Key Themes In Recreating Social Occasions For Craft Beer In 2021

Is 2021 the new “Roaring Twenties” for Craft Beer?

“The New Roaring Twenties” has become a popular concept in the English-speaking world, suggesting a new era of booming sales of away-from-home alcohol and other indulgences once COVID-19 restrictions are lifted. Whilst early sales figures from markets like the US following the removal of many restrictions suggest pent-up demand is very real, there is reason to be cautious. For one, any parallels with the 1920s are shaky at best, with the hedonism of the era owing as much to the horrors of World War I as to the impact of the Spanish flu. Likewise, lockdowns in 1918 were not as prolonged, nor were consumers as able to pursue the home-based lifestyle (some) consumers adopted in 2020.

What is more, it is far from clear when restrictions will be fully lifted around the world, given widely varying case rates and vaccine roll-outs. Finally, the Roaring Twenties scenario suggests a significant percentage of consumers will largely abandon habits formed over the last 12-15 months; whilst a surge in demand in the short term (3-6 months) seems relatively likely in many markets as consumers look to reconnect with others, a desire for both safety and convenience will likely persist. Though “virtual happy hours” will (hopefully) be consigned to history, the range of investments consumers have made in their home equipment, coupled with changing work habits in some markets, means competition for social occasions between the home and elsewhere will likely intensify.

A new social geography in craft beer

The pandemic revealed a sharp divide in most markets between those workers able to work remotely and those essential workers still required to work in an office, or a warehouse, or drive a delivery route. The “Future of Work” is often a discussion about the future of relatively well-paid office work. That said, work patterns are shifting for enough consumers to significantly change the geography of weekday socialising, particularly for the knowledge workers most likely to work in urban core areas. Whilst most workers will continue to go into the office at least a few times per week, in the highest-income cities in the highest-income markets working hours and locations are expected to become more flexible.

This creates new opportunities for reaching consumers at home or in their neighbourhoods, particularly for the types of weekday, after-work occasions which drive significant spending in alcoholic drinks, whilst reordered morning commutes create new paths to purchase in coffee and hot drinks more generally.

As consumer social occasions become more dispersed geographically, proximity becomes key. Delivery and e-commerce form a significant part of the solution, yet there is also real potential for more-capable machines and points of contact within consumers’ homes.

The advance of “hometainment”

For food and drink product manufacturers, next-generation in-home devices – drink dispensers, coffee machines, cooking devices, infusers, and others – could prove an important component of long-term post-COVID-19 strategy, offering an ongoing connection with consumers who have developed a host of new habits following more than a year at home.

The future likely lies in machines that capture consumer preferences, allowing for customisation while creating feedback loops that can drive more effective new product development. For manufacturers, the possibility of whole new datastreams on consumer socialising and entertainment habits is potentially invaluable.

Any strategy involving more advanced machines—be it for cocktails, coffee, tea, craft beer, or others—will benefit from ever-closer integration with smartphones. As social occasions become more dispersed, the need to track consumer habits—and the data it generates—becomes vital. As product manufacturers increasingly combine foodservice outlets, vending machines, retail operations, and home machines, there is an opportunity for those brands able to respond to individual consumer profiles (and the data generated) contained within an app across every point of contact.

A new path to purchase

Any lasting shift in consumer socialising patterns has significant long-term impacts on the way products are introduced, marketed, and discovered. Nowhere is this truer than in drinks, where on-trade outlets such as bars, coffee shops, and restaurants—and the experiences they provide—are vital components in the path from product discovery to long-term brand loyalty. Though consumers are expected to return to many of their pre-pandemic habits over the next 12-18 months, lockdowns have had an impact—retail food and drink spending surges have thus far remained stable in many markets, for instance, with booming e-commerce sales often driving larger average baskets and a willingness to experiment with more premium items.

This is not to say that nights out at the bar or meetings at the coffee shop are going away, but for many consumers they will be joined by a range of different social occasions taking place at home, served by a combination of third party delivery, e-commerce, home machines, and digitally native, direct-to-consumer brands. All these channels can serve as powerful sites of discovery, trial, and long-term purchasing, but they require a range of different approaches, with beverages’ place in third party delivery platforms still very much being decided. What is more, the home can serve as a site of discovery and social experience for a host of new products, of which cannabis is one.

New moods, new occasions

While retail sales of alcoholic drinks surged in 2020 in most markets, overall consumption was actually flat to declining during the pandemic, perhaps reflecting how little social drinking was taking place at home, with little in the way of revelry for most consumers throughout 2020. This pause in social events could drive a significant reset in consumer habits going into 2022—whilst alcoholic beverages, coffee, and soft drinks retained a place in consumers’ lives, lockdown time also created space to try new products and create new experiences. Legal cannabis sales, including both adult-use cannabis and CBD products continued to grow throughout 2020. Whilst some of this likely represents continued migration from illicit products, there is also a growing number of consumers—particularly younger consumers—looking for altered mental states and moods with fewer potential long-term health consequences and who found themselves in 2020 with significantly more time to themselves.

Whilst “cannabis cafés” and other cannabis-focused foodservice/on-premise environments are set to expand, among new consumers public environments are often not the preferred environment for discovering new mental states, even among close friends. This desire for new experiences in a safe environment will likely drive social consumption of cannabis and related products in smaller, more intimate spaces, particularly in consumers’ homes.