Champagne is usually the alcohol of choice for New Year’s festivities but this year there is competition, according to an expert.
“What’s interestingly happening this year is that in the month of December, when we compare year over year, we actually see that prosecco is growing quite significantly, around 20 %, while champagne is down 4%, Drizly, head of Consumer Insights Liz Paquette, told Yahoo Finance (video above). “So while we still expect champagne to probably take the top place for New Year’s Eve, we expect some consumers to turn to prosecco and other alternative sparkling wines this year.”
Sales of expensive drinks as the champagne slowed down. High inflation has changed consumer behavior as customers shrink or opt for alternatives. In addition, last year’s supply chain crisis resulted in a shortage of champagnewhich drove up the prices of the bottles.
the average price of champagne this year costs $55.85, but it can cost up to $73 in some states, while prosecco fresh an average of $14 to $20.
Since 2020, a 750 milliliter bottle of champagne has seen its average unit price increase by 25%. Over the past year, it has increased by about 6%. Meanwhile, Paquette noted, growth is “a little softer” for prosecco, which is why many consumers are turning to it as an alternative.
Don’t count the spirits
Despite growing demand for cheaper sparkling wine alternatives to champagne, Paquette said other liqueurs like spirits shouldn’t be ruled out either.
“Consumers are definitely buying spirits and spirit accompaniments to make cocktails on this holiday,” she said. We are seeing quite significant increases in liqueurs, cordials and schnapps [along with] quite significant growth in tequila, in particular.
According to Council of Distilled Spiritstequila saw record growth in market share in 2022, dominating the distilled spirits industry with revenue of $1.2 billion,
Low-alcohol, flavored ready-to-drink (RTD) cocktails are becoming equally popular. Between 2020 and 2021, this market segment grew by $16 million.
RTDs offer a variety of tastes with little or no preparation, and manufacturers can modify products according to consumer demands. The average price of an RTD tequila margarita can cost around $5, and tequila-based RTDs are the fastest growing category, according to Paquette. This is critical for manufacturers as spending on alcohol has fallen, according to data from morning tip.
“Ready-to-drink cocktails are having a moment, just like hard seltzer did a few years ago,” said Paquette, adding, “I would expect to see many consumers buying ready-to-drink cocktails as well for the holidays.” So if someone is looking for something a little easier and doesn’t want to mix those cocktails themselves, that will be another option for people as well.”
Non-alcoholic spirits, wine and beer are also becoming increasingly popular, according to Paquette, with millennials and Gen Z leading the way. Data from the Drizly platform indicates that non-alcoholic wines have seen a 500% increase in sales share on its site.
“We anticipate this to be a trend that’s here to stay for quite some time,” Paquette said. “This category is just getting started. The sky’s kind of the limit there.”
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Tanya is a data reporter for Yahoo Finance. Follow her on Twitter @tanyakaushal00.
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