Daily Insights

State of the Spirits Industry

By: Brett Finkelstein | Jul 08, 2019

You’ve seen the headlines. Americans are drinking less alcohol, and maybe millennials are to blame? With the growing trend towards health and wellness, consumers between the ages of 21 and 35 are drinking less. However, with so much pointing towards an industry decline, online alcohol retailers are booming, proving to be a crucial opportunity for growth for alcohol brands. Online liquor sales increased 61% between Q1 2018 and Q12019, outpacing the 5% growth of the industry overall. In Gartner’s L2’s Digital IQ Index: Spirits US, 69 brands were benchmarked on their digital performance, and establish the state of the spirits industry online.

While many brands remain nascent with their investments in digital, leader brands are leaning in and thoughtfully implementing strategies to stand out on search, site, social and across retailer partners. Index leader Johnnie Walker has built out a robust brand site to aid users in conducting product research as well as optimize for search visibility. The brand hosts an extensive gifting section on site, separated by occasion, and supplements it with paid investments into nonbranded gifting keywords on search like “fathers day gifts” to maintain year-round relevancy and traffic. Index laggards, on the other hand, fail to provide brand defense on search for even their own brand terms, or lack the connection on site to e-tailer handoff or a physical store locator, leaving consumers at a loss when interacting with the brand online.

The Index falls into a bimodal distribution of the “haves” and the “have nots” when it comes to proper implementation of digital strategies. Unlike more mature markets, there remains significant whitespace in digital for these brands, and there is an opportunity for early-movers to create brand awareness and engagement by adopting new strategies on search, creating content that resonates with consumers on social and tapping into retailer audiences through partnerships. To do that, brands will need to work fast, as newly establish best practices become crucial to implement and the whitespace is eaten up by first movers.