More Americans Are Choosing to Drink Alcohol At Home

With retail price increases for alcoholic beverages remaining more moderate than the overall CPG industry, a new report from market research firm IRI has found that many consumers are choosing to celebrate and socialize at home. The company’s "2022 Midyear Alcohol Update" also shows that challenges in on-premise establishments, driven by labor shortages, rising prices and reduced menus, are a major driver of the trend.

As far as trends in at-home imbibing, IRI found that better-for-you alcohol options and alternative products are gaining traction among consumers, as are interesting flavor combinations, twists on classic cocktails and contemporary claims. Premium beer and wine and super-premium spirits are driving continued growth, and e-commerce continues to be a viable channel for beer.

“Consumption trends continue to fluctuate with the impact of supply chain challenges and rising inflation, but opportunities for growth remain,” said Scott Scanlon, EVP of the beverage alcohol vertical for IRI. “This report provides an outlook on the state of the beverage alcohol industry and areas ripe for innovation. Consumers are looking to indulge and create entertaining experiences at home, and retailers should emphasize premium products and products with unique attributes in this space.”

According to IRI, promotions will be an essential strategy for shopper retention as inflation and competition continue to rise. Ready-to-drink cocktails remain an enticing option for consumers, though IRI cautions that brands should have a point of differentiation in the segment.

Additionally, marketing should center on at-home entertaining occasions and giving consumers options. While not currently as widely used for alcohol purchases, IRI makes it clear that e-commerce is an integral part of a consumer's shopping experience and is critically important for omnichannel success.

On Aug. 1, IRI and The NPD Group completed their merger, which was first announced in April. According to the companies, the merger brings together colleagues across the globe to offer thousands of clients a comprehensive, accurate view of consumer behavior and total retail purchasing and consumption trends across many industries.