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Alcohol Consumption at Home - US - August 2008

SCOPE AND THEMES
What you need to know
Definition
Data sources
Consumer survey data
Market size and segmentation data
Abbreviations and terms
Abbreviations
Terms
EXECUTIVE SUMMARY
Still growing—wine still gaining share
Segmentation of drinkers
Channel trends
Market background
Decision-making drivers
Occasion-based drivers
Key demographics
Premium and super-premium lead Innovation
INSIGHTS AND OPPORTUNITIES
Trend toward partying at home could change the way people drink
Teach consumers how to pair alcohol with cuisines to create great parties
Help consumers create healthy and inspiring drinking experiences
Exclusivity, sustainability and ancillary value drive packaging innovation
Drinking games for creatives?
FAST FORWARD TRENDS
Brand Tribe
Customers are shaping the brands of the future
The story of George Dickel Tennessee Whiskey Distillery
Brand U.S.A.
As America becomes more diverse, so does Brand USA
Foreign investment fuels the growth of American brands at home and abroad
MARKET SIZE AND SPENDING PATTERNS
Key points
Slowdown in growth rate expected in 2008
Figure 1: U.S. retail sales of alcoholic beverages (packaged liquor, wine and beer), in current prices, 2003-13
Figure 2: U.S. total U.S. retail sales of alcoholic beverages (packaged liquor, wine and beer), in inflation-adjusted prices, 2003-13
Innovative taste profiles, premium products and cocktail culture drive growth of distilled spirits
Figure 3: Total U.S. retail sales of distilled spirits (liquor, brandy and liqueurs), at current prices, 2003-13
Figure 4: Total U.S. retail sales of distilled spirits (liquor, brandy and liqueurs), at inflation adjusted prices, 2003-13
Sales of wine slow, consumers turn attention to beer
Figure 5: Total U.S. retail sales of wine, in current prices, 2003-13
Figure 6: Total U.S. retail sales of wine, at inflation adjusted prices, 2003-13
Beer sales benefit from innovation, locality and alignment with “gourmet”
Figure 7: Total U.S. retail sales of beer and ale, in current prices, 2003-13
Figure 8: Total U.S. retail sales of beer and ale, at inflation adjusted prices, 2003-13
Household alcohol consumption: high incidence of beer purchase drives sales increases
Figure 9: Incidence of household alcohol purchases, by major category, 2007
SEGMENTATION
Key points
The affluent drive demand for premium and super-premium alcoholic beverages
Figure 10: Number of alcoholic beverages consumed per month, by household income, June 2008
21-44s over-index on alcohol consumption
Figure 11: Number of alcoholic beverages consumed, by age, June 2008
Alcohol consumption fairly constant
Figure 12: Anticipated use of liquor; drinking more or less than last year, by age, June 2008
Liquor beverages are used by 50% or more of drinking age adults who consume alcohol at home
Figure 13: Frequency of vodka use, by household income, June 2008
Figure 14: Frequency of rum use, by household income, June 2008
Figure 15: Frequency of tequila use, by race/ethnicity, June 2008
Figure 16: Frequency of prepared cocktail use, by household income, June 2008
Figure 17: Frequency of cordial (e.g., brandy and Cognac) use, by household income, June 2008
Figure 18: Frequency of gin use, by household income, June 2008
Wine consumption remains steady
Figure 19: Anticipated use of wine; drinking more or less than last year, by age, June 2008
Figure 20: Frequency of wine use, by household income, June 2008
Figure 21: Frequency of wine cooler use, by household income, June 2008
Zinfandel and Merlot are most popular among wine users
Figure 22: Types of wine consumed, 2007
About a third of 21-34s anticipate drinking more beer this year
Figure 23: Anticipated use of beer; drinking more or less than last year, by age, June 2008
Figure 24: Frequency of beer use, by household income, June 2008
Figure 25: Types of beers consumed, 2007
CHANNEL ANALYSIS
Key points
States regulate liquor sales
Liquor stores and grocery stores are the most frequently used channels
Figure 26: Where people buy alcoholic beverages, by household income, June 2008
Specialty stores and supermarkets capture the majority of liquor sales growth
Figure 27: Total retail sales of distilled spirits (liquor, brandy, liqueurs) in current prices, by channel, 2002-07
Figure 28: Total retail sales of wine in current prices, by channel, 2002-07
Figure 29: Total retail sales of beer and ale in current prices, by channel, 2002-07
MARKET DRIVERS
Key points
Demographic shifts drive demand for “superfruit” flavors and imports
Figure 30: Population, by race and Hispanic origin, 2002-12
Recessionary pressures drive increased price-sensitivity
Figure 31: Change in gas prices, all types and regular, 2000-08
Concern about obesity translates to calorie counting
Figure 32: Percentage of population who are overweight or obese—20-74 year olds, 1988-2004
Health and wellness concerns are driving dietary changes
Figure 33: Trended attitudes about diet, 2001-07
DECISION-MAKING DRIVERS
Key points
Brand experience, price and convenience are primary decision-making criteria
Figure 34: Factors that influence purchasing decisions, by household income, June 2008
Figure 35: Factors that influence purchasing decisions, by household income, June 2008
Figure 36: Factors that influence purchasing decisions, by household income, June 2008
Why people are drinking more or less—in their own words
Increases driven partly by appeal of food pairings
Drinking more with friends at home
Some motivated to drink more by belief that small amounts can promote good health
Motivated to drink at home by cost savings and the comforts of home
More free time drives increased use
Stress reduction another commonly cited motivator
Concerns about weight management and general health can drive down consumption
Cost is another driver of decreased usage
General concerns about drinking too much drive down consumption
OCCASION-BASED DRIVERS
Key points
Personal milestones, New Year’s Eve, summer holidays and Christmas are important drivers
Figure 37: Events that motivate the purchase of alcohol, by age, June 2008
Figure 38: Situational motivators of at-home drinking, by age, June 2008
ATTITUDES TOWARDS DRINKING, ITS EFFECTS AND DRINK MARKETING
Key points
Willingness to experiment begins to decline by the mid-forties
Figure 39: Attitudes towards expermenting with new alcoholic drinks, by age, June 2008
25-34s are somewhat more concerned about side effects and many are interested in functional beverages
Figure 40: Health-related drinking attitudes, by age, June 2008
Figure 41: Alcohol knowledge and interest in learning, by age, June 2008
Hispanics drink more and, like blacks, tend to be somewhat more responsive to marketing efforts
Figure 42: Attitudes towards branding, packaging and pricing, by race/Hispanic origin, June 2008
INNOVATION AND INNOVATORS
Key points
Premium flavored liquors meet demand for high-quality “superfruit” varieties
Premium spirits meet demand for higher-quality, purer varieties of liquor
Inexpensive table wines that pair well with healthy American and Italian cuisines are among the most practical recent innovations
Organic varieties respond to growing demand for all things eco-friendly
Some manufacturers are responding to the shift in demand for more ethnic products
ADVERTISING AND PROMOTION
Heineken ad suggests broad appeal
Figure 43: Heineken Christmas, 2007
Bud Light ads align the brand with masculine camaraderie
Figure 44: Bud Light - “Dude, that’s some serious cheese,” 2007
Figure 45: Bud Light - “Roommates,” 2007
Smirnoff plays on the backyard party theme
Figure 46: Smirnoff Ice Light, 2007
CLUSTER ANALYSIS—DRINKING ENTHUSIASTS, EVENT DRINKER, INFREQUENT DRINKER
Key points
Drinking enthusiasts are the heaviest users but event drinkers are more heavily influenced by situational factors
Figure 47: Number of alcoholic drinks consumed at home or outside the home in an average month, by clusters, June 2008
Figure 48: Motivating occasions and/or events to purchase alcoholic beverages, by clusters, June 2008
Enthusiasts are significantly more likely to report drinking more this year than last year
Figure 49: Anticipated use of beer, wine, liquor; drinking more or less than last year, by clusters, June 2008
Methodology
CUSTOM CONSUMER GROUPS
Affluent males, those with children and affluent blacks tend to drink the most
Figure 50: Number of alcoholic beverages consumed, men with children, blacks and males with HH income over $75K, June 2008
Figure 51: Anticipated use of liquor; drinking more or less than last year, Hispanics and blacks aged 21-34, Hispanics with HH income over $75K, June 2008
Figure 52: Anticipated use of beer; drinking more or less than last year, Men and Hispanics aged 21-34, Hispanics with HH income over $75K, June 2008
Figure 53: Anticipated use of wine; drinking more or less than last year, Men and Hispanics aged 21-34, Hispanics with HH income over $75K, June 2008
APPENDIX A: OTHER USEFUL CONSUMER TABLES
Figure 54: Frequency of malt beverage use, by household income, June 2008
Figure 55: Frequency of Scotch use, by household income, June 2008
Figure 56: Frequency of Irish Whiskey use, by household income, June 2008
Figure 57: Frequency of Canadian Bourbon use, by household income, June 2008
Figure 58: Frequency of aperitif use, by household income, June 2008
Figure 59: Drinking behavior, by age, June 2008
Cluster analysis demographics and characteristics
Cluster characteristics
Figure 60: Attitudes towarfds branding, packaging and health aspects, by clusters, June 2008
Figure 61: Source of alcoholic beverages, by clusters, June 2008
Figure 62: Beliefs and habits, by clusters, June 2008
Cluster demographics
Figure 63: Alcohol at home clusters, by gender, June 2008
Figure 64: Alcohol at home clusters, by age, June 2008
Figure 65: Alcohol at home clusters, by household income, June 2008
Figure 66: Alcohol at home clusters, by race, June 2008
Figure 67: Alcohol at home clusters, by Hispanic origin, June 2008
More custom consumer groups
Figure 68: Custom consumer groups who over-index on beer, June 2008
Figure 69: Custom consumer groups who over-index on wine, June 2008
Figure 70: Custom consumer groups who over-index on liquor, June 2008
Figure 71: Custom consumer groups who over-index on cordials, June 2008
Figure 72: Custom consumer groups who over-index on gin, June 2008
Figure 73: Custom consumer groups who over-index on prepared cocktails, June 2008
Figure 74: Custom consumer groups who over-index on rum, June 2008
Figure 75: Custom consumer groups who over-index on tequila, June 2008
Figure 76: Custom consumer groups who over-index on vodka, June 2008
Figure 77: Custom consumer groups who over-index on wine coolers, June 2008
APPENDIX B: TRADE ASSOCIATIONS

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