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Smaller Footprints, Stronger Connections? Sustainability is Gaining Momentum in Alcoholic Drinks

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Environmental issues remain some way from top of mind for the typical alcoholic drinks consumer. Purchasing choices in the industry are governed by an array of factors, often led by brand image and positioning. Yet, sustainability is starting to form part of the picture, and demand will gradually shift further in that direction.

The topic holds importance across generational groups. However, Gen Z consumers tend to be the most vocal, so progress will help to ensure future relevance as more of the cohort reaches legal drinking age.

While details and definitions of sustainability vary, protecting the natural world is consistently deemed an essential feature.

“Reducing impact on the environment” is by far the most accepted interpretation of the term 'sustainability', selected by 85% of global respondents

Source: Euromonitor International Sustainability Survey 2022

Overcoming the price barrier needs to be a priority

The relationship between recognition of environmental pressures and changes in consumption is not straightforward. Consumers, broadly speaking, remain unwilling or unable to pay more for sustainable products despite acknowledging a need for change.

Chosen by 41% of consumers, “high price” relative to alternatives emerged as the key barrier to purchase

Source: Euromonitor International Sustainability Survey 2022

While there are certain consumer segments who will seek out and pay extra for sustainable options, alcoholic drinks companies will primarily have to reduce their footprints without increasing prices, especially for mid-priced and economy options. Research, pilot schemes, and knowledge-sharing will help to ensure efforts are effective and efficient.

Smaller Footprints Chart 1.svg

Progress is becoming more visible

Packaging plays a vital role in alcoholic drinks branding, in addition to being a practical requirement, of course. However, it tends to be a major source of carbon emissions and resource use, so reducing the impact is a strategic focus. Innovation in formats or materials that deliver environmental benefits can also help brands to stand out in crowded categories.

Advances in technology will make an important contribution on the production side. The digital domain offers potential in sustainability-focused marketing too; augmented reality technology or QR codes on cans and bottles or in bars can offer insights into activities, targeting those who are already engaged with the subject.

At the same time that progress is gaining greater visibility, necessity is also prompting consumer-facing change and elevating sustainability as a talking point. Wine grapes are a sensitive crop, highly responsive to climate and soil conditions. Producers are turning to “forgotten” or hybrid grapes in the search for more resilient options, and new growing regions are emerging.

Environmental credentials can enhance brand perceptions

As environmental efforts advance, it will become easier to incorporate meaningful developments into marketing in a way that aligns with broader brand positioning. Communication around the topic can strengthen associations with nature or ties to a specific location, especially for premium brands building on existing statements about ingredients, origin, and production techniques.

Tequila is a case in point. It has been one of the most dynamic categories in recent years and perhaps illustrates the premiumisation trend more than any other. Concerns have been raised about rapid growth bringing the risk of unsustainable production with negative impacts on wildlife or communities. Responsible practices are therefore becoming increasingly prominent in super-premium brand promotion.

Sustainability fits with the community-orientated ethos of many independent or craft-positioned brands and can offer a valuable point of differentiation given intensifying competition – if claims are backed up by real action. Small producers will often face significant challenges and setbacks as they work towards their goals, so transparency will be vital in building trust.

Eco-friendly attributes will feature in messaging more and more – often through simple, concise references or verification logos, but occasionally taking a leading role in large-scale advertising campaigns too. On its own, sustainability will not become a core driver of alcoholic drinks purchasing decisions, in the near future at least. Nevertheless, expectations are changing. Sustainability will be a key chapter in future successful brand stories.

Learn more in our report The Advance of Sustainability in Alcoholic Drinks

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