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The death of craft statements, opportunities in e-sports and mainstream moderation - Ten takeaways from the Global Drinks Forum - Part 1

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The Global Drinks Forum in Berlin this October hosted 11 presentations from all corners of the drinks industry. Talks at the day-long international conference ranged from Diageo on the future of drinking to the meaning of authenticity from design firm Stranger & Stranger. Here, just-drinks deputy editor Lucy Britner rounds up the key forecast trends from the presentations.

e-sports is attracting the ideal age demographic for drinks companies

e-sports is attracting the ideal age demographic for drinks companies

  • Moderation moves mainstream

While moderation might once have been a niche within the alcohol sector, Diageo's global future & culture planning director, Zoe Lazarus, believes it is now becoming part of the mainstream. The growing movement for moderation will lead to a shift in drinking culture over the next five to ten years, Lazarus says. "We will see the increasing development of healthier serves and more options for regulating alcohol consumption."

If you go to markets like Belgium, half the market seems to take the month off from drinking

IWSR senior analyst Tim Simmons highlights 'Dry January' as an example of a movement that he says is fast becoming the cultural norm. "If you go to markets like Belgium," he adds, "essentially half the market seems to take the month off from drinking. It's quite phenomenal."

Almost all the speakers at the forum mention the growing presence of low- and no-alcohol drinks in a drinkers' repertoire. Dan Gasper, COO of Diageo's incubator arm Distill Ventures, calls the emergence of the non-alcoholic drinks category "the biggest opportunity in the drinks industry". You can read more about Distill Ventures' latest report into non-alcoholic drinks here.

The desire to moderate seems more prevalent among younger consumers. While Millennials are believed to avoid excessive drinking for fear of shame on social media, Generation Z consumers have other concerns. Will Rowe, CEO of marketing consultancy Protein, who was at the event presenting his Youth Report, adds 'mindfulness' to the mix. He talks about the rise in popularity of apps such as 'Club Soda', which badges itself as an aid to "drink less alcohol", with a tracker, diary and tips to avoid over-consumption. 

Protein's report reveals that 28% of Gen Z consumers have started drinking less - and 26% have never drunk. "When getting drunk with friends," Rowe reveals, "their primary concern was being unproductive the next day."

  • Optimise not compromise

The rise of moderation and holistic wellbeing means consumers are increasingly striving to achieve balance, seeking to make the most of experiences. "With more information and tools than ever to understand what we consume and how it affects us, we will increasingly be seeking to optimise our social lives without compromising on excitement and experience," believes Diageo's Lazarus.

This trend is being fuelled by  - and is also fuelling - several innovations within the drinks industry. Lazarus points to nutritional labels on Johnnie Walker bottles, bars such as Yolo in China that offer sophisticated non-alcoholic drinks menus and the launch of dairy- and gluten-free Bailey Almande "with the same calorie count as a vodka and soda".

  • Generation Z shuns endorsements

With a generation that does not know a world without the internet, the virtual world is "as normal to them as the real world," says Lazarus. Moreover, Generation Z has grown up with social media. According to Protein's Rowe, these consumers are accustomed to SM platforms also being used as business tools. On the one hand, this has led to an increase in young people seeking careers in social media - Rowe gives the example of SocialStar Creator Camp, an LA-based camp that trains "rising social media creators". On the other hand, the notion of social media as a business means celebrity endorsements no longer pack a punch.

"When a celebrity or influencer endorses a brand or product on social media," Rowe says, "62% of the youth think the individual doesn't care about the product - they just want to get paid.  According to his research, Generation Z consumers see today's influencer landscape as being characterised by "monotonous and inauthentic 'paid-to-post' mechanisms"

This sentiment has led to the development of non-human fictional characters and stories "that often feel more human and impactful than the real deal". Rowe uses the example of The Coca-Cola Co's recent signing of a virtual reality athlete in a new campaign.

"An ever-growing scepticism around 'ambassadors' means consumers are engaging with purely fictional characters that are, ironically, deemed more authentic," the report says. "They're connecting with personalities that are disconnected from the polarising realities of age, sexuality, race and gender."

  • Virtual becoming reality

While virtual characters endorse brands, the world of virtual reality is also changing the way people socialise and may even change the way they drink and visit bars.

"The rise of digitally-enabled virtual socialising, although in early stages of development, will create fresh opportunities for the drinks industry to explore the possibilities of the digital world and beyond," says Diageo's Lazarus. She cites Statista research, which suggests that by 2020, the VR software and hardware market will be worth GBP19.5bn (US$25.6bn).

In September this year, Bacardi's Global Travel Retail unit rolled out a virtual reality cocktail programme for Virgin Atlantic's Clubhouse customers. The 'Immersive Digital 360 Drinks Experience' allows consumers to virtually visit some of the world's best bars, while drinking signature drinks from their menus. Consumers wear a VR headset to see the cocktail being made in a partner bar, before being served the drink at Virgin's Clubhouses.

Lazarus believes the reality of virtual socialising is now emerging and will become much more accessible over the next three to five years. She gives the example of chat bots that can relay brand information and cocktail recipes via platforms such as Amazon Echo.

How long will it be until we are all buying virtual drinks for each other, in virtual bars? Sooner than we think

"Today's consumers are becoming more comfortable encountering the virtual world and virtual people so it's only natural that they will move into virtual socialising," she says. "How long will it be until we are all buying virtual drinks for each other, in virtual bars? Sooner than we think."

  • The e-sports opportunity

Looking more closely at virtual socialising, Lazarus says: "Perhaps one of the most interesting new dimensions of global youth culture in the last five years is e-sports - the playing or watching of online gaming."

Soft drinks firms are beginning to capitalise on the opportunities associated with e-sports. Earlier this month, coconut water brand Coco Fuzion 100 became official hydration partner of the Astralis e-sports team in Counter Strike: Global Offensive. The move comes soon after PepsiCo took its AMP Energy brand into e-sports and gaming for the first time through a link-up with live streaming platform Twitch last year.

According to e-sports market intelligence firm Newzoo's 2017 e-sports report, the global e-sports audience will reach 385m in 2017, with brands contributing US$157m to the category in the same period. By 2020, estimates Newzoo, brand investment in this field will double.

"E-sports is a massive trend and one to keep an eye on," Lazarus adds. Around 70% of e-sports participants are over the legal drinking age, she notes, while the average age is around 32. "It's a target audience we shouldn't be ignoring."

  • Craft out, authenticity in

Design firm Stranger & Stranger's group MD, Ivan Bell, and brand strategist Greg Dillon believe the end is nigh for craft statements. They say phrases such as 'small lot' or 'hand-crafted' have been devalued. Instead, authenticity is key.

"Authenticity is about having a story that holds true under scrutiny," the pair say. "It's about knowing something in there really needs to be true about your brand because the consumer is very savvy these days."

Dillon tells just-drinks that authenticity is becoming more important to consumers as they look to buy into brands that are a "reflection of themselves and that hold the same values as themselves".

He also believes consumers no longer trade up in a linear fashion from entry level to ultra premium. "They trade in where is most appropriate to them and then move up, down or sidewards in a range depending on their mood and specific occasion/context."

In the second part of this look at future drinks trends, which can be found here, just-drinks explores apps, cannabis and the democratisation of food culture.


Expert Analysis

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