This is an ongoing series that identifies emerging commercial opportunities. We explore nascent and new behaviors that stem from periods of heightened change.
In this edition, we explore how the Covid-19 period may redefine new relationships between alcohol brands, bars and their audiences – and outline 5 opportunity spaces to further consider.
As people drink less; they want to drink better quality liquids and mixes.
A propensity to seek healthier and hand-crafted beverages has led the appeal of revamped RTD cocktail commercial innovations.
During C19, bars began bottling and canning cocktails to use up perishable supplies and keep cash flowing.
While this trend could have fizzled out as C19 subsided; canned and pre-mixed cocktails are now making their way to high-end restaurants as part of their menu along with food.
This presents a clear opportunity to redefine the once saccharine category of RTD mixed drinks.
Will these premium RTDs be found at grocery stores and gourmet shops?
How can bars involve customers with finishing / garnishing at-home?
People drink to be part of a tribe. New occasions and venues for alcohol consumption developed during C19.
As avant-garde music clubs close down, Shanghai is left with fewer underground electronica venues. An opportunity for brands to support nightlife infrastructures in need.
An inspirational point of reference, Jägermeister’s Berlin Night Embassy was created as a ‘cultural center first, drinking establishment second’.
Home & office
As C19 accelerated both the ‘drink-from-home’ and ‘eat-at-home’ trends, an opportunity for brands to develop serves that cater to this.
Zoekto is a cocktail mixed in a bag available on Ele.me that white collar customers order for their home parties, where food plays as significant a role as drinks.
During lockdown, a Shanghai club that livestreamed DJs on Douyin raked in 2 million yuan (US$286,900) in five hours.
These cloud clubbing sessions are making money by letting users spend real money on virtual gifts for performers. Can brands play a bigger role in nascent drinking contexts?
Liquid notes that allow consumers to travel virtually are appreciated.
Foreign spirits represent less than 5% of the total market in China. To grow the category mainstream, there’s still a need to make a highly foreign category more familiar.
Coffee and tea shops are more familiar hang outs for the middle class in China rather than cocktail bars which can seem daunting outside their niche audiences.
Coupled with a reticence towards packed bars and clubs, there’s an opportunity to add spirits and liqueurs into (bubble) tea and coffee shop occasions to attract new customers.
Consider partner roles that tap into local leisure habits beyond the bar.
J. Boroski creates monthly cocktails inspired by local flavors. In May, the Shanghai breakfast favorite (jianbing – an egg and scallion crepe) was the first item launched.
While localization isn’t new, we foresee domestic travel to increase dramatically creating an opportunity to push forward local distillates and flavor profiles.
Accelerate local flavor / notes in spirits development.
MIXERS & MODIFIERS
Health and wellness food trends begin to permeate alcohol purchase drivers.
Spirits can also tap into health and wellness trends. C19 has accelerated consumers’ needs for healthier living.
Although the ‘no-lo’ trend hasn’t hit China, people are looking for genuinely lighter serves or mixers that ‘feel healthier’ - and crucially feel more special than the ubiquitous tonic water and tonic offers.
An opportunity for spirits companies to diversify their portfolio in order to speed up growth.
The slow and steady resurgence of kombucha is seeing its use as modifier and mixer, alongside shrubs and vinegars as people seek to lower sugar intake.
Yang Yongqing has created a kiwi distillate from kiwi fruit making for a sweet and tart liquid.
Finally, a current market gap is locally sourced waters and sodas to mix with spirits.
Although not a new innovation, a local China premiumized product would offer volume alongside pairing to sell through brown and white spirits.
IP PROFIT SHARING
Bars band together to create profit sharing schemes and new business models.
The bar community has created new financial support mechanisms.
As bar owners seek to stay afloat, China has played host to bars from around the world by creating a novel revenue sharing model.
Sales from each drink are split between the bar which invented the serve and the host venue. Shake Shanghai created this menu to showcase Singapore’s Jigger & Pony bar menu.
As international travel is restricted, people seek travel through cocktails and markets that are opening-up can help those that remain closed.
How can spirits companies leverage this model to launch the next iconic serve or as a way to renew their relationships with trade?