The Wine & Spirit Trends Appealing to Today's Sophisticated Drinker

Today's consumer isn't only more educated when it comes to food sourcing, they are also more knowledgeable when it comes to wine and spirits. They are looking for unique liquors, spirits, and flavors that can't be found on every bar menu.

This demand for more elevated spirits has fueled the handcrafted cocktail trend. With that in mind, beverage menus are only getting more sophisticated.

On the IOChangeMakers live stream, we sat down with two beverage experts–Cassie Sakai, wine director and lead sommelier for Girl and the Goat and Alan Beasey, beverage director at The Purple Pig to see what types of beverages guests have been ordering the most.

"Right now agave spirits are all the rage and not just tequila. Mezcal had a little surge there, people were really into mezcal. But now we are also starting to see things like raicilla and sotol coming into the picture," says Beasey.

Gin, vodka, whiskey, and tequila will always remain favorites, but today's guests are adventurous and are looking for something new or even something popular from the past.

"Amaro had its moment and now people are like 'what are we going to do next?.' It's about sourcing things that are limited production. I have been seeing really cool old fashions with vintage ingredients," says Sakai.

Watch the clip above to get more insights on the latest spirit trends. Want the full video? It's available exclusively now for On-Demand members. Learn more about Foodable On-Demand now.

Why Millennials are Drinking Less and It's Not Only Because of Dry January

In 2018, it was revealed in multiple studies that millennials are drinking less wine than the baby boomer generation, meaning that wine sales are expected to decrease come 2019.

With the Dry January Movement becoming popular, where participants abstain from drinking alcohol for the 31 days of the month, millions of millennials aren't drinking libations at all.

But it appears as though millennials drinking in moderation is also part of a much larger trend and restaurants and bars are going to have to get more creative with beverage options this year.

"There are signs that a more sweeping and permanent moderation movement is taking root among millennials. The generational shift is forcing bars, restaurants and alcohol brands to adapt," writes "Ad Age." "More low- and no-alcohol products are in development, and some, like Heineken's new no-alcohol 0.0 beer, are already hitting store shelves. Drinking establishments, meanwhile, are adding fancier non-alcoholic cocktails, or mocktails, to their menus as they look to keep their drink revenues flowing."

But it isn't just millennials drinking less. New of-age drinkers aren't drinking nearly as much as the generations before.

"Entry-level drinkers are drinking less," says Benj Steinman, "Beer Marketer's" publisher "It's a real 'watch-out' for the future."

This is partly because younger generations are living a healthier lifestyle and are more educated on nutrition.

"Older generations were ignorant, young drinkers today are not," says Kit Yarrow, a consumer psychologist to "Ad Age." "This more educated and informed generation knows the perils of drinking and driving; the health issues associated with alcohol; and the calories associated with drinking."

Read more about how younger generations are drinking less at “Ad Age.”

While consumers may be gravitating away from alcohol, they are instead interested in natural remedies like cannabis.

We are already seeing several beverage giants jump on the cannabis bandwagon. CBD, the cannabis compound that is legal in all of the U.S., is now being served at restaurants and bars in most major cities.

With that in mind, artisan CBD infusions in particular have become popular. Listen to this recent episode of The Barron Report below where Host Paul Barron discusses the CBD trend with the executives of Azuca, a company that is thriving with its chef-quality CBD infusions.

Direct-to-Consumer Wine Sales See a Spike

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Although we recently reported that millennials are drinking less wine than the baby boomer generation, direct-to-consumer (DtC) wine sales have increased by 12 percent in 2018.

According to the 2019 Direct to Consumer Wine Shipping Report by Sovos and Wines Vines Analytics, consumers are also willing to buy more expensive wines directly. The average shipped wine bottle price spiked by 2.4 percent.

So why the rise in these sales? Well, thanks to e-commerce giants, buyers now expect direct shipping on most products. So why not from their favorite winery too?

“The direct-shipping channel has matured into a mainstream option for wineries to meet growing consumer demand,” said Larry Cormier, general manager of ShipCompliant by Sovos, in a press release. “As buyers continue to prefer direct shipping of all the products they buy, this channel must rely on organic growth, not new states opening for shipments. As a result, we anticipate strong but slower growth in the years to come.”

Most of today's wine sales are on-premise, but of the $30 billion in sales made from off-premise wine sales, DtC accounted for 10 percent.

Back in 2012, DtC wine sales were $1.5 billion. Fast forward to today and the sales have more than doubled.

Napa County wineries are shipping the most wine in the country with 45 percent of shipments coming from this region. The average price of wine from this region spiked by 7.1 percent last year, which means wine prices are expected to decrease come 2019, especially as the market becomes more saturated with more affordable wine options.

“This may be an early indicator of what’s to come for the whole channel in 2019, as price increases have historically been followed by flat or declining prices the following year,” said Klingensmith, publisher and president at Wines Vines Analytics.

Learn more about the 2018 DtC wine trends at "Wine Business" now.

Want to know what 2019 will bring when it comes to wine? Listen to this recent episode of The Barron Report below where Host Paul Barron talks with Emily Wines, master sommelier & vice president of wine and beverage experiences at Cooper’s Hawk Winery & Restaurants about the new era of wine drinkers.

How Marketers are Now Branding Cocktails

Foamy designs on a coffee or cocktail often dazzle guests. They can't help but to immediately take out their phones to document the beverage art to share on social media.

With that in mind, marketers are working with bars, restaurants, and events to advertise with logo imprints in cocktails.

Not only are these cocktails a branded touchpoint but it often fosters organic social media action and engagement.

“There’s value in being able to showcase your brand on social media,” said Cody Goldstein, the founder of Muddling Memories to "SevenFifty Daily" “Guests immediately take a photo and put it on Instagram. When you see the cocktail with the branding of the company, it ties it all together.”

But marketers aren't the only ones jumping on the branding drink bandwagons. These adorned drinks are becoming more popular at weddings and other parties.

There are a few ways these logos or images are showcased on cocktails. One is with edible printing.

"This option offers the most elaborate presentation choices: Special printers and edible ink are used to print images on thin “sugar sheets” or rounds of rice paper or “wafer paper” that dissolve into drinks, or to print images directly on top of cream or foam," writes "SevenFifty Daily"

These sugar sheets allow for even full photographs to be melted on to cocktails or coffee beverages. This technology has been around for a while but wasn't approved by the FDA until quite recently, according to Van Kolors, a co-owner of Ink4Cakes that launched its Top Melts beverage line last year.

Top Melts only does large orders and makes 10,000 to 20,000 sugar sheets for cocktails a month, each cost about 23 to 30 cents per unit.

Another technique being used for beverages is branding ice cubes. Laser etching of ice makes a design in the interior of an ice cube. The logo remains in the beverage for much longer, but this method is pretty costly.

Then there's ice stamping, where a logo or design can be added to an ice cube.

Learn about the other ways that beverages are being branded at "SevenFifty Daily" now.

Looking to see what other cocktail trends will be prevalent in 2019? Check out the video below to see what types of cocktails consumers will be gravitating to in 2019.

What Will Be the Spirits Giant Diageo's Next Move?

Earlier this month, Diageo, the world's largest distiller sold off 19 of its lower-end spirits for $550 million to focus on its premium lines.

The company has managed to reverse revenue declines over the past five years and according to Diageo, the company is on track to have a 5 percent sales increase in 2018.

With an expansive portfolio of spirit brands including Smirnoff, Baileys, Guinness, Johnnie Walker, Cîroc, and Tanqueray– what does the future hold for the spirits mogul?

There could be some challenges considering the "Brexit negotiations, currency volatility, trade disruption brought about by the actions of the Trump administration, and other countries' retaliatory measures," according to "Just Drinks."

But the company has consistently made smart moves to remain slim and trim like it's recent move to sell off the underperforming spirit brands. In 2015, the company sold most of its wine assets.

Diageo is also one of the many beverage companies looking to get into the cannabis market in Canada.

According to a recent report by "Bloomberg," Diageo was allegedly in talks with at least three cannabis producers based in Canada.

The spirits producer also has been focusing on nurturing new brands by funding Distill Ventures, which is an incubator for spirit start-ups.

"In early-2018, Diageo bought Berlin vermouth maker Belsazar - its first acquisition from Distill Ventures. The move is a sign that the company will look to use Distill Ventures to facilitate its entry into key growth areas such as, in this case, the aperitif occasion in Europe," writes "Just Drinks."

Not to mention, Diageo will be investing significantly in new product development. The company is building a new tech hub in Scotland to research and create new innovations within its spirits portfolio.

Read more about the future of Diageo at "Just Drinks."

We recently covered how Diageo was selling off 19 of its brands to focus more on the trending craft spirits market. Watch the recent episode of The Barron Report where host Paul Barron analyzes the company's latest move.