Union’s 2024 Forecast: Agave Spirits Rise as Millennials Embrace Premium, Non-Alcoholic Options
Union, a leading hospitality engagement platform, has meticulously examined data from over 1,000 bars and restaurants throughout the United States. This extensive analysis aims to forecast pivotal trends in the on-trade sector for 2024.
The study revealed that agave-based spirits are poised to challenge vodka’s dominance in the on-trade spirits sales. Notably, tequila and mezcal have diminished vodka and whisky consumption by 13% and 14%, respectively, as of 31 October 2023. Mezcal, in particular, has surged by 20% in the same period, emerging as the fastest-growing subcategory in agave spirits.
Currently, tequila and mezcal account for a significant 29.4% of on-premise spirit sales, marking a 2% increase in the 12 months leading up to October 2023. In comparison, vodka’s market lead has slightly declined to 30.5%, experiencing a 2.8% decrease.
IWSR Drinks Market Analysis had previously projected tequila to surpass vodka in 2023 as the most valuable category. In line with this, the Margarita reigns as the top-selling cocktail at Union venues, substantially boosting tequila sales.
Moreover, Union anticipates the Espresso Martini to surpass the Old Fashioned, currently its second most popular cocktail. The Espresso Martini has witnessed a remarkable 53% growth, placing it as the second fastest-growing and third best-selling cocktail. Notably, the Blue Hawaiian, featuring rum, blue curaçao, and coconut cream, has leapt ten places, becoming the quickest growing cocktail at Union venues.
Union’s data also highlights a surge in vodka-based ready-to-drink (RTD) variants, with spirit-based RTDs expected to see significant growth this year. Interestingly, vodka-based High Noon has replaced malt-based White Claw as the top-selling RTD, capturing a 75% share of spirit-based RTDs at Union venues.
Despite a decline in hard seltzers’ market share, High Noon faces stiff competition from Nütrl, another vodka-based RTD, now the third top-selling RTD in the on-trade.
Union also underscored the remarkable rise in non-alcoholic ‘spirits’, a niche yet rapidly growing sector. Sales of these alternatives have skyrocketed by 50% year over year, although their market share remains below 1% in Union’s venues. CleanCo, offering booze-free options for tequila, vodka, gin, and rum, leads this category at Union venues.
Contrary to some reports suggesting a slowdown in premiumisation, Union’s data indicates a continual upscale trend in the on-trade. The proportion of drinks priced at $15 or more nearly doubled at Union venues in the past two years. Despite inflation, Union anticipates a sustained preference for premium beverages.
Lastly, Union’s analysis predicts a notable upswing in imported beers, with Mexican and Irish varieties expected to excel in 2024.
Layne Cox, Union’s Chief Marketing Officer, comments on these trends: “Our ongoing analysis of on-premise data is vital to understanding market shifts. Despite global metrics indicating a slow-down in spirits premiumisation, our data consistently shows growth in premium-priced drinks, a trend we foresee continuing. With Millennials and Gen Z increasingly favoring non-alcoholic options, we’re keen to observe the evolving demand for spirit-based non-alcoholic beverages in the coming year.”
