What’s Next for Brand Marketing in the Alcoholic Drinks Industry
According to the latest dentsu Global Ad Spend Forecasts, ad investment in the beverages category is expected to grow by 7.2% in 2024, easily exceeding the average growth of 4.6% expected across all sectors. Looking specifically at alcoholic drinks, brands will need to develop a full understanding of their audience, be confident in their campaigns and delivery, and avoid spreading themselves too thinly over the myriad platforms available to them.
The alcoholic beverage industry is changing
The drinks industry is in a time of rapid change, both circumstantial and structural.
The past four years have seen the double whammy of the pandemic, when venues had to close, and more recently the cost-of-living crisis, pushing prices beyond what consumers were willing to pay, particularly for premium brands and in developing markets. Added to this, there are profound shifts in consumer behavior, with a greater focus on health, and younger people drinking less alcohol than previous generations.
In response, the alcoholic drinks industry has embraced innovation, particularly around brand extensions like low- and non-alcohol versions of their products, and new lines like hard seltzer, an alcoholic sparkling water that contains fewer calories than more traditional choices like beer and wine. This brings an even greater focus on branding and marketing, as the success of these new products can depend a lot on the popularity of the brand. There is innovation in distribution, too. The industry has awakened to the potential of online commerce as a new avenue of growth, albeit with the added category-specific sensitivity of marketing online.
However, in the longer term there are concerns about deeper shifts in socializing behavior, potentially accelerated by the pandemic lockdowns, with the rise of more distant pastimes and the growing trend of isolation: 12% of Americans now claim to have no close friends[DC1] (vs. 3% in 1990) and only 13% claim to have 10+ close friends (vs. 33% in 1990). Alcohol has traditionally been consumed at times when people meet and socialize; what impact will a growing level of introversion have for the category?
New brand opportunities in the alcoholic drinks industry
2024 offers many media opportunities to the industry in physical events, new media innovations, and new ways to connect with audiences. Some of these 2024 brand marketing opportunities in the drinks industry include:
Sports partnerships
Two football/soccer tournaments, Euro 24 and 2024 Copa América, will bring opportunities for advertisers to associate themselves with the action, either as sponsors, or to try to reach large audiences however they watch and follow the excitement. Brands are also getting more involved in the world of online gaming, either with in-game ads, partnerships with prominent personalities within the sport, and even the esports tournaments, recognizing their power to reach large, engaged adult audiences.
Online collaborations
Additionally, brands are increasingly engaging independent content creators and online influencers to reach audiences in an authentic and responsible way, through content partnerships on social channels, and even in podcasts. The International Alliance for Responsible Drinking, a not-for-profit organization dedicated to reducing harmful drinking and promoting responsible drinking (of which dentsu is an active member) can help advertisers to ensure that this sort of promotion is done correctly.
Retail marketing
Finally, retail media, where brands advertise in retail environments like supermarket sites and delivery apps, is taking off within the industry as an efficient way to reach audiences near to the point of sale.
However, alongside these new opportunities and innovations come challenges for marketers within the industry. There are myriad legal frameworks around the world that brands need to navigate to ensure their advertising and promotions are compliant and effective while still ensuring a commitment to responsible drinking. There are also challenges from smaller independents who have been very innovative in building their brands without investing heavily in traditional paid advertising, but instead trading on celebrity, events, and stunts.
A plan for growth in 2024
In such a fast-moving category, marketers need to keep up with the evolutions in consumer behavior to keep abreast of shifts in society. As digital media continues to grow in its dominance – it is expected to reach 58.8% share in 2024 – advertisers need to find the channels that work for their brands, and some principles can help them make the most of their investment:
- Bigger – having confidence in their choices and go all in on their ideas, using all the tools available to put their message across and bring campaigns to life.
- Better – developing the best understanding of the audience to resonate with the culture and speak to them in an authentic way, and
- Fewer – avoiding fragmentation into too many campaign ideas and media channels; finding a way to innovate, but not to the point of trying too many new ideas and chasing every next big thing.
2024 looks certain to be a year of opportunity for media, with big advertising moments to take advantage of. Download the latest dentsu Global Ad Spend Forecasts to better understand and navigate the changing media landscape.