As the New Zealand liquor industry continues to rebuild after COVID-19, we asked executives to reflect on 2023 and share their insights for the year ahead.
Managing Director, Lion NZ
Anyone in business knows change is a constant. If I reflect on the more than two decades, I have spent in the beverages industry (and at Lion), I have learned that success comes from adapting to stay ahead of it.
Undoubtably the megatrend, wellbeing, is now mainstream and becoming more holistic; leaning into aspects of self-identity, community and culture, and connection to the natural world. This is driving not only the obvious categories like low carb and low sugar beverages, but consumer interest in natural ingredients, premium products, and is of course influencing our drinking culture.
Consumers are looking for balance – they want to live full lives and to make the most of the moment, which means being able to socialise and enjoy alcohol in moderation.
It was positive to see in the recently released New Zealand Annual Health Survey that hazardous drinking had reduced to the lowest level since the survey began, with a shift among 18-24 year-olds in particular. Whilst we drink around 25% less than we did in the ’80s and most Kiwis drink responsibly, hazardous drinking is still a concern and industry continues to play an important role.
Targeted initiatives such as Lion’s Alcohol&Me, which has been educating consumers for more than 10 years, and industry-funded Smashed, an in-school programme that teaches year nine students about the dangers of underage drinking and strategies to resist peer pressure, make a real difference.
I expect the cost-of-living pressure will continue in 2024 and we know it’s having a real day to day impact on consumers. Consumer research into the likely impact on our industry is instructive; Kiwis love dining out and socialising – this is something they are very reluctant to give up, but our expectations have increased, and how frequent we dine out is predicted to decline.
Consumers have also become more price sensitive – some will switch brands readily, while brand loyalists are shopping on promotion more. Cost pressures are being felt throughout the whole industry, Lion included. We have done a full review of our portfolio to get it into really good shape to meet consumer and customer needs and we continues to look at how we deliver value.
In terms of innovation, I think we’ll see greater blurring of lines between categories, reinvention of nostalgic classics, more low and no choices, and a focus on sustainability in packaging. Lion’s success of the summer, Kirin Hyoketsu (Pronounced Hyo-ket-su), is an exciting one to watch as it fast rises in popularity among a broad consumer group; it taps into current trends in a unique way, is low sugar and tastes amazing.
Lastly, we have a new Government, that is supportive of an industry which has been knocked around. With the announcement of a new Minister for Hospitality (and Tourism) and the Government’s agenda to ease the cost of living, reduce wasteful spending, and lift economic growth, this provides a positive outlook for our wider industry and the business sector overall.
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