Future of alco-bev industry in a post-pandemic world

Originally Posted: Hotelier india

Technology will be increasingly used to gauge market demand, drive efficient manufacturing and production plans, supply chain and distribution management and market for an increasingly tech-savvy consumer base

by Saurabh Singh, Senior Vice President and Head-CPG Solutions at Polestar SolutionsPolestar Solutions

To understand the Alco-Bev market in India, one must consider that it is a deeply regulated and fragmented industry, with state government licensees, large distributors, platform chains and numerous new players in different states all eyeing for a piece of the pie. Despite the difficulty in holding these discussions, India’s annual consumption per person increased by 140 percent from 2005 to 5.7 litre in 2016. The growing urban population and the middle class’s expanding purchasing power are driving the market’s expansion, making it one of the world’s largest.

Changing Customer Demographics

With the alcoholic beverages industry set to face increasing pressure in the future, the use of technology will become important in gauging market demand, driving efficient manufacturing and production plans, supply chain and distribution management and marketing for an increasingly tech-savvy consumer base.

Innovations in carb, alcohol and fizz content have increasingly become major differentiators with a rising consumer demand for health-conscious options. Additionally, the younger generation is buying less on impulse, but they are drinking more volume when they do buy. Millennials are also more drawn to experimentation, attracted to brands that resonate shared values and are less loyal to a brand than their predecessors were, and this encourages more experimentation and innovation in the market.

Recently, we have witnessed many campaigns by famous brands as well as craft liquor brands to lure new sets of audiences and which have been pretty much successful in doing so. 0% alcohol beverages, surrogate witty ad campaigns, indigenous flavor introductions are few of them.

Brand campaigns, whether it is digital marketing or surrogate advertising, will need to become more creative, conversational and build loyalty and preference to be able to compete in a highly regulated market like India.

Covid-19 has also shifted consumer behaviour as businesses pull in direct-to-consumer spend. Further, direct-to-consumer demand has accelerated online and app ordering – these are all signs of a massive seismic shift in the beverage industry. Changing consumer preferences and increased experimentation will only fasten the pace of innovation in the overall industry.

Another emerging trend which has been driven by the ongoing pandemic is drinking-in which means that brands always must be available across the most preferred channels. To bridge this gap, brands are partnering with third party apps to have their catalogues listed and available where consumers need them. Availability and visibility have been crucial to stand out and beat the competition. Mobile apps provide access to valuable data points that can be fed into the decision system.

Technology Provides a Boost to the Drinks Sector

c is the way of the future. Right from smart manufacturing, automation, IoT-enabled solutions, big data, analytics to AI, we are witnessing the adoption of technology oriented approaches to the alco-bev industry at large. And while most of this is experimental and new, companies which adopt a technology based approach will see competitive advantages.

When it comes to investing in analytics, alco-bev companies can better understand their own path as well as industry trends. Such data can help with better data-driven decision-making, which can lead to higher efficiency, productivity, and success and growth. Investing in big data and analytics can help ensure consistency across products, improve insights across supply chains, optimize production of drinks, etc.

For example, when we look at the beverage giant, Coca-Cola, it leverages data analytics to ensure that its orange juice has the same taste throughout the year. It does this by using data on crop yields, satellite images, weather data, etc. before identifying the best combination of juice for its consumers.

Analytics can help in understanding the content that resonates with their target audience which would subsequently help in capturing mindshare and improving organic reach over time. In the end, it’s all about building relationships with the customers to excel in the market.

Technology and digitization are opening up opportunities for companies to establish relationships with their consumers in a new light, all powered by data which will only continue to disrupt the industry further. Technology is further also helping liquor companies recover faster since the onset of the pandemic.

Going forward, the industry will have to be mindful of the key drivers and trends shaping the industry, including changing consumer demographics, and the importance of leveraging technology and analytics to effectively capitalize on this trend.