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What trends can the beer, spirits and wine sectors expect to shape the year ahead? Here, Euromonitor's senior alcoholic drinks analyst, Spiros Malandrakis, previews what 2018 has in store.

Drinking goes Mindful

From moderation initiatives to breaking the taboo of teetotalism, the trend to drink less alcohol will gather further momentum, reach critical mass and enter the realms of a paradigm shift. Proving to be secular rather than cyclical, it will incorporate an ever-widening spectrum of lower alcohol and adult soft drinks finding relevance - in equal non-intoxicating measures - in mature markets and categories, from South Korean spirits to Western European beer and beyond. 

Smaller pack sizes and serving options, production advances allowing for more sophisticated and balanced products than first generation de-alcoholised offerings, and synthetic prototypes focusing on compounds minimising alcohol toxicity while claiming functional benefits, will all radically disrupt established positioning, occasions and legislative developments.

The rise of cannabis as a healthier substitution alternative will only accelerate the shift. 

Do alcoholic drinks dream of electronic bartenders?

From integrated, voice-enabled devices allowing for seamless recommendations, shopping and educational initiatives, to augmented reality labels and Near Field Communication technology transforming products into content hubs and digital touchpoints, the dawn of a brave new world is upon us.

As the historic fetishisation of nostalgia-tinged offerings reaches saturation territory, while losing relevance to the ever-more important Millennial demographic, alcoholic drinks will go back to the future. Spectrometry sensors, voice-activated decanters, smart bottles and the rise of the internet of drinks will lead to further exploration of multi-sensory experiences, customisation functionality and new occasions.

E-tailing coming of age

Historically suffering from complacency and traditionalism-induced inertia and the labyrinthine tiered distribution barriers still gripping markets like the US, e-tailing is shifting fast from experimental adolescence to tried-and-tested maturity.

While online sales will - at least initially - favour macro offerings, online private-label and brand-exclusives will become the next disruptor, forcing manufacturers to either establish their own virtual presence or collaborate with a third-party, online titan.

Alongside maturity comes sophistication. Luxury online presence, pavilions and delivery services will add value and aspirational cues to a format historically associated with convenience, while developing markets will witness new levels of accessibility on the back of revamped and tailored e-tailing models.

Cross-pollination, hybrids and blurring category lines

From combining lager and ale yeast strains to radical barrel-ageing amalgamations, and from cascade hops in gin to fusion whiskeys incorporating Indian, Scotch and international blends, innovation will mirror the promiscuous nature of that all-elusive yet core Millennial demographic.

Both cross-category and intra-category hybrids will gain further traction, providing a halo effect and maintaining consumer engagement. Some of the most intoxicating opportunities may well lie between categories instead of inside them.

Marketing evolves, corporate responsibility takes centre stage

It's last orders for shots of monolithic, aspirational materialism, as consumers turn to sipping and savouring brands' ethical credentials.

The end of gender-based marketing and a transition towards non-binary and gender-neutral positioning - a far cry from the machismo-driven campaigns of the past - reaching out to politically-engaged core audiences that make belief–driven decisions on issues ranging from LGBT rights to the environment, hyper-local advertising campaigns tailored for specific neighbourhoods and demographics, and supporting local communities will all drastically disrupt established positioning and promotional rules.

Glass half full?

While premiumisation, aspirational consumption and increasingly more-sophisticated palates allow for a relatively buoyant and optimistic short- to medium-term outlook, downside risks remain. Complacency, along with the faith in the infinite and linear growth mantras, has proven to be disastrous in the past while the severe volatility hitting markets from China to Russia to Nigeria, provides fitting cautionary tales. A potential deceleration of premium dynamics could hence hit developing markets facing black swan events as much as it could derail the growth curve in mature markets facing yet another cyclical downturn.

Diversification in category, geographical and positioning terms will provide the essential safety valve for an industry under increasing pressure.

Is the grass greener? Cannabis and the substitution conundrum

As legalisation initiatives gather further traction and alcohol manufacturers hesitantly embrace the rising green tide through ambitious R&D and still embryonic M&A activity, cannabis will increasingly monopolise the spotlight in 2018.

From pot to plate events to cannabis infusions, and from weed-pairing wine clubs to Budtenders, buzzy strains, appellations and artisanal offerings entering the industry's lexicon, cannabis will enter the mainstream in alcohol's semantic mantle.

Female, higher-income and Hispanic consumers in the pioneering US market already appear to showcase lower rates of cannabis incidence and will be the alcohol industry's chosen focus and de facto last line of defence. In the medium to long term, though, symbiotic offerings will be the only viable solution.

Alcohol-free products, drawing parallels to terpenes and non-psychoactive cannabis flavour sophistication will spearhead innovation on that front, led by enthusiastic micro producers who are willing to take the inevitable risks and pave the way for bolder hybrid products.

Click here for more information about Euromonitor International's alcoholic drinks research.

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