Our trends series rolls on, and this time we stopped to chat with a global leader in wine and spirits, Pernod Ricard. Missed our other trends pieces? Go back and read predictions from Technomic and get a sneak peek into Technomic's Vibe session, learn what flavors will be trending, look at the holidays and beyond, read af&co./Carbonate's Hospitality Trends Report, find out what's on the horizon for the on-premise, and read what USBG members have to say about next year.
Shining Spirits
Pernod Ricard’s brand portfolio stretches across basically every category, but there are a few that it’s predicting will be bigger than the rest next year. For one, fueled by the popularity of tequila, agave spirits will be even bigger next year.
“Agave spirits, particularly mezcal, are going to continue to be ascendant,” says Kevin Denton-Rex, head of Mixology at Pernod Ricard USA. “Mezcal is a great exploratory category that has entry level price points and astronomical price points. So there’s a lot of room for people to stretch out within the category. And there are just so many new brands making their way to the US.”
John Barrett, chief commercial officer for Pernod Ricard USA, agrees. “We’ve seen an explosion in the popularity of premium agave-based spirits, like tequila and mezcal, and it shows no signs of slowing down given its role in some of the most signature cocktails on the market right now, including a mezcal margarita and even a Negroni!”
He also sees the growth of other agave spirits, like sotol, increasing. Pernod Ricard even recently worked with Casa Lumbre and Lenny Kravitz to develop Nocheluna Sotol. “We are extremely excited to introduce sotol to new consumers who are looking for an authentic and deeply rooted spirit with a distinctive flavor profile,” says Barrett.
The popularity of tequila isn’t the only thing driving interest in agave spirits—it’s premiumization as well as consumers look to trade up. Of course, premiumization isn’t limited to agave spirits. “In our eyes, premiumization is more than a trend, but rather a cultural shift that will grow and evolve for years to come,” says Barrett. “In the face of economic pressures, consumers continue reaching for premium spirits and cocktails because they know they’re getting their money’s worth. We haven’t seen any evidence of people trading down. Instead, consumers are focused on premiumizing their experiences both off-and-on premise.”
In addition to agave spirits, American Whiskey is also seeing a rise in interest and is poised for a big 2023, especially with the likelihood of American single malt gaining an official definition from the TTB. “American whiskies, in particular bourbon and rye, will continue to be super popular,” says Denton-Rex. “It’s a similar sort of story where you have a broad base of price points and a ton of new entries into the marketplace. I think the provenance stories that mattered a lot have given way to cool urban distilleries and people talking about maturation and finishing and things that set it apart from just the ‘I was here first’ mentality.”
Cocktails & Flavors
When it comes to cocktails, there’s no doubting the supremacy of the espresso martini over the last year or two. While this caffeinated favorite isn’t going away any time soon, Denton-Rex believes there is room for a new cocktail to take hold of consumers. “The espresso martini is at mass adoption; it doesn’t mean it’s going to go anywhere, but I think there’s going to be room for something new to pop up in the next year,” he says. “I know for a fact that the 50/50 martini is across the board the favorite drink of bartenders right now.”
Made from equal parts gin and vermouth, a 50/50 martini is open to many variations. “I think there’s tons of runway and ramp for martinis to explode in the next year or two,” says Denton-Rex.
Another trend Denton-Rex sees is the increasing consumer demand for beverages with functional benefits. Just as the functional benefit of caffeine in an espresso martini helped to grow the cocktail, he predicts that other functional ingredients will start to take center stage in cocktails as well. Think CBD, adaptogens, yerba mate, etc. “All these sorts of things probably have a pretty strong chance of being the cocktail ingredients that drive future creativity,” he says.
Also driving interest and creativity in 2023 will be exploratory ingredients. Denton-Rex expects to see more ubiquity in flavors from Indian cuisine, Southeast Asia, and more. “I think the cool thing that’s coming out of the diversity of restaurants and bars is that people are able to share their identity, background, and culture through food and drink,” he says. “It’s introducing people to ingredients that maybe they’ve never had before.”
Less alcohol will also be in big demand next year as people shift their definition of a night out. “I think we’re broadening the idea of what it is to go out drinking,” says Denton-Rex. “It’s not just alcohol. People like being social, they like having a different kind of experience, and they like having a sustained experience.”
On-Premise Challenges
Despite the expected growth in the non-alc category and others, Denton-Rex does expect backlash surrounding the price of non-alc—and all—cocktails. “While inflation is making everything more expensive, people, and especially young people, aren’t necessarily making a lot more money. And bars and restaurants are working on razor-thin margins,” he says. “There is a breaking point, and I think we’re all getting to it, where you can’t just keep raising the price expecting people to pay for it.”
He offers up happy hours as a solution that may work for both sides. “I’m very curious to see what happens around happy hour and happy hour style cocktails,” he says. “There’s the big opportunity for bartenders—happy hour at non-traditional times. Or if you’re charging $22 for a drink during primetime, can you make up for some of that and subsidize some of the cost for people who are either coming early or squeaking in for that last drink of the evening?”
Denton-Rex also expects bars and restaurants to shrink down menus next year not only to help control costs, but also as a result of the labor issue, “Training is still an issue where bars and restaurants are short staffed, and they may not have people at a great skill level. Having shorter menus that are either prebatched cocktails or simple serves is already something that I see, and I think the trend will continue.”
Barrett predicts that staffing shortages will continue into next year, but he says Pernod Ricard is stepping up to help with its training and recruitment program, BarSmarts. “Created by bartenders, for bartenders, BarSmarts is an educational platform that allows bartenders—from beginners to mixologists—to level up their skillset. Additionally, the platform’s robust job board connects employers with qualified bartenders to help them pursue a career as a mixologist,” explains Barrett. “Additionally, our role is to provide support to on-premise operators to drive traffic and improve the experience for everyone with cocktail ideas and occasion-based programming. We’re also maximizing efforts across our portfolio by developing relevant selling stories that leverage consumer insights and drive more impactful and meaningful on-premise moments for consumers with our brands.”
Plan to Attend or Participate in Bar & Restaurant Expo, March 27-29, 2023
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