Basis Technologies’ Research & Insights team has released their vertical knowledge brief on Alcohol and Cannabis. As you recall, VKBs are a proactive deliverable we send monthly, and usually provide a deep dive analysis into Basis’ top verticals to highlight current trends, paid media implications, and top audiences driving growth.
Highlights include:
Industry:
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- Alcohol revenue will grow to reach over $300 billion in 2024, and cannabis industry revenue will reach $42 billion in the same year; both industries are growing steadily in the U.S.. During the pandemic, consumers’ alcohol consumption habits were forced to evolve, and at-home drinking become the new norm. Since then, the out-of-home drinking sector has recovered but consumers’ preferences have shifted toward at-home drinking. The current state of the economy also deters some from non-essential spending.
- While the majority of the U.S. population drinks, 38% choose not to partake for various reasons. Consumers have grown increasingly health-conscious. and some are curious about a sober lifestyle. Because of this, many alcohol brands have created non-alcoholic beverages, mocktails, or low-calorie options to engage with all types of drinkers. Spirits have grown in popularity in recent years, with tequila, mezcal and American whiskey being the fastest growing sectors.
- While overall alcohol consumption is trending downward, the opposite is happening for cannabis. As legalization grows in the U.S., more consumers can consume cannabis safely. However, consumers have varying views on its legalization and how it affects their communities. Of those who consume cannabis, most partake at least once a month. Consumers are motivated to visit a dispensary when it is convenient to where they are located, there are friendly staff members, product variety, and deals and promotions.
Paid Media:
- The alcohol industry is a high spending sector with an investment reaching nearly $2 billion for the year between April 2023 and April 2024. The industry generally skews toward traditional channels; however, digital investment in some channels has grown year-over-year. Spend from this time period was slightly lower than the year prior. A sample of cannabis brands spent nearly $12 million over the same period, with most ad investment being traditional.
- The beer and ale sector makes up the largest portion of alcohol ad spend, with top advertisers including large brands like Modelo, Budweiser, Michelob, Corona, and Heineken. These advertisers utilize a mix of digital and traditional channels, investing most heavily in TV. Spirits and wine were the only sectors to have the most equal traditional and digital ad spend.
- Creative messaging among the top alcohol advertisers fit into consistent themes. Cannabis ads emphasize quality of products, proximity of a dispensary and try to educate consumers on the industry.
Audiences:
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- All of these audience segments generally fall between 21-64, with some outliers and many have children. Drinkers and Spirits Drinkers tend to skew white with a higher HHI. Non-Drinkers, and all cannabis segments analyzed include all races and ethnicities. All these consumer segments spend time online and are influenced by what they see on social media.
- Drinkers and Spirits Drinkers enjoy drinking both at home and out-of-home but are interested in cocktail recipes and fun ideas for entertaining. These audience segments are generally loyal to the brands they already know they like. However, new and innovative product offerings could spark their interest. Non-Drinkers tend to be a bit more price-conscious but enjoy the availability of products like N/A beers. All cannabis segments are supportive of the overall industry and try to support dispensaries and brands in their local communities.
- All of audience segments spend at least 29 hours a week online, and brands have an opportunity to connect with them through digital channels. Looking to the future, brands should establish a stronger online presence to capture the attention of these audience segments that continue to grow in the space. Brands will need to consider leveraging emerging media channels to stay relevant.
Other helpful vertical materials included here:
https://basis.com/blog/cookieless-advertising-for-cannabis-marketers
