Ready to Drink Beverages and Other Trends in Spirits
Following our article on consumer trends in wine, we want to now look at the spirits category broadly, to get a sense of the trends we’ve seen previously on the Instacart marketplace during the holidays.
One of the standout spirit trends within recent years has been Ready to Drink (RTD) beverages. Earlier this year, Forbes wrote that RTDs “are the fastest-growing alcohol beverage category in the U.S. market.” Our own data backs this up, with the percentage of alcohol consumers purchasing RTDs growing from 11% in Q4 of 2019 up to 24% in Q3 of 2021 — an increase of more than 2x the percentage of consumers buying RTDs.
With the increased demand for RTDs, more well-established and premium brands have entered the space. The RTDs from premium brands reflect a demand for pre-mixed cocktails that use real ingredients like fresh fruit and natural flavors and quality base spirits; a demand engendered, in part, by pandemic lockdowns. As more consumers shifted to at-home entertaining a thirst grew for RTDs more in line with the cocktails mixed at their favorite watering hole.
This shift in RTDs follows a growing trend of premiumization within the overall spirits category. That consumers, especially during the holidays, are moving towards more premium brands and paying higher prices for their spirits. In a separate Forbes article, Sean Eckhardt, senior vice-president and managing director of sales, Bacardi North America, was quoted saying they “have seen this mindset trend strongly among our existing and new consumers for our global family of premium spirits brands.”
During the holiday season, tequilas show the greatest premiumization, with the average unit price up 5% QoQ on Instacart, while it was whiskeys with prices greater than $43 that drove unit growth in Q4. Again, supporting the idea that consumers order more premium or higher priced spirits on the Instacart marketplace during the holidays.
What else do we see on the Instacart marketplace within the spirits category?
Top growing holiday spirits
Cordials (or liqueurs), sweetened or flavored liquors like Amaretto, Baileys, Drambuie, Sambuca, Triple Sec, Limoncello, among many others saw growth of 55% last year, followed by whiskeys growing by 43%, and then rum by 23%.
Interestingly, while these types of spirits grew the most during the holidays, it was unflavored vodka which was the most likely to be added to the basket first of all the spirits during the holidays last year.
Also of note were the search terms consumers were using during the holidays to find spirits. We looked at the top growing search terms during the week of 12/21 compared to the average of the prior four weeks. Searches for ‘rum’ and ‘whiskey’ grew by over 16%, with ‘alcohol’ being the only other term to grow by double-digits, with an increase of just over 10%.
Generic terms like ‘cordial’ and ‘liqueur’ as well as specific types like ‘Amaretto’ and ‘Kahlua’ were not among the top growing search terms, despite that category of spirits growing the most of the spirits during the holidays. That’s likely due to the myriad of ways consumers search for cordials — compared to common searches like ‘rum’ and ‘whiskey’ consumers buying cordials tend to search for specific liqueurs or brands.
We know the path to cart for alcohol skews more to discovery mechanisms like search and browse (versus Buy it Again and Did You Forget) during the holidays. However, Search disproportionately sources sales in the cordials aisle, growing from less than 60% prior to the holidays, to 73% of total conversions the week of Christmas, where all spirits combined grew from 48% to 59%.
However consumers were finding cordials, the trend to purchase more cordials during the holiday is clear. Graphing weekly sales of cordials, we can see the obvious trend — all types of cordials see a couple of spikes of varying sizes in Q4, starting the week of October 19th, when compared to sales levels the week after Labor Day.
More insights on any category
Instacart has one of the most diverse grocery data sets in North America, pulling anonymized and aggregated insights from millions of orders over time from hundreds of different retailers. The above represents some of the findings prepared for a category review of spirits during the holiday season, but there’s plenty more information to be gained from careful analysis.
If you’re interested in learning more about how consumers shop online in categories relevant to your business, consider partnering with us.
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