4 key factors driving innovation in the spirits industry

Millennials and Gen Z are increasingly driving spirits sales.

Premiumisation, convenience, generational shifts, and AI are driving change in the spirits industry, according to GlobalData.

According to Euromonitor International's Next-Gen Beverages: Bridging Affordability, Sensory, and Gen Z Preferences report, millennials and Gen Z are increasingly driving spirits sales, prioritising authenticity, innovation, and social responsibility over brand loyalty.

With Gen Z entering the workforce and gaining more income, they are becoming a key target for brands, though their diverse preferences pose challenges for marketers.

AI is also playing a growing role in the spirits industry, driving innovations in product development, packaging, and customer service.

The report noted that spirits companies with strong AI capabilities are leading the sector, as AI helps meet consumer demands for premium, convenient products whilst improving operational efficiency.

“The study highlights that premiumization is a growth catalyst in the spirits market and brand innovation is responding to this with premium ingredients, artisanal craftsmanship, and exclusive production techniques to appeal to consumers seeking luxury products," said Nisarga Save, senior consultant and beverages analyst at GlobalData.

"The convenience trend is leading to the growth of the FAB and RTD cocktail categories, which offer consumers premium, bar-quality drinks in inexpensive, pre-packaged formats, catering to socialising at home or independently," he added.