The ripple effect of Covid-19 reverberated across the beverage world in 2020, shifting perceptions of “normal” across all three tiers of the American alcoholic beverage industry. Even amidst the ongoing impact of tariffs on some beverage alcohol products, Covid-19 shuttered restaurants and bars, and e-commerce boomed as brands and retailers transitioned their sales and distribution methods.

While 2020 has taught us that nothing is entirely predictable, the Drizly team expects 2021 to result in a continuance of many pandemic-induced trends and behaviors even as daily life slowly begins to normalize. “The most significant difference in e-commerce for 2020 was simply the increase of consumer awareness as to the ability to purchase alcohol online, says Cory Rellas, the CEO of Drizly. “While we are all excited for the return of on-premise, we believe the e-commerce landscape has fundamentally changed in how consumers will discover and shop the BevAlc category.”

From connecting the industry through technology to increasing brand value consciousness, these are our top predictions for beverage alcohol in 2021.

Pandemic Trends Will Persist

The pandemic served to introduce new beverage alcohol trends in 2020 and accelerate others, and while Americans eagerly anticipate a normalization of everyday life in 2021, don’t expect these trends to disappear. Retailers should expect the fastest-growing categories of 2020 — including RTD cocktails, triple sec and citrus liqueurs, bitters, and hard kombucha — to remain strong in 2021.

Take at-home bartending, for example. We expect customers who learned how to make the perfect margarita or whiskey sour in 2020 will continue to stock their bar carts with ingredients for those cocktails,” says Rellas. Now that consumers have become comfortable with making cocktails at home and realize the cost-effectiveness relative to going to a bar, the process will likely become part of their regular routine.

At the same time, safety concerns will persist even as vaccinations help to lessen the threat of Covid-19, which will continue to boost the value of single-serve drinks like RTDs and hard seltzers. “Those who discovered new RTD and hard seltzer brands like High Noon and Cutwater will continue to reach for those through 2021,” says Rellas, “particularly as safety concerns and convenience values persist.”

Technology Will Transform and Connect the Industry

In 2020, Drizly more than doubled its number of online retailers, and data indicates growth will continue as the U.S. continues to battle Covid-19. With traditional shopping venues closed or severely limiting capacity, online sales are poised to continue playing a key role throughout 2021. 

“In 2020, ecommerce and general technology adoption went from a progressive strategy to a business necessity,” says Rellas, who notes the company’s number of retail partners now exceed 4,000 participating retailers. 

This trend will likely accelerate in 2021 as new stay-at-home orders and closures are put into place throughout the winter, and even as conditions begin to normalize as the year goes on, this shift to e-commerce won’t disappear. Now that consumers have been introduced to the accessibility and convenience of purchasing alcohol online, they are likely to continue turning to online retail partners as regular beverage sources.

It won’t just be the retail sector embracing technology within the beverage alcohol industry in 2021, either; both suppliers and distributors have begun to embrace online sales as a result of changing consumer purchasing behavior, and we anticipate that technology will play an even bigger role in connecting the industry’s three tiers this year. 

“More brands and distributors are recognizing the importance of using e-commerce channels to connect with partners across the three tiers and to connect directly to consumers,” says Rellas. Startup companies in the wholesale space like LibDib and SevenFifty, for example, are building technology to more closely connect suppliers with retailers, and many producers are investing heavily in technology to improve direct-to-consumer relationships and sales volumes.

Mexican Spirits Will Solidify Their Position

Once defined by holidays like Cinco de Mayo, Mexican spirits — particularly tequila and mezcal — have hit the mainstream, and data suggests that premium brands are poised to boost this category’s upward trajectory. “In recent years, tequila has become a breakout in the liquor category as consumer perception of the drink has shifted from occasion-based to a versatile everyday spirit,” says Rellas. 

The onset of the at-home cocktail trend, combined with the widespread popularity of classic cocktails like margaritas, led tequila to skyrocket in 2020, with share of liquor sales up 22 percent over 2019. Two tequila brands — Casamigos Blanco and Espolòn Blanco — ranked among Drizly’s top 10 best-selling liquor SKUs in 2020. At the same time, mezcal has experienced massive gains on Drizly, with share of liquor sales up 57 percent year-over-year in 2020.

In 2021, we expect this trend to accelerate as consumers continue to explore these categories and trade up on their tequila and mezcal choices. Early data indicates that consumers will explore more sub-categories of tequila, like añejo and reposado, and premium sipping tequilas will compete more closely with their whiskey counterparts.

Sales Will Reflect a Divergence in Price Point Trends

Though vaccines are signaling a potential return to normalcy in 2021, the year will also bring a continuance of economic uncertainty and shifting political tides — all factors that will impact consumer spending on beverage alcohol. In all likelihood, some premiumization will occur even as value brands become more important than years prior.

Despite economic uncertainty, early in the pandemic, Drizly saw an accelerating premiumization trend as consumers reallocated funds normally spend on experiences towards at-home indulgences. “With travel, on-premise dining, concerts, and other areas for consumption shut down,” says Rellas, “many customers realized they could purchase more premium products at cheaper prices relative to on-premise.”

However, as the economic difficulties persist into 2021, this trend is likely to diverge: Premium growth will still occur, but it may be accompanied by growth in high-value brands as many Americans limit spending and shift their buying habits to lower-priced, value-driven wine, beer, and spirits brands.

“In 2021, there is a question of whether the premiumization trend will persist, or consumers will shift towards a focus on value,” says Rellas. “The reality will likely be a combination of both. Depending on their target audience and customer base, retailers should be utilizing local data to understand consumer trends and what that means for ideal selection and pricing on their shelves.”

Consumers Will Be More Conscious of Brand Values

2020 somewhat signaled the end of corporate neutrality in America, as protests rose up in cities from coast to coast, invigorating American consumers. “Beyond the impact of Covid-19 on the world, 2020 was also a transformational year in terms of social justice and the fight for equality,” says Rellas. “From the Black Lives Matter movement to awareness about immigration and women’s rights, the year had many businesses and consumers increasing consciousness of the impact of their decisions on minority groups. Businesses must lead from the front.”

In the weeks after George Floyd’s murder in May, Drizly consumers actively sought to purchase and support Black-owned drinks brands; McBride Sisters Collection, for example, was the second-fastest growing wine brand on Drizly in 2020. Consumer consciousness for the values of the brands and establishments they frequent will continue to be a focus in 2021, and we expect that individual businesses will be increasingly transparent about their own values in response.

“Drizly has a responsibility to connect brands’ and retailers’ stories with customers to help make informed and conscious decisions when shopping on the platform, and we will continue to improve how we do so in 2021” says Rellas.