Premium beverages 2026 summary: why consumers are embracing them
- Consumers embrace premium beverages as affordable luxuries amid cost living pressures
- Lipstick effect drives premiumisation as shoppers seek quality experiences
- Luxury hot chocolate grows replacing caffeine with indulgent evening social rituals
- Hot chocolate market grows 5.4 percent CAGR from 2024
- Celebrity backed spirits benefit from consumer interest in celebrity lifestyles
Premium beverages are going from strength to strength in 2026. From luxury hot chocolate to celebrity-backed spirits, beverages that offer consumers a little bit of quality are flourishing even in a tough economic climate.
Consumers want affordable luxuries in the face of cost-of-living strain
Premium is seeing popularity in spite, or even because of, cost-of-living woes among consumers.
In an economic downturn, people will often gravitate to affordable luxuries, says Emily Keogh, founder and managing director of Palm PR. This ‘lipstick effect’ is driving more consumers towards premium beverages.
Consumers want products which they can have greater appreciation for. They are “savouring and connecting with the story, with the artisanship, and with the moment”, says Keogh.
In spirits, for example, would often drink “mindlessly, to get drunk”, whereas now many people are looking for a “carefully savoured sipping spirit”, something where the quality is what matters the most.
This story is not the same everywhere. For instance, preference for premium beverages in developing markets, such as India, South Africa, Southeast Asia and Latin America, is driven by expanding middle classes and increased urbanisation, according to analytics platform IWSR.
The growth of ‘luxury hot chocolate culture’
In particular, the popularity of luxury hot chocolate has remained strong. Analytics platform DataM Intelligence predicts that the hot chocolate market will experience strong growth, with a CAGR of 5.4% between 2024 and 2031.
Not only does it provide consumers with an affordable luxury, it gives them an alternative to caffeinated hot drinks such as tea and coffee.
While the popularity of hot chocolate is similar to coffee, in that consumers have preferences in regard to factors such as origin, it also represents a move away from caffeine.
“There’s a shift away from drinking caffeine,” says Keogh. Consumers are often already in a ‘highly wired state’ due to the prevalence of technology in their everyday lives, and don’t want to contribute to this further.
Cafes selling hot chocolate are often open until late at night, attracting a Gen Z audience who are looking for a substitute for ‘the big night out’.
How has hot chocolate thrived in such a difficult environment, with high cocoa prices leading to price spikes and substitutions within chocolate?
“Premium hot chocolate brands are better positioned to navigate that market”, says Keogh. “They are closer to the cocoa farms. They’re looking at long-term, traceable relationships rather than spot purchasing (buying on the spot). A lot of the time they’re really bound up in an idea of quality sourcing.”
Some cocoa brands, such as Islands Cocoa, even own their own cocoa farms, making it easier to source beans.
Celebrities still dominate luxury spirits
Premiumisation in spirits has been growing for a long time. Research from analytics platform GlobalData in late 2024 already showed consumers adopting a ‘drink less but drink better’ outlook in their consumption.
Luxury spirits continue to be dominated by celebrities, from Dr Dre and Snoop Dogg’s Still Gin to Bryan Cranston and Aaron Paul’s Dos Hombres Mezcal. The dominance of celebrity beverages has even made it difficult for smaller brands to succeed.
As this trend has grown, another, much older trend has declined: drinking itself.
“On a macro level, we’re looking at a backdrop of people drinking less”, says Keogh, “and so every purchase has to be more engaged and more mindful. The rise of celebrity endorsed, backed or owned spirits has come about because people need to feel that they’re buying into a lifestyle, and not just choosing a brand from a selection off a shelf.”
As celebrities get more and more involved in the marketing and management of their drinks brands, consumers associate these drinks more and more with the lifestyle represented by the celebrity in question.
In short, premium is popular because consumers want a small piece of luxury whilst they are struggling. Premium beverages provide an affordable way to get this.
