I recently presented at the annual Drinks Business Conference about “the new consumer” and the implications for the alcohol industry.Pontificate

I started by talking about how the current financial situation in the UK is getting tougher, for example what began as a fear-led recession has turned into a reality. With inflation and unemployment on the rise, consumers have less money to spend on luxury items like fine wine and spirits.

As a result, the ‘live for today’ mentality has been replaced with more moderate, long-term thinking. Consumers are less spontaneous than they used to be – they pontificate over their purchases more. Spending has become a serious business.

This has accelerated the pre-existing trend towards people drinking less than they used to. This makes trading them up essential, if businesses are to recoup lost revenue from declining volumes. Mintel has found that there is still an underlying trend towards premium goods, after years of relative prosperity and cheap credit. Our research shows that they also don’t want to sacrifice quality: with 64% of consumers preferring quality over quantity when drinking alcohol, and 78% saying they are able to taste the difference between high- and low-quality products.

One solution to this is for brands to be more flexible about how they package their products, such as cans of wine or bag-in-box wine as possible alternatives to bottles: the latter’s advantage being that it will last a few weeks rather than a few days, which will appeal to consumers on a budget. Smirnoff’s introduction of a 35cl bottle for its Smirnoff Red is an example of a company’s ability to retain quality by reducing quantity.

There is also more emphasis on brands to “prove” that they are what they say they are, as the new consumer is savvy at playing detective and spotting holes in a brand’s story. Transparency and the ability to back up your narrative is becoming more and more important.

It is also important for brands to communicate a consistent and coherent quality message, as perfected by Jack Daniel’s which, with its simple, successful marketing campaign focusing heavily on the Tennessee whiskey’s history and provenance, and combined with its iconic packaging means that consequently view it as a “more premium” product than more obvious contenders such as Absolut vodka and Glenfiddich Scotch whiskey.

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