change vs. year ago for Beer Segments Premiumization 9.2% $ % Chg YA Case % Chg YA is driven by 4.8% Imports 3.1% (0.1)% (0.8)% (1.6)% (2.8)% (4.1)% (4.1)% (6.1)% IMPORT BELOW DOMESTIC CRAFT DOMESTIC PREMIUM SUPER PREMIUM PREMIUM Avg Price +2% +5% +3% +1% +5% Total US xAOC+ Li
Slide 39: Import remains the fastest growing Beer sub-segment
Import has remained the fastest growing Beer sub-segment with polarization also evident Total US Domestic Flavored Domestic Below Hard Craft Import Super Cider Malt Premium Premium Seltzer Premium Beverage $ Share 29.3% 29.2% 21.8% 7.5% 2.9% 2.8% 1.2% 0.8% L52 $ Share Chg vs YA -0.5pp -0.4pp +0.9pp
Slide 40: Spirits Premiumization is resilient
Spirits Premium+ Share of Spirits Premiumization Dollars Volume is resilient 69% 48% Flat vs 2021 Flat vs 2021 Premium+ shopper repertoire includes RTD now and the impact will continue Premium+ Share of Spirits – Without RTD in 2024 Dollars Volume 65% 38% Total US xAOC+ Liquor Plus + Conv during Lat
Slide 41: Whiskey remains #1 and Tequila overtook Vodka
Whiskey remains #1 and Tequila overtook Vodka in value ($) share Total US Whiskey Tequila Vodka Cordials Rum Gin Cognac Brandy $ Share 26.0% 23.0% 22.7% 12.7% 9.3% 3.7% 1.9% 0.6% L52 $ Share Chg vs YA +0.5pp +0.3pp -0.1pp +0.1pp -0.5pp +0.1pp -0.1pp -0.1pp 9L EQ Share 24.3% 21.9% 23.9% 13.9% 10.0% 3
Slide 42: Premium and above Spirits continue to gain share
Premium and above Spirits continue to gain share Super Ultra Premium Mid Value Premium L52 $ Share 6.7% 22.8% 35.2% 20.6% 14.6% L52 $ Share chg vs YA Source: CGA by NIQ On Premise Measurement – Total Spirits Mega Category, Price Tier, value, $, L52 w /e 10/07/2023 vs YA © 2023 Nielsen Consumer LLC.
Slide 43: Wine Premiumization is hitting the sweet spot
Wine Premiumization +5% is hitting the sweet spot Still Wine $18 - $20 Total Still Wine -2% Rolling 52 Weeks - Dollar Change vs. Year Ago January November 2022 2023 Total US xAOC + Liquor Plus + Conv – R52 Week Periods % Dollar Change vs YAGO © 2023 Nielsen Consumer LLC. All Rights Reserv ed.
Slide 44: Optimizing On Premise touchpoints is key
Optimizing On Premise touchpoints is key to winning in-venue influencers...and upselling 93% 27% 74% Of bartenders believe Of bartenders think brand Of guests order the drink strong and positive ambassador visits to their or brand recommended by relations with establishment will become the bartender
Slide 45: What factors will drive premiumization in 2024?
• Premium+ Spirits / Imported Beer / $20 Wine are all driving premiumization, and premium is still in the consumer repertoire • Shoppers still willing to spend today on aspirational products that are premium • Preference for quality vs. quantity in beverage alcohol consumption. Moderation in volume
Slide 46: Flavor Forward
Flavor Forward © 2023 Nielsen Consumer LLC. All Rights Reserv ed. 46
Slide 47: Flavor Forward
Flavor Forward Ready to Drinks Beer, Wine, and Spirts Cocktail Trends • Innovation continues to thrive with • Flavors are driving growth among • Exciting flavors and fresh ingredients evolving fruit, citrus, savory, and various Beer segments are driving On Premise cocktail cocktail flavor offerings
Slide 48: Ready to… products approaching $11 billion
Ready to… products approaching $11 billion with strong growth Many products in this segment are now lapping full distribution comparisons Ready to… Dollar Sales (in Billions) and % Change vs YA NIQ Off Premise Channels $10.9B $9.8 $10.2 12% +7% +4% $7.4 +32% +65% $4.5 $ share of Total Alcohol 4YA 3Y
Slide 49: Future State of Spirits-based Ready to Drinks
Future State of Spirits-based Ready to Drinks Gay Water Four Sixes Grit & Glory Tails Cocktails Dirty Shirley Flavored vodka soda brand Yellowstone TV Show influence Bacardi’s innovation in the Fresh take on a Shirley Temple with a unique positioning with vodka based cocktails Super Premium space co
Slide 50: Flavors are driving growth among various Beer segments
Flavors are driving growth among various Beer segments Brands are finding success in niche flavor segments Craft Hazy Imperial/ Chelada Double/Triple IPA +38% +110% Craft Blonde/ Hop Water Golden Ale +143% +5% Source: NIQ Discover Integrated BWS Database; off -premise channels; latest 52 w eeks endi
Slide 51: Consumer tastes have extensive repertoires with unique segments growing
Consumer tastes have extensive repertoires with unique segments growing Wine by Segment ($MM & Change vs YA) NIQ off-premise channels $ Change vs YA $15.4 B -1.9% $2.3 B +0.1% $0.6 B +20.2% $0.6 B -5.9% -9.5% +18.9% +5.3% +2.1% +21.2% Source: NIQ Discover Integrated BWS Database; off -premise channe
Slide 52: Flavor evolution in Whiskey
Flavor evolution in Whiskey +1.9% Growth of Flavored Whiskey in the Latest 52 weeks Driven by flavors like Pineapple and Caramel $453 Million +10% Dollar sales of “barrel aged” and “finishes” on Whiskey 6% of Whiskey dollars Source: NIQ Discover Integrated Database; Scan Off Premise Channels; Summer
Slide 53: Mezcal & Tequila
Mezcal & Tequila +3% +26% Increase in Mezcal dollars in Increase in Cristalino style the Latest 52 weeks Tequila dollars in the Latest 52 weeks Source: NIQ Discover Integrated Database; Scan Off Premise Channels’ Total US xAOC+Con+_Liquor; L52 w eeks ending 12/2/23 vs. year ago © 2023 Nielsen Consum
Slide 54: Other Flavor Fun and Creativity
Other Flavor Fun and Creativity Flavors continue to evolve and 2024 will see new directions tested with consumers Sweet Heat Indulgent Flavors Hispanic Influenced Mango habanero, chili lime, and spicy Rich and comforting flavors like Smoky mezcal, sweet margaritas to rise in popularity chocolate, ca
Slide 55: On Premise consumers drink cocktails out-of-home
27% of On Premise consumers drink cocktails out-of-home Q. Which of the follow ing have you had to drink w hen out at a bar, restaurant or similar outlet in the past 3 months? Please select all that apply Source: CGA by NIQ OPUS US (Fall 2023) – Sample Size: 3826 - 15000 © 2023 Nielsen Consumer LLC.
Slide 56: Top 5 cocktail flavors in Summer and Winter
BevAl suppliers have an opportunity to help operators curate targeted cocktail programs Top 5 cocktail flavors typically consumed in Summer and Winter Summer Winter Berry 65% Coffee 48% Fruity & Sweet 64% Hot 45% Wine cocktails 51% Creamy 41% Citrus 48% Cider cocktails 35% Sparkling wine cocktails 4
Slide 57: How will flavors lend to innovation trends in 2024?
• RTD revolution will continue to drive flavors growth in 2024 helping to support innovation in Beer / Wine / Spirits • Flavor creativity will proliferate in 2024 with functional beverage design being a key driver that consumers will recognize • The search for flavors can easily extend into craft be
Slide 58: Closing Thoughts
Closing Thoughts © 2023 Nielsen Consumer LLC. All Rights Reserv ed. 58
Slide 59: Four BevAl Trends for 2024
Four BevAl Trends for 2024 What’s the trend? How is the trend defined? What can we expect from this trend in 2024? • Repertoire diversification and moderation Characterized by lifestyle changes that emphasize • Friction free highly shopper planned product choices convenience, wellness, and sustainab
Slide 60: Partner with CGA for On Premise success in 2024
Partner with CGA for On Premise success in 2024 • Did you know that CGA significantly enhanced their OPM service in 2023? There are more markets, channels, states and facts now available o Our POS sample is now over 35,000 outlets – balanced between indy/chain o We collect menu data from around 150,
Slide 61: Partner with NIQ for Off Premise Success in 2024
Granularity into trends will be easier to identify with precision through the addition of Liquor coverage in the new states: Partner with NIQ for Off Premise Success in 2024 © 2023 Nielsen Consumer LLC. All Rights Reserv ed. 61
Slide 62: Capture line of sight into key geographical areas
Capture line of sight into key geographical areas State Line Coverage More granular geographical coverage into 7 unique state lines What is it? How it works? Key benefits NIQ is expanding our state line Each state line delivers 100% coverage offering to deliver the most projected coverage. Clients c
Slide 63: Interested in learning more about your alcohol category?
Interested in learning more about your alcohol category? Scan the QR code to Request More Information about your alcohol category and NIQ business solutions © 2023 Nielsen Consumer LLC. All Rights Reserv ed. 63
Slide 64: Thank you!
Thank you! © 2023 Nielsen Consumer LLC. All Rights Reserv ed. 64