TREND FORECASTING
CHARTING A PATH Forward YOUR ROAD MAP TO 2021 INDUSTRY PREDICTIONS.
Photo: Shutterstock.com/ Andreas Prott.
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ince mid-March 2020, the entire country has been wondering what comes next and when we’ll pivot from the current environment of uncertainty to one more akin to our “normal” routines. International consulting firm Kearney has also been asking these questions about the beverage alcohol industry, which can be difficult to answer since there is no precedent for the current situation in modern times—the last time the world dealt with anything like this pandemic was back in 1918. Since traditional “look back” forecasting techniques would be ineffective for trying to predict what comes next, Kearney turned to scenario-based forecasting around possible futures the on- and off-premise markets could be moving towards. The two driving, macro factors Kearney considered to have the most influence on
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BY ASHLEY BRAY shaping these possible futures were the timing of economic recovery and the effectiveness of the COVID-19 vaccine. From there, Kearney used a fourpronged approach to forecast the possible scenarios. First, they applied their proprietary predictive analytics methodology, Janus®, to forecast future performance and define shape of demand. To provide a consolidated industry point of view, they incorporated 30-plus explanatory variables from publicly available sources and leveraged data from SipSource, which was created by the Wine & Spirits Wholesalers of America (WSWA). SipSource is the first and only source for wine and spirits distributor depletion data, which is made available by WSWA members. Kearney also surveyed over 1000 consumers and conducted interviews with leading industry experts. Finally, they leveraged AI and
predictive analytics through a scenariobased approach to evaluate plausible future markets for the US wine and spirits industry in 2021. As a result of all of this research, Kearney came up with four possible scenarios for 2021, which were presented in a webinar hosted by WSWA titled “Consumer Resilience in Alcohol: 2021 Wine & Spirits Forecast.” 1. CHAMPAGNE POPPIN’ RECOVERY The best-case scenario, this prediction sees both a strong economic recovery and high effectiveness of the vaccine for continued growth in the off-premise market and recovery in the on-premise. 2. COVID HANGOVER This scenario is the result of high vaccine effectiveness but weak economic recovery. This leads to continued growth for the off-premise but declines for the on-premise as restrictions are Spring 2021
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