US e-commerce operator Drizly today released its third annual study of how Americans shop for and consume adult beverages. Coming at an inflection point as a new normal emerges, the findings point to blurred lines between two hot categories – hard seltzer and ready-to-drink cocktails – and how Gen Z’s penchant for conscious consumption may shape the industry for years to come. The study also found that e-commerce, which experienced rapid growth during the pandemic, has become a mainstream way to purchase alcohol in adult shoppers’ minds.
The findings came from a nationwide survey of 1,000 Americans of legal drinking age, independent from Drizly’s customer base, conducted in June 2021. Among the study’s highlights:
Is hard seltzer’s bubble about to burst?
While the breakout drink of 2019 and 2020 is still growing, it’s not what 21-plussers say they will reach for first this summer. Ready-to-drink cocktails and other new canned drinks are playing off of hard seltzer’s innovation, and in the process, taking some of its some growth momentum. Year to date, RTDs share is growing at 15 times the rate as hard seltzer on Drizly.
And quite surprisingly, consumers know little about what makes hard seltzer and what differentiates it from its newer competitors, likely blurring the lines with red-hot, ready-to-drink cocktails (RTDs). Surprisingly, less than a third of adults surveyed could accurately describe what hard seltzer is. The correct definition – carbonated water with alcohol made from malt or sugar – was known to only 32% of respondents. When asked what they’d reach for first this summer, respondents gave RTDs (30%) the slight edge over hard seltzer (29%), speaking to likely confusion between the two segments, especially when considering that hard seltzers have outsold RTDs by two-to-one on Drizly so far this year.
Gen Z most concerned with how its made
Gen Z leads in conscious consumption. How it’s made and by whom matters most for Gen Z consumers, who over-indexed on both factors compared to other generations in purchase decision-making. Nearly one-third of 21 to 24-year-olds surveyed cited minority ownership (BIPOC, women, AAPI, LGBTQ+, etc.) as an important brand choice consideration, followed by millennials at 18%, Gen X at 14% and baby boomers at 11%. Sustainable business practices are also a driving force for Gen Z, with 40% saying that they factor environmental track record into alcohol brand selection, followed by Gen X (33%), millennials (32%) and baby boomers (20%).
Home cocktails are here to stay
Some pandemic-made habits at home are poised to stick around. As the phase dubbed ‘normal-ish’ sets in, survey findings point to activities like cooking (80%) and streaming (74%) poised to be enjoyed with a drink with the same or greater frequency as during the pandemic. While cocktail-making ranked last in terms of post-pandemic stickiness, it remains strong, with over half (68%) of respondents expecting to continue home mixology with similar or greater frequency.
Mixed opinions on returning to the on-premise
A majority of consumers are ready to get back to normal but for some, pandemic impacts are lasting. A year and half after the pandemic shuttered on-premise venues, only 6% of respondents reported that they did not plan to return to a bar or restaurant. However, while 26% of respondents said they plan to drink on-premise more frequently than pre-pandemic, just about as many (25%) plan to do so less frequently.
Historically, the split between on-premise and off-premise alcohol sales is 20% and 80%, respectively. Drizly’s 2021 consumer survey shows signs of moving back towards this ‘normal’ split after nearly a year and a half of the pandemic’s impact causing a significant decline in on-premise consumption: 16% of respondents plan to drink most regularly bars and restaurants this summer and fall; 69% plan to sip at their own and friend’s or family’s homes; and 14% expect to drink most regularly at outdoor locations like parks and beaches.
What drinking behaviors did you partake in most during the pandemic?
Call it Netfilx and Chill(ed Beverages) – at least when it came to drinking during the pandemic: 67% of respondents said that they enjoyed adult beverages while watching TV shows, movies and the like at home. Enjoying a couple of drinks on a weeknight (49%) and drinking while cooking (46%) placed second and third. When it came to at-home cocktail-making, pursued by 24% of all respondents, younger mixologists drove the trend. Millennials (31%) and Gen Z (29%) found themselves shaking and stirring more than Gen X (17%) and baby boomers (14%).
E-commerce to continue to grow
While the pandemic fueled alcohol e-commerce, it is poised for long-term growth. The majority of respondents (53%) anticipate more of their alcohol purchases will be made online in the next year compared to during the pandemic, suggesting a fundamental shift in how Americans will shop for alcohol. Another 33% expect to order online about the same as during the pandemic, while only 14% plan to order less.
Drizly asked where they had purchased alcohol online/for delivery in the past year? Online marketplaces, including those focused especially on alcohol, as well as those that sell alcohol in addition to other categories like food and grocery, led responses with 72% of consumers who have purchased alcohol online in the past year. 39% of respondents have bought drinks online or for delivery directly from retail stores. Direct-to-
consumer offerings including online-only retailers, subscription services, and producers were reported by 69% of survey takers.
Healthiness matters
When asked which factors are important when considering an alcohol brand to purchase, 39% of respondents said that perceived ‘healthiness’ mattered to them, good for the first place spot among major consideration factors when taking traditional drivers like price and availability out of the equation. When asked which health factor is the most important in the purchase decision, transparency of ingredients and calories count rose to the top, each selected by 20% of respondents. Family ownership, size and local-ness matters too, 34% of survey takers ranked these factors second.
“Our study revealed that the pandemic has changed how we consume and purchase alcohol in some fundamental ways, along with interesting dynamics among hard seltzers and ready-to-drink cocktails, two segments that are reshaping the industry,” said Cory Rellas, CEO of Drizly. “We also find Gen Z adults’ penchant for considering ownership and sustainability in alcohol brand choices worth watching.”
