Mzansi’s liquor industry, valued at R144 billion, has displayed remarkable resilience and growth despite the challenges posed by the Covid-19 pandemic. An analysis by NIQ South Africa reveals that the sector experienced a robust 19.4% increase in annual sales in 2023, showcasing its ability to adapt to changing consumer tastes and preferences.
The standout performer in 2023 was the flavoured alcoholic beverages (FABs) category, which includes ciders and coolers.
Gareth Paterson, NIQ-Gfk South Africa’s client strategy lead, notes that while traditional segments like beer and spirits faced hurdles in returning to pre-pandemic sales levels, FABs witnessed a significant uptick in sales.
Shift in consumer tastes
He remarked, “While beer and spirits faced challenges in returning to pre-Covid-19 sales levels, FAB’s upward trajectory saw them capturing a larger share of the liquor basket. This reflects a significant shift in consumer tastes towards variety and flavour innovation in alcoholic beverages.”
FABs have not only increased their market share but have also surpassed stalwarts like whisky, beer, and vodka. This surge propelled their market share to 22%, up from 20% the previous year. Concurrently, wine and spirits, particularly gin, brandy, and liqueurs, also experienced an increase in volume sales.
However, the recovery in on-site consumption at bars and restaurants has been slower, with more South Africans opting to purchase alcohol from supermarkets, hypermarkets, spazas, and non-branded superettes.
This shift in consumer behaviour highlights the resilience of traditional trade channels and the dominance of grocery chains in the post-pandemic landscape.
A closer look at Generation Z’s liquor consumption patterns reveals fascinating insights into the preferences of younger consumers. CGA’s analysis, powered by NIQ, indicates that 52% of Generation Z frequents hotspots like restaurants and bars weekly, demonstrating their affinity for out-of-home leisure experiences.
Moreover, this demographic displays a preference for cocktails over beer, presenting an opportunity for spirits manufacturers to capitalise on this trend.
Gen Z’s preferences
Influencers wield considerable sway over Generation Z’s purchasing decisions, with 70% citing social media as a key influencer for dining and drinking choices.
Additionally, 57% are influenced by celebrity endorsements or ownership when selecting beverages. Notably, younger consumers prioritise supporting sustainable, ethical businesses, with 81% considering this factor in their food and drink choices.
Looking ahead, the South African liquor market is poised to navigate a new era of post-prohibition consumption patterns. While traditional preferences persist, innovative offerings and sustainability initiatives will play a crucial role in meeting evolving consumer demands.
Paterson emphasises the importance of consumer-centric strategies and incorporating local ingredients to drive growth in the sector. He concludes, “As conscientious consumption becomes increasingly influential, it will shape product innovation and market strategies in the year ahead, paving the way for a dynamic and evolving liquor landscape in South Africa.”
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