Flavor is everywhere these days: It’s in everything from food to detergent to air fresheners. And when we look down the retail aisles, it can be tough to tell the difference between the adult beverage aisle and many others in the store. The reason is clear: Flavors are stirring up sales and attracting demographic groups to alcoholic beverages that they might not typically buy otherwise. And the trend seems to only be growing.
From Fruits to Sweets to Spices and Everything In Beween
What started in the more mainstream fruit and extracts realm has steadily migrated to a dizzying array of new frontiers, as brands and suppliers are hopping on this hot trend with a bevy of new flavors and products. For example, Nielsen tracked only two pumpkin-flavored beers on the U.S. market in 1995. Today, we track 80—and that’s just one, comparatively tame well-traveled flavor. Flavors like cinnamon, peach and honey have exploded into the spirits category: The former now generates more than $200 million annually in Nielsen-measured off-premise (store-bought) channels, and the latter two each generate over $100 million. And to top that, all apple-flavored beers, flavored malt beverages and spirits account for a staggering $350 million of annual sales.
And apple has branched out beyond beer. Today, hard cider is the big craze. In fact, total cider sales have jumped from just $78 million in 2011 to $470 million for the 52 weeks ending Jan. 3, 2015, with apple flavor being a big contributor. Cider is a relatively small category compared to beer, but it’s growing very fast and seeing new products from both large and small beverage companies. Cider is also somewhat of a “gateway” beverage, as three-fourths of consumers who buy it also buy beer, and three-fourths also buy wine.
In the spirit aisle, flavors span from the docile to the obscure. Suppliers have pushed the limits from more traditional flavors like vanilla, lemon, sweet tea and cinnamon to plenty of avant-garde options, such as peanut butter and jelly, salmon, pickle, acai, cucumber, horseradish, caramel, marshmallow, cake and apple pie. While some win over the palate and some don’t, flavored spirits make up a notable piece of the overall pie: just more than 20% of U.S. vodka sales in Nielsen-measured off-premise channels come from flavors, and flavors have zoomed to represent 12% of whiskey sales.
One thing worth noting about flavors is its lifespan. In looking at trends over the past few years, flavors can have a very short life cycle if consumers don’t drink up. And the risk associated with an ill-flavored or ill-timed offering has suppliers seriously pondering their creative options—to get in, or to get out, or simply stay out. In fact, the number of spirit flavors growing today is much lower than it was just a couple years ago, as the flavor bubble seems to have burst for some spirits, especially within vodka. While vodka flavors like mango, peach, pineapple, cranberry, melon and kiwi continue to grow, and varieties like honey and cinnamon have worked well for whiskey, many others are heading downward. In fact, sales of several other flavors are now declining at double-digit rates, including the likes of sweet tea, coffee, lemonade, blueberry, chocolate, passion fruit, cherry, grape, pomegranate, ginger, mint, maple and a host of confection and dessert type flavors.
You Can Lead a Boomer to Flavor, But You Can’t Make Him Drink
To get a sense of current sentiment about the changing face of flavors, Nielsen recently conducted an online English-language survey that explored alcoholic beverage flavor preferences as they relate to consumer age and gender. Overall, the survey found that women enjoy flavored alcoholic beverages much more than men. Forty-two percent of men indicated not liking flavored alcohol beverages, compared with only 27% of women.
Consumer preferences for flavors peaks with younger generations, and decreases with age, no doubt a reflection of these consumers having more exposure to a wider spectrum of flavors in their lifetime, as well as being more culturally diverse and more open to them. The sweetest spot for flavored beverage sales seems to be the young female consumer, as only 8% of women ages 21-34 indicated a dislike for flavored alcohol beverages. At the other extreme, 72% of men age 65 and older said they don’t like flavored alcoholic beverages.
Men and Women, Apples and Oranges
And when we drill down by gender, we see varying flavor preferences. For example, males who like flavors rate apple as their No. 1 choice (30%). Females, however, prefer strawberry, and to an ever larger degree (40%). Men and women have such different preferences for flavor that two of each group’s top five flavors aren’t on the other group’s list.
There are also significant preference differences beyond men and women’s top five lists. For example, men prefer grapefruit and cinnamon more than women, while women like blueberry more than men.
Location, Location, Location
Flavor preferences also differ by region. For example, while strawberry is No. 1 in the Northeast, South and West, it came in No. 2 in the Midwest, supplanted by apple in the No. 1 Midwest spot. Within the four regions, cranberry is a top five choice only in the South, and lemon is a top five pick only in the West. Further down the list, coffee and pumpkin pop in the Northeast, cinnamon and tea rank high in the South, and blueberry and grapefruit popped out West.
Understanding your consumers’ taste preferences across a number of dimensions is critical, given the cost of new product introduction and the value of store shelf space.
The flavor preference data in this article was derived from an English-language survey of 2,010 adults age 21 and older conducted online Oct. 8-10, 2014. Sales information was derived from Nielsen’s off-premise retail sales data for the 52-week period ended Jan. 3, 2015.