Alcohol adspend to beat market with 5.3% growth in 2021 as hospitality opens up

25 May,2021

By Our Staff

 

The Zenith’s Business Intelligence – Alcohol: Beer + Spirits has published its report. Alcohol adspend to rise from US$6.7bn in 2020 to US$7.7bn in 2023. Alcohol brands spend twice as much on television as the average brand, but will reduce their spending by 2.4% a year as audiences continue to shrink. Spirits brands have pivoted rapidly to owned online content, to help consumers replicate the brand experience – normally the main driver of sales growth – at home

 

According to the report, digital advertising to account for 30% of alcohol adspend in 2023, up from 21% in 2019. Alcohol adspend in 12 key markets will grow by 5.3% in 2021, ahead of the 4.9% growth of the ad market as a whole, as brands recover from a much steeper drop in 2020. Alcohol advertising will then grow roughly in line with the market, with 4%-5% annual growth in 2022 and 2023.

 

The pandemic has forced the alcohol brand experience to move online.

 

Said Ben Lukawski, Global Chief Strategy Officer, Zenith: “Spirit brands have surpassed beer brands in terms of sales value by offering more premium experiences and rituals around their product and serve,” “With the pandemic taking audiences away from the on-trade we have seen a greater emphasis on bringing these premium experiences in home through owned digital content.”

 

Consumers are now much more aware of the available options for buying alcohol online, and alcohol brands now have distribution networks in place to supply them. Zenith expects brands to expand their digital advertising to support alcohol ecommerce even after pubs and restaurants are fully open, fuelling 9.2% annual growth in digital adspend between 2019 and 2023, when digital advertising will account for 30% of alcohol advertising budgets.

 

Zenith predicts alcohol brands will reduce their expenditure on television by 2.4% a year to 2023, compared to the 2019 baseline, as traditional broadcast audiences continue to shrink. Out-of-home advertising, by contrast, will grow by 1.1% a year, even taking into account the pandemic-induced reduction in foot and road traffic. Television’s declining reach makes out-of-home’s ubiquity even more valuable.

 

Alcohol advertising to recover from 2020 decline by 2023

 

Alcohol advertising shrank nearly twice as fast as the overall ad market in 2020, falling by 11.6% compared to 6.4% of the market as a whole, Brand finances were squeezed by reductions in consumption volume, the average price per drink, and profit margins. With bars, pubs and restaurants closed, consumers drank less alcohol, and bought the drinks they did consume from shops where they cost less, with a much lower mark-up. Brands cut back their marketing sharply to protect their bottom lines, and their combined adspend fell from US$7.6bn in 2019 to US$6.7bn in 2020.

 

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