For beverage alcohol, innovation takes many forms, from new-to-market creations to brand and flavour extensions – and brand owners need to retain a clear-eyed and comprehensive view of how it works in order to secure incremental growth.
As the speed of innovation in the alcohol industry continues to accelerate, it’s more vital than ever for brand owners to keep pace with nascent and growing trends – not least because innovation is the keystone to future sales performances.
Speaking during a recent episode of IWSR’s Speakeasy video series – featuring experts from across global alcohol discussing key trends and shifts in the market – the head of IWSR’s consultancy practice, Luke Tegner, argued that innovation is “strategically fundamental” to drinks companies.
Between 2015 and 2024, the global beer, spirits, and RTDs categories increased their combined sales by US$231bn. Of this growth, more than half came from innovations launched during the ten-year period. “It does differ category by category and it differs market by market, but I think it’s probably fair to say that, in a nutshell, growth relies on innovation,” said Tegner.
IWSR uses its global database to track the performance of five distinct types of innovation:
- Completely new-to-world brands
- Extensions to an existing umbrella brand
- Flavour extensions – a kind of brand extension, tracked separately because of their significance
- Cross-category – a brand extending into a new category (eg, RTDs)
- Geographic expansion – an existing brand launching into a new market
The significance of innovation varies by category. For instance, RTDs account for less than 5% of total beverage alcohol (TBA) value now, according to IWSR data, but represent about 20% of TBA incremental value from innovation.
Some categories, such as single malt whiskey/whisky, may have a large number of innovations that are a source of value for a relatively short period of time – whereas beer typically has fewer innovations, but each has the potential to become much bigger in value terms and to reach across many markets around the world.
Meanwhile, dynamic young categories – agave-based spirits being a prime example – are more likely to see a large number of new brand lines and extensions compared to a mature category like cognac, where innovations are much more scarce.
Another tool used to track innovation is Radius, IWSR’s trendspotting service that provides quarterly reports featuring news of significant alcohol NPD and trend reports.
On top of the significant trends that have been identified in the 20 years since Radius was established – including health & wellness, the evolution of premiumisation and sustainability – a number of currently influential trends have been highlighted.
Speaking during another instalment in IWSR’s Speakeasy video series, Radius founder Claudine Ben-Zenou said there was now a growing consumer appreciation for multicultural flavours and culinary traditions. “It’s coming from the fact that consumers are going to food markets and they’re really exposed to so much more flavour,” she said. “Now we’re seeing that work its way back into the product.”
Another emergent trend revolves around savoury flavours and pickles – which Ben-Zenou said had been “bubbling under the surface” at the start of 2025, but only took root during the summer with NPD around vegetables, including carrot liqueurs and tomato-based cocktails.
Meanwhile, playfulness – in terms of both packaging and flavours – has been imported from the fashion industry, with brands taking themselves less seriously and introducing “whimsical packs that create fun and shareability on social networks”.
“Sometimes, it’s difficult to be very agile about these trends and to be able to jump on them quickly, because by the time the pipeline is played out, the trend could already be over,” said Ben-Zenou. “So it’s really important to be able to respond to them.”
In this context, having the ability to identify and act on nascent trends becomes vital. Tegner pointed out that, apart from tracking the performance of innovations through data, other IWSR tools are also available, including Bevtrac consumer behaviour and attitudes research, and IWSR forecast data – all of which can be combined to build a “holistic model” of current and future market dynamics.
“What would be really interesting to ask is what are the consumer moments and occasions that are going to be big in the next 15, 18, 24 months,” said Tegner, “and using that as a guiding star… for helping to focus companies’ innovations – beyond the category view to the moment view.
“Which categories fit that moment? And how should brands be adapting themselves to fit within the growth areas?”
Ben-Zenou advised “not to be too afraid to embrace trends, because often, certainly with larger brands, it’s hard to sell in those products because we’re worried about scale”.
“Taking a risk sometimes can feel really quite scary.”
Sometimes, she added, it’s important to embrace trends before someone else does. “I often see that play out, where there’s this need to wait to see if the trend is really going to move from emerging to the mainstream,” Ben-Zenou noted.
“At that point, it’s almost too late – and, again, you’re just looking like a follower. My message would be to take a few more risks.”
