Future of the Alco-Bev Industry, Post Pandemic

Sonal Holland, Master of Wine.

The lockdown has brought life as we know it, to a halt. When it comes to the economic aspects of recovery, there is immense uncertainty for almost all business sectors across the board. The F&B industry and the Alco-Bev industry, in particular, are facing the brunt of these unprecedented times. Zero cash flow, essentials-focused expenditure patterns and suspension of non-discretionary spends by consumers are concerns plaguing almost all sectors, in the throes of the pandemic. The journey to a new “normal” once the threat dissipates will no doubt be challenging. Keeping all this in mind, Sonal Holland, Master of Wine, weighs in on trends we are likely to witness in the Alco-Bev industry in the coming future:

1. Once Alco-Bev businesses become operational post lockdown, the most likely response will be an increase in hoarding. Panic-stricken consumers will rush to buy and stock up on their alcohol supplies, having spent extended periods without indulging in their favourite tipples.

2. In terms of consumption patterns, the sentiment is quite negative for restaurants and bars. It is believed that post lockdown, far into the exit plan, people are likely to curb unnecessary expenditure and it instead seems that consumption in the privacy of people’s homes will become more the norm. Even after the suspension of the nationwide lockdown, there will be an element of apprehension to congregate or step out in public. People will still be cautious, will likely continue to practice safe social distancing and the frequency of stepping out for a meal will reduce. This trend will also reflect on the customer-forward segments of the alco-bev industry with crowds at bars, bar nights, parties etc thinning out, despite these businesses running at full capacity.

3. Man is a social beast; this means that the need to interact and socialize will not disappear. It will, however, undergo a significant modification post lockdown times. Smaller format parties and gatherings will become the norm, as entertaining within the confines of personal spaces will pose far fewer safety threats as opposed to public spaces. People are likely to host intimate gatherings with greater frequency, after having been confined to their homes without actual physical interaction with friends and loved ones for extended periods. Social interactions after the lockdown will return to the core values of quality over quantity, with guest lists being restricted to only one’s closest, special friends and family, as opposed to lavish dos extending invitations to all and sundry.

4. Even as the world will chart its return to normalcy, people will remain spend conscious and price sensitive. That is not to say consumers will not indulge in their favourite goods and services that they have missed during the lockdown. Spirits and alcoholic beverages will still be consumed, maybe more than they are currently, but a shift towards favouring inexpensive to mid-tier price points seems inevitable. Conscientious spending will govern how people consume services and commodities. 

5.  With economies worldwide taking a massive hit in the wake of extended lockdowns and shuttering of businesses, the trickle effect for consumers will just be as impactful. Consumers will seek value for money for every purchase made – this trend will also spill over to the alco-bev industry. While this is concerning, there is a silver lining after all, especially for Indian premium wines. This is the perfect time for Indian winemakers to leverage their premium offerings through carefully planned digital campaigns. Indian wines in the premium range are at par with semi-popular international wine labels or non-descript wines from major wine-producing nations which also sometimes fail to deliver in terms of quality against inflated price points. The Indian premium wine segment will see the dawn of a new era post lockdown if producers are able to capitalise on these new spending behaviours and drive home the attention towards quality; affordable price points; and easy availability, positioning themselves as a reliable choice to get a bang for your buck.

6.      Digital consumption of information for alco-bev products will increase manifold. With movement restricted currently, the dependence on the Internet is exponentially increasing. Whether it is information, news, education, entertainment or even purchasing essentials during the lockdown, this dependency on the Internet is unlikely to reduce. There is going to be a boom in online video consumption, regardless of the content category being educational, informational or recreational. There is already a new-found interest in learning about wine, sake and spirits, both formally and informally across a multitude of online portals, and this behaviour is not likely to die out anytime soon.

Inputs by: Sonal Holland, Master of Wine. 

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