How Consumer Insights are Driving Constellation Brands’ Approach to Moderated Moderation

At Constellation Brands, consumer-led decision-making drives every aspect of the business. Trends indicate that the majority of U.S. adults are actively seeking opportunities to incorporate more moderation-focused products such as lower calorie, lower carbohydrate, and lower alcohol options.

Rather than harsh restrictions, Americans seek a balance of moderated consumption across different aspects of their lives, and this betterment trend has been steadily growing. For example, the Betterment Wine & Spirits segment is projected to reach $7 billion by 2028, and the segment grew over 50 percent from 2019 to 2022₁.

To gain deeper insight into the evolving consumer mindset across total beverage alcohol, we recently met with two leaders from our Growth Organization – Michelle Christensen, VP of Consumer Foresight & Innovation Insights, and Andrew Zrike, SVP of Innovation & Consumer Insights. The pair provided their perspectives on aligning emerging trends and data-driven insights with our evolving portfolio, including the recent launches of Corona Non-Alcoholic and Modelo Oro.

Let’s start with a few questions for you, Michelle. As you keep a pulse on evolving consumer expectations, what trends are you seeing as consumers reach for brands with lower calories and alcohol by volume (ABV)?

Michelle: We're seeing a significant shift within the broader drinking population, with more legal drinking age (LDA) individuals opting to moderate their alcohol intake on certain occasions. Examples include not drinking on weeknights, or even within a single occasion by setting pre-determined limits, bedtimes, or substituting one drink with an alternative. This trend is gaining momentum and is relevant to approximately 75 million consumers₂.

Why are consumers shifting their consumption behaviors?

Michelle: The motivations behind this shift vary, ranging from managing mood, sleep, and weight to overall well-being in a chaotic world. This is a broader movement versus something limited to only one consumer group, so there is an opportunity for our brands to tap into the needs and functionality of people seeking a moderated lifestyle.

How is Constellation tracking these moderation trends?

Michelle: Constellation has a broad ecosystem in place to track these types of trends and others. We analyze consumption per capita, monitor social conversations, and immerse ourselves with consumers and product launches in adjacent categories to gain insights into the "why behind the why."

We utilize a "STEEP" model to scrape trends across various factors of human life, including social, technological, economic, environmental, and political factors. These areas are shaping attitudes and behaviors in the beverage alcohol industry and inform our approach to innovation and portfolio building.

Now a few questions for you, Andrew. In response to the trend of “moderated moderation,” what are some recent innovations across Constellation’s product portfolio that meet this demand?

Andrew: At Constellation Brands, we strongly believe in the power of smart, consumer-driven innovation to achieve significant and lasting growth for our business. Our approach to pursuing new opportunities and product innovation is to stay focused on the consumer. This includes meeting the consumer demand for "moderated moderation," recognizing that this trend can be addressed through a wide range of product types and formats.

Can you name some specific brand and product examples that meet this consumer demand?

Andrew: Recently, we introduced Corona Non-Alcoholic, leveraging the expertise of our R&D and brewing team in Mexico to deliver the crisp and refreshing taste of Corona in a non-alcoholic brew. The launch has received positive responses from both Corona Extra loyalists and consumers who prefer lighter brands and non-alcoholic brews.

The strength of the Corona brand family exemplifies how consumers can moderate with different beers from the same brand, sometimes within a single occasion. They might start their evening with a Corona Extra and conclude with the new Corona Non-Alcoholic, without needing to switch to a different brand.

Additionally, we launched Modelo Oro, a time-crafted sessionable cerveza that seals in Modelo's golden flavor. We set out to deliver an exceptionally smooth, elevated light beer with a crisp clean finish, with only 90 calories and 3G of carbs. 

How do these innovations fit into the overall portfolio and complement other Constellation Brands product offerings?

Andrew: These recent additions from our Beer Division complement our existing Wine & Spirits and Ventures products, offering more moderation-focused choices throughout our portfolio to suit different preferences and occasions.

In our Wine & Spirits portfolio, we also offer innovative options that allow consumers to enjoy their favorite brands while moderating consumption. Meiomi Bright and Kim Crawford Illuminate, for example, provide lower calorie and lower ABV alternatives to their popular mainstream SKUs.

Our ventures investments in non-alcoholic brands like HOP WTR (infused with adaptogens and nootropics) and Karma Water (enhanced with nutrients) provide consumers with additional options that offer added benefits. Our latest investment with TÖST focuses on flavor and offers a sophisticated non-alcoholic choice for all occasions.

Compared to our closest competitors, we are the only company driving substantial growth across our core and innovation segments. Our innovation items outperform the market by nearly double.

One final question for you both to close. As you reflect on the increasing themes of betterment and moderation, what will consumers want next? What will be trending 1, 3, 5 years from now?

Andrew: I think consumers will continue to look for products that are clearly positioned so that they can make informed decisions and choose between products that are more indulgent and ones that are targeted toward the betterment orientated consumer, sometimes within the same occasion. For this reason, I am excited about the potential for our team to continue to find ways to empower consumers to curate their beverage experiences according to their specific and evolving needs.

Michelle: As technology evolves and consumer attention spans decrease, capturing interest, driving choice, and maintaining loyalty become more challenging. I anticipate consumers will expect companies to bridge elements of the digital and physical worlds, delivering novel sensory experiences that align with their growing interests in betterment and moderation. It is no longer enough to deliver a great product – people crave a true experience.

We also know that individuals are constantly evolving in terms of their identities and manners of self-expression, and they want the brands they support to adapt accordingly. To develop authentic connections with people and maintain a space within their consideration set, we must remain agile and meet them in the moment.

Sources:

1 According to IRI BFY Analysis

2 According to custom research from MotivBase (2022)