Alcohol Consumption Up in the Home

While the recession has likely driven some people to drink, the odds are they are doing it at home these days, according to a recent study from Mintel.

Total sales of alcohol at home are expected to grow 4 percent to $78 billion this year, per the report. This is a result of consumers’ penchant for “nesting” versus spending money on entertainment outside of the home.

“There has been a shift in expenditure. There is no question where the trend is going,” said Alcohol industry consultant Arthur Shapiro. “Consumers are saying ‘hey hun instead of going out why don’t we rent a movie and have a bottle of wine.’ It shifts their expenditure to a much more affordable and manageable luxury at home.”

More than half of the respondents (52 percent) to Mintel’s earlier “Attitudes towards Dining Out—U.S.” report, conducted in January, said they were spending less at restaurants.

As a result, sales at bars and restaurants are expected to decline 2 percent this year after falling 2.7 percent in 2008. This was a steep drop considering, sales had risen 29 percent between 2003 and 2007. Mintel is forecasting a slight rebound in 2010.

Beer looks like it will fare the best compared to wine and spirits. Total 2009 beer sales are estimated to grow 3.5 percent to $38 billion. Wine sales will grow 1.3 percent to $33 billion. Spirits may take a hit. The report noted that the forecast of 5 percent growth for spirits sales by Distilled Spirits Council of the United States was overstated. Sales actually only grew 2.8%. The council said it would avoid providing typical industry forecasts for 2009.

Still, many of the top brands will try to lure consumer interest via new innovations. Coors is launching a clear beer targeting women in the United Kingdom. Japanese brewer Kuichi has created a coffee-infused beer. And, organic ingredients are continuing to become more common. TRU Organic Spirits, for example, claims to be the only sustainable spirits line in America. It uses U.S.-grown wheat infused with organic ingredients.

New products are important, said Shapiro. “The consumer isn’t closing down. They are looking for a little experimentation, but there has to be value. [What they’re willing to try] will depend on the price point.”

Nielsen Business Media