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These trends are shaking, not stirring, the alcohol industry in 2025

Katie Sweet
The innovation trends shaking up the alcohol industry. Image of some cocktails with liquid spilling and floating all over, with ice and pieces of fruit.
Alcohol product innovation in 2025

The alcohol industry has long been a bastion of tradition, with time-tested methods of production and deeply rooted brand loyalties. But, like many industries, this sector is seeing some big shifts. From the rise of “sober curious” consumers to a growing eco-friendly packaging movement driven by government regulation, the industry's landscape is evolving quickly.

It’s important for insights teams to understand these trends to stay ahead of the curve and have the context they need to deliver value to their organizations. 

For this blog post, I caught up with several experts in the alcoholic beverages space to learn more about how they’re thinking about innovation as well as took a look at the tops trends in this space. 

The experts I talked to include: 

  • Nick Rich, Global Consumer & Market Insights Leader, former Carlsberg Group

  • Tony Costella, Global Consumer & Market Insights Director, Heineken International

  • Dan Siddle, Head of Insights, Molson Coors Beverage Company

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Top trends right now for innovation in alcoholic beverages

To start, I asked about the top trends these experts were most interested in.

Financial trends

Nick began by covering a few financial trends in the alcohol space: “Volumes are growing overall, but with slight differences across sub-categories. Beer, wine and spirits are all showing continued marginal growth with beer predicted to grow the most through the next 1-5 years.”He went on to say, “Innovation is especially key to maintaining upward momentum and most visible in beer and spirit categories, driven by multiple established consumer trends.”

Operational trends

Nick offered a number of operational factors affecting alcohol manufacturers today, saying, “In a time of mega-disruption, from Covid to supply chain and through economic impacts on consumers disposable incomes, it has been a challenging time for all drinks brands and manufacturers.”A few of the ones on the top of his mind include:

  • Supply chain challenges remain and with persistent uncertainty in the geo-economic and geo-politics, big investments in manufacture and big-ticket product launches are taken with caution.

  • Channel shifts continue with off-trade (supermarkets, convenience, online, etc) investing heavily in ecommerce and manufacturers in D2C.

  • On-trade (bars, cafes, restaurants, etc) is finally returning from an incredibly difficult period in 2020-21 but it remains tricky navigating the affordability crisis and costs continue to be a challenge for all stakeholders.

  • Packaging and manufacturing methods are a major driver of innovation, led by new legal requirements from bodies such as the EU, meaning return and reuse of bottles, reduction of plastic use, sugar reduction and materials & water waste are now non-negotiables that all manufacturers have to invest in to align with new laws.

Consumer trends

Tony turned his attention to how consumer trends are affecting the category, “Obviously trends towards moderation are having a big impact, with low and no alcohol adult drinks seeing significant growth. But, as is often the case, there are also counter-trends with products helping consumers to let loose also doing well.”He went on, “In fact, there is a lot of innovation in beverages across multiple dimensions – with categories blurring and new solutions being developed to better meet consumer needs.

New product forms, new ingredients, new drinking rituals and new pack types are all emerging, and the market is becoming ever-more fragmented with greater choice for consumers. The ‘traditional’ big segments of lager, wine and spirits are all in decline, as consumers look to solutions that better meet their specific needs at a given moment.”Nick mentioned differences in consumer preferences across markets, “Traditionally, different markets have tended to have deep roots in one of the three main alcohol categories, wine and beer especially.

We do see new innovations and category blurring taking hold in markets more open to wider repertoires of alcohol consumption, the USA and UK being obvious examples.”He went on to mention an important trend in the alcoholic beverages space in recent years, “For example, the Hard Seltzer explosion in the USA post-2016 is beginning to plateau and it’s definitely been a slower growth trajectory outside the Americas, largely driven by differing flavor preferences in Europe and Asia but also time it will take to invest in awareness building and trial. One trend that Hard Seltzers, among others, have been very effective in driving is the continued rise in innovating to attract different and diverse demographic cohorts, be it younger drinking age groups or hyper-local segments.”

Nick ended with a point on premium products, “Even with costs and affordability being a challenge, we are definitely seeing an increase in premiumization and exclusive formats. Whether it be high-quality ingredients or existing brands expanding into premium sub-segments with line extensions, there remains a sizeable consumer base willing to pay more for high-quality and uniqueness.”

The role of AI in the alcoholic beverage industry

It’s not a blog about recent trends if AI isn’t mentioned at least once! So you know I had to ask about it. 

All the experts agreed that it is still early days for AI in this industry, but they focused on a few key areas:

The impact of AI on advertising & marketing

Nick began by saying that advertising is the first area to be affected, “Marketing and advertising is the most obvious and immediate beneficiary. From greater creativity in advertising assets, promotion and communication to faster identification of new growth pools and demand forecasting. All of these are already starting to be influenced by the speed and growing accuracy of AI-supported analysis and guidance on where investment may have the greatest return.” 

Nick also talked about the implications of AI on personalization: “And finally, personalization has been a long-established trend manifesting in multiple different ways but AI-supported platforms will no doubt prove ever more effective in targeting, profiling and messaging to individuals in ever more seamless ways.”

The role of AI in innovation cycles 

Dan gave his take on how AI can best be used in innovation today, “Where AI can add more value today is in the rapid screening of ideas for potential success. It can be applied to new concepts and even product formulations. It can help focus resources on things that are likely to be strong contenders, giving more time to develop and refine these before taking them to market. 

Tony built on this idea, giving more insight into the innovation cycle, “Right now AI is an incremental step, helping to optimize various steps in the existing process (ensuring concepts are written in real consumer language, speeding research and analysis etc.).”

Tony also presented a vision of the future of AI and innovation, “In the future, the whole innovation process could be completely overhauled using AI – and this is when we will see breakthrough impact. Our ways of developing innovation propositions in pieces (concept, pack, product, advertising…) and testing and optimizsing each of them is a process brought about by limitations of the tools we’ve had until now. This could look very different in a few years from now – and I’m excited and scared by that in equal measure.”

To round out our point on innovation, Dan made a great point about data sensitivity, “AI can also be used to test concepts that might be too sensitive to put in front of consumers because of a fear of information leaking.”

Things to consider

Finally, Dan mentioned the data that the AI is trained on, “Good results from AI relies on a good set of training data and longer-term the challenge will be the need to feed the machine.”

He also brought up the role of humans in an AI world, “The risk is that AI could focus too much on what has done well in the past and creates increasingly similar propositions so I think there will always be room in the process for humans and ideas that challenge established conventions.”

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Product innovation advice for those who are new to the industry

Finally, I asked about any advice the experts had to offer for those who are new to the industry. How should they think about innovating in the alcohol space? 

I got some great nuggets from each of them. Two key things stick out to me: 1) Always keep the consumer in mind and 2) remember you’re playing the long game — great innovation isn’t built in a day. 

 Nick’s advice: 

One, single moment of wisdom is super tough, given the myriad dynamics at play in the category.

For big manufacturers, back up your innovation investments in equally serious marketing investment to help new launches to fly. Short termism is often the enemy of good innovation and it does take time, or certainly longer than 12-24 months to grow a new sub-category or brand.

For small manufacturers, focus on excelling on a good quality product and then drive distribution above all else. We’ve seen all too many great new products try to play the ‘big brand’ game too soon and diversify and innovate before they’ve gained scale. The most successful break-out brands have owned their unique space, succeeded in their local market and then partnered with a bigger player to drive scale.

Tony’s advice: 

Overnight successes usually take years to build. It’s tempting to look at brands or segments that seem to explode (like the sudden growth of 0.0 beers or the rapid expansion of seltzers) – and look to do the same. The reality is that these have often been seeded for many years, or there are the 3rd or 4th generation of propositions in the space that have found the right solution that is now at the right time.

Dan’s advice: 

Don’t forget the consumer. A good launch plan, support, and keen pricing can help give something an initial boost in market, but ultimately long-term success depends on the value consumers put in the proposition. If you don’t deliver against their needs an innovation is unlikely to last. This means tasting great, but also targeting the right occasions and being present where consumers want to drink you.

Final thoughts

It’s an exciting time to be in the alcohol category! My spirits were certainly lifted after talking to each of these experts (pun absolutely intended). 

For more on creating great alcohol innovation, watch our webinar “From testing to learning How Diageo used consumer feedback to expand in Africa.”

In the webinar, Deirdre van Zyl, Diageo’s head of innovation planning and insight discuss how Diageo’s partnership with Zappi allowed them to: 

  • Optimize product concepts: Streamline feedback processes and utilize real-time insights from Zappi’s platform to refine product concepts iteratively, ensuring better alignment with market preferences.

  • Leverage what they know: Harness rapid data collection to uncover emerging consumer trends and cultural influences, informing strategic decisions for enhanced product creation and market positioning.

  • Move from testing to learning: Implement a cultural shift towards continuous learning and insights-driven decision-making within Diageo’s innovation teams, fostering sustained growth and innovation in the dynamic African market.

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