Provi, the largest online B2B marketplace for the beverage alcohol industry, has released its annual Provi Pulse report. The report highlights five major consumer trends in the B2B beverage alcohol market. It examines how they shaped bar, restaurant, and retail buyer behaviors according to Provi’s first-party marketplace data. Below are highlights from the 2022 Provi Pulse report.
Founded in 2016 and headquartered in Chicago, Provi simplifies the complex process of ordering wholesale alcohol by connecting buyers, distributors, and suppliers via its online platform. The Provi Pulse 2022 Annual Report is based on the three million-plus beverage alcohol products ordered in the United States through the Provi marketplace in 2022.
Among the trends analyzed in this year’s annual Provi Pulse report is the explosive growth of ready-to-drink (RTD) and canned cocktails, the continued rise of premiumization, the wide-ranging impact of viral craft cocktails, the rise of conscious consumption, and how the evolution of technology impacted retail buying.
According to Provi’s marketplace data, on-premise retail purchased more spirit-based RTDs (52.42%) than off-premise retail in 2022 (43.89%). On-premise retail buyers attribute shifts within the hospitality industry and consumers’ evolving interests for this upward trend. The development underscores that while initially targeted to off-premise consumers, RTD cocktails are becoming integral to on-premise operations. On-premise locations are expected to continue representing a majority of RTD sales going forward.
According to Mike Williamson, General Manager, Four Corners Hospitality:
As we bounce back from the pandemic, the hospitality industry must be incredibly mindful about how we optimize our operations, while meeting the evolving consumer demand for new and different products. Integrating ready-to-drink and canned cocktails into our bar programs enables us to serve our customers tasteful drinks efficiently, especially at high-volume bars.
The Provi marketplace data also illustrates the continuing strength of the premiumization trend for wines and spirits but also shows its impact varied across markets. For example, the average order in metropolitan areas contained higher amounts of super-premium and ultra-premium still wines, whereas the average order in rural areas contained higher percentages of value, standard, and premium still wine.
The premiumization trend was even more pronounced in the case of spirits: 62% of all purchases, in dollar terms, were directed at the top three premium tiers.
According to Provi’s sales data, the strength of the RTD market also drove consumer demand for their components. Viral cocktail trends, for example, impacted both RTD demand and retail buyers’ purchasing behaviors.
Following a trending video about the “Negroni Sbagliato,” for example, Provi noted:
Demand for the cocktail’s three main ingredients, Campari, sweet vermouth, and prosecco, saw a dramatic increase in demand on Provi’s marketplace. In October 2022, there was a 39.20% increase in the number of carts containing Campari, a 34.64% increase in the number of carts containing sweet vermouth, and an 11.70% increase in the number of carts containing prosecco.
According to Blind Barber’s Purchasing Manager, David Molina:
Any business, not just bars, should be aware of what’s trending. Providing a beverage or service that someone has seen on social media or elsewhere is a fun experience for the guest. We continue to have our ear to the ground for the next trend in the beverage world.
Not surprisingly, the report also uncovered that B2B e-commerce trends mirror consumer e-commerce trends. Data within Provi Pulse showed that online beverage ordering spiked over holidays and events. In 2022, the marketplace saw an increase in total sales in the weeks leading up to Thanksgiving by 36%, St. Patrick’s Day by 20%, Labor Day weekend by 14%, and Independence Day by 7%.
Paralleling the adoption of consumer digital ordering platforms, Provi expects that B2B online ordering will also grow dramatically “as more bars, restaurants and retail shops migrate to digital tools to streamline their operations and ordering processes.” The report noted that “the digital transformation, exacerbated by the pandemic, has impacted every tier of the bev-alc industry with no signs of slowing down.”
Per Taylor Katzman, Founder and CEO of Provi:
Over the last three years, we have seen a tremendous shift toward digital adoption across each tier. Retailers, distributors, and suppliers have unlocked online solutions to generate efficiencies within their organizations while strengthening the connection between them. As a result, the beverage alcohol industry is experiencing tremendous growth. Despite living in a post-pandemic world, we will continue to see the upward trend of e-commerce, especially in the B2B ecosystem.
Visit the Provi website to download the full report.