Nielsen, the global monitoring and data analytics company, recently released its latest, syndicated “Liquor Shopping Trend Report” at the 100th China Food and Drinks Fair. According to the report, 92% of consumers’ actual spending on liquor in 2018 maintained or exceeded that of the previous year. At the same time, the liquor market is showing a rational consumption trend. Consumers are no longer blindly pursuing high-end liquor, and are now turning to products that better meet their individual taste and deliver high quality for good value.
“China’s economy maintained steady growth in 2018, and policies to optimize the business environment and promote development for consumer markets continue to show results. Nielsen’s Consumer Trend Index has shown strong momentum in the past two years, reaching a level of 113 in the last quarter of 2018. Good employment expectations and stable personal economic conditions have greatly boosted the willingness to consume, which is reflected in Chinese consumption of alcohol,” Senior Director of Nielsen China, Minnie Yu, said on the sidelines of China Food and Drinks Fair in Chengdu.
The China Food and Drinks Fair held since 1955 has been known as the “wind vane” of the food and wine industry. Nielsen was invited to share the latest development trend of the liquor industry with many giants in the food and wine industry and to share with various manufacturers the challenges and opportunities faced by liquor enterprises.
1. The growth of the middle and high-end price segments is better than the overall growth of different wines.
Judging from the development trend of each category in the recent year, the sales performance of different categories varies, but they all show the trend that the growth of the middle and high-end price segments is better than the overall growth of the categories. For beer and wine, the consumption upgrade has led to the development of these categories. For liquor, the sales growth of the middle-end and sub-high-end is much higher than that of the high-end and other price segments. Value-based products that are more in line with the needs of mass consumers are leading the market. The new cycle of liquor gradually shows a trend of value return.
A closer look at the sales of different price segments in the liquor market shows the subtle changes experienced by the liquor market in the past three years. Mass liquor continued to adjust their positions. Industry concentration was strengthened. Products from low-yield small factory and less qualified distribution were gradually removed from the market. The decline in the sales share of mass alcohol is actually a manifestation of internal adjustment in the market segments to eliminate the inferior and preserve the superior. The mid-range liquor (150-300 yuan price range) keeps a steady and progressive trend, while the sub-high-end liquor (300-700 yuan price range) shows the most outstanding performance, maintaining a growth rate of more than 20% for two consecutive years. The whole liquor market shows a trend of rational consumption and value return. Consumers no longer blindly pursue high-end liquor, but also show higher requirements for low-end liquor. Products with high cost performance, such as sub-high-end and mid-range, play a leading role and drive the growth of the industry.
“Behind the change in growth pattern within the liquor industry is a shift in consumer shopping behavior and demand. We are seeing that the effect of previous decision factors, such as focusing only on famous brands or premium-priced products, is beginning to fade from the minds of today’s increasingly sophisticated consumers. Now, we see a trend towards products that deliver high value for their price and which are more suitable for the personal taste of the consumer. This trend means there is significant opportunity for brands to appeal to emerging segments of consumers who are willing to spend on the products that suit their individual taste,” said Minnie Yu.
2. Unpackaged wine consumers pay more attention to taste, alcohol content and appearance.
The trend of value for money has brought new vitality to the unpackaged liquor market. In 2018, many manufacturers renewed their efforts in the unpackaged wine market. Nielsen research shows that consumers of unpackaged liquor pay more attention to taste, alcohol content and appearance when compared with the total population of liquor consumers.
Specifically, the drinking population of unpackaged liquor prefers liquor body with special taste and long aftertaste. At the same time, low alcohol content is especially favored by the consumers of unpackaged wine, who pay more attention to the characteristic of “not easy to get drunk”. Finally, the appearance of the unpackaged wine plays an increasingly important role in the consumer’s choice, and bottles with design and appeal can make the wine stand out.
3. New media are more attractive to young wine consumers under 35 years old.
As one of China’s traditional industries, the main purchasers of liquor have long been recognized as older consumers. However, in recent years, with the rise of new consumption forces and the public’s affirmation of Chinese traditional culture, liquor enterprises are paying more attention to the cultivation of young consumption groups. Then the problem arises. How can these young liquor consumers be reached more effectively?
Nielsen found through the latest 2019 shopping trend of wine that alcohol advertising actually has a higher reach rate for young people under 35 than for older people, and among different media forms, new media is more likely to attract young alcohol consumers under 35. Especially at the mobile end, the alcohol advertisement of the alcohol consumer aged 26-35 years old reaches far more than that of the alcohol consumer aged 36-45 years old. In the digital era when mobile Internet permeates every corner of public life, traditional wine companies should embrace the habits of the younger generation with a more open attitude and welcome the emerging digital media era.
“It is an ongoing battle for traditional liquor enterprises to capture the attention of younger consumers. Post-90s and even the post-00s consumers, demand products that have clear messaging and reflect their personal taste. Liquor brands need to highlight their individuality and unique branding when appealing to younger consumers. Adopting effective marketing channels and content is an important part of building emotional engagement and interaction with younger markets,” Minnie Yu said.