At the start of 2021, there was plenty of optimism to go around about beverage alcohol purchasing for the upcoming holiday season. With vaccines on the way, it appeared likely that the October/November/December (OND) period would see the return of big holiday gatherings, corporate parties, and other celebrations. However, concerns about the Delta variant and renewed pandemic restrictions in some markets are introducing a note of uncertainty about consumer behaviors for Q4 2021. 

Along with analyzing Drizly data, BevAlc Insights spoke with retailers, importers, and brand leaders to glean their top predictions and forecasts for the holiday season — and gain insights into how retailers can prepare for the rush. 

Celebrations Will Be Mixed

In Drizly’s 2021 consumer survey, conducted in June, less than half of respondents said they plan to celebrate the holidays the same way they did in 2019. The majority said their holiday gatherings will resemble those of 2020.

“We’re going to see a mix of pre-pandemic and during-pandemic behaviors, with gathering types ranging from smaller or even virtual events to bigger celebrations,” says Liz Paquette, Drizly’s head of consumer insights. “I think the mantra for this coming OND is the same as it has been for this past year — prepare for the unexpected and pivot as necessary.”

Jason Gold, the owner of Gold’s Wine and Spirits in Rhode Island, is already seeing a trend toward larger gathering sizes and expects consumers to host more at-home events this OND. “People feel that they were deprived of that last year,” he says.

Gifting Will Continue to Go Online

Online gifting has seen significant growth on Drizly, with share surging from nine percent in December 2019 to 20 percent in December 2020. 

The average unit value for gift orders is about 72 percent higher than the standard order, and most gifts are sent by buyers who live outside of the store’s local market. “This is an awesome opportunity to drive valuable sales online,” says Paquette. It also gives retailers a chance to acquire new customers that wouldn’t normally shop in their stores as well as introduces them to new local shoppers.

Jonathan Kerkian, the owner of Corkscrew Johnny’s in Richfield, Ohio, expects to see a spike in gifting this OND compared to flat overall sales. “There was still a significant amount of at-home consumption going on at this time in 2020,” he says, “so I expect that will happen less in a more normal 2021, and more of consumers’ income will be allocated to giving gifts.”

Peter Willcock, the senior vice president of brand development for Palm Bay International, sees particular potential for gift sets. With both consumers and retailers recognizing the value-add of such offerings, he says, “Gift sets need to be intelligently conceived by marketers to ensure these solutions deliver above and beyond the regular package.”  

Tequila and Whiskey Will Be Stars 

Tequila accounts for approximately 25 percent of the overall liquor category on Drizly and is likely to continue gaining share. Led by growth in the reposado and añejo categories, tequila’s average unit price has increased 23 percent over 2020. 

“Our consumers like to enjoy tequila during celebratory moments,” says Lander Otegui, the senior vice president of marketing at Proximo Spirits. “This is especially true during the holidays, a time when many are willing to spend more on premium offerings.” 

The company is responding by introducing new high-end products, such as Jose Cuervo Tradicional Añejo, aged in whiskey barrels, and the small-batch Reserva de la Familia Reposado. 

In the whiskey category, bourbon’s share has remained flat year-over-year while smaller categories such as Scotch, Japanese whisky, and rye have seen significant gains in 2021. “These are going to be ones to watch this holiday season,” says Paquette. “Whiskey is our usual dominator for the holiday season and we’re expecting it to continue to hold strong.”

Combined with whiskey, the tequila category currently accounts for a 35 percent share of gift orders on Drizly.

While it can be difficult for retailers to get sought-after tequila and whiskey products, says Gold, stores can attract holiday business through barrel aging programs. “We don’t have 50 cases of Don Julio 1942 sitting around,” he says, “but I do have bottles of Corazon done in Blanton’s barrels that are unique from anything else that’s out there.”

RTDs Will Be a Holiday Thing

In August 2021, hard seltzer’s sales share on Drizly declined 12 percent year-over-year while share for spirits-based, ready-to-drink (RTD) cocktails grew 85 percent. 

“RTDs have been a category to watch this year, and we expect this to persist through the holiday season,” says Paquette. “Cocktail-making has been a big trend over the pandemic, but OND is typically a big time of year for making cocktails at home. With the greater innovation in this category, diversification in the types of cocktails being offered, and the quality in his format, this could potentially be seen as a replacement for consumers for some secondary cocktail ingredients.”

Customers Will Splurge on Champagne 

The Champagne category saw a huge spike in 2021 and is currently sitting at No. 3 among Drizly’s top wine categories. Growth was largely driven by premiumization and gifting. The average unit price to date has increased approximately 24 percent year-over-year and gift orders account for 53 percent of Champagne sales in 2021 compared to 40 percent in 2020. 

“Off-premise holiday sales for Champagne will be very strong this year, there is no doubt about it,” says Xavier Barlier, the senior vice president of marketing and communications at Maisons Marques & Domaines USA. “People will celebrate in their homes or at the homes of their friends, and in the U.S., Champagne is the wine for celebration.”

Barlier expects to see a sales increase this holiday season over the same period in 2020, with luxury products such as Cristal, Dom Perignon, and Krug in demand. He also forecasts that non-vintage sparkling wines, vintage Champagnes, and grower Champagnes will do well this OND. 

“The more frustrated we get with Covid and Delta, and the more we want to compensate,” he says. “I think this year we’re going to splurge.”

However, as supply shortages continue for many of the category’s most popular brands, retailers may face challenges in meeting demand. 

“I try to taste as many things as I can and stock things that I like,” says Gold. “If people can’t find Veuve or Moët, they will move to something else. We’re seeing a lot more esoteric things getting sold in person and online.”

Kerkian is also looking to fill the gap. “Veuve Clicquot, Moët & Chandon, and Dom have all been extremely hard to come by this year,” he says, “so it will be interesting to see where customers go if these continue to be unavailable.” He predicts that shoppers will go for a combination of lesser-known brands and domestic sparkling wines, along with premium white wines getting a boost. 

“We’re keeping an eye out for those popular Champagne brands,” he says, “and if any come back in stock on the regular, we are going to jump on whatever we can get.”