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In-home Drinking - UK - July 2009

This is the first time that Mintel has produced a separate report looking at the market for, and developments in, in-home drinking. In-home drinking has been rising in popularity in the UK for some time and the current recession is likely to increase its share of the total drinks market as consumers try to save money by drinking out less.

In-home drinking has been driven for many years by the rising popularity of wine – yet this engine for change in the drinks industry is now running out of steam. More recently, the market is increasingly reliant on drinks like cider, vodka to drive it forwards.

Drawing on a comprehensive range of information sources, this report offers:

  • An investigation into the internal and broader macroeconomic factors impacting on the market, including changing social and demographic trends.

  • An overview of the market’s competitive context.

  • An examination of recent and projected market growth.

  • An overview of general consumer in-home drinking activity.

Key themes

  • Since the start of the recession, there has been a further migration of drinkers to the in-home market. Which consumer groups have led this migration and why have they migrated?

  • The recession is having a significant impact on the drinks market as a whole, but how is it affecting the in-home drinking market in particular?

  • Counter to logic, in many drinks categories, it is the budget end of the market that has fared worse than the mainstream or premium ends – why is this?

  • How can consumers be targeted in a recession and in the post-recession environment?

Please note that data may not match those published in other Mintel drinks reports due to differing definitions between Mintel and National Statistics categories.

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Table of contents

  1. Issues in the Market

      • Key themes
        • Definition
          • Abbreviations
          • Future Opportunities

            • Fulfilment is closer to home
              • Implications
                • The stress society
                  • Implications
                    • Offers versus premiumisation: Can we square the circle?
                      • Implications
                      • Market in Brief

                        • The shine comes off the market
                          • Figure 1: UK total household expenditure on in-home alcoholic drinks*, 1998-2009
                        • The impact of the recession is strictly limited
                          • Figure 2: How consumers have adjusted in the past year to the recession and cost pressures, April 2009
                        • The recession is changing market segmentation
                          • Figure 3: UK household expenditure on in-home alcoholic drinks, by sector, at constant 2003 prices, 2005-09
                        • Brands come out on top
                          • New market drivers
                              • Figure 4: Target groups based on how alcoholic drink consumption has changed in the past 12 months, April 2009
                            • The on-trade/off-trade trade-off
                              • Figure 5: Segmentation of alcohol drinkers/buyers by switching strategy, April 2009
                          • Background: Factors Driving the Rise of In-home Drinking

                            • Key points
                              • A question of economics
                                • Figure 6: The price deflator for off-trade alcoholic drinks and all consumer items, (2003-100), 2000 Q1-2008 Q4
                              • Legislation favours in-home drinking…
                                • The smoking ban
                                  • Drink driving legislation
                                    • Increased alcoholic drink taxes
                                      • But could that be about to change?
                                        • An ageing population means more drinking at home
                                          • Figure 7: Population breakdown (% of consumers), by age, of in-home drinking, 2004-08
                                        • The older population are more valuable to the market
                                          • Figure 8: Most valuable consumers for take home sales of alcohol, (VII) by age, 2006-08
                                          • Figure 9: Total population change, by age, 2004, 2009 and 2014
                                        • Retro chic back in vogue
                                          • Pre-loading helps drive in-home drinking
                                            • The impact of crime?
                                              • The rise in ABC1s
                                                • Figure 10: Changes in social grade amongst the UK adult population, 2004-09 and 2009-14
                                              • The rise of online purchasers
                                              • The Impact of the Recession on In-Home Drinking

                                                • Key points
                                                  • Lessons for the past point to…
                                                      • Figure 11: Annualised growth in real alcoholic drinks spend for in-home drinking compared to total real household expenditure, 1984 Q1-2008 Q4
                                                    • What might happen today
                                                      • Figure 12: Share of total household expenditure taken, by alcohol for drinking in-home (real terms), 1984 Q1-2008 Q4
                                                    • But even in a recession some of life’s luxuries are “essential”
                                                      • But some trading down is inevitable
                                                        • And the supermarkets are prospering
                                                          • But most adults plod along as normal
                                                            • Figure 13: How the amount of drinking in-home has changed in the last 12 months, April 2009
                                                          • Older adults more likely to cut down on drinking at home
                                                            • Figure 14: Net percentage increase* of adults who have increased their home drinking in the past year, by age, April 2009
                                                          • Poorer adults feeling the pinch but…
                                                            • Figure 15: Net increase* in adults whohave increased their in-home drinking in the past year, by socio-economic group, ACORN group and tenure, April 2009
                                                          • Is in-home drinking a stress-buster for some?
                                                            • Young families and couples cut back
                                                              • Figure 16: Net increase* in adults who have cut down on in-home drinking in the past year, by detailed lifestage, April 2009
                                                            • Out-of-home drinking feels the pinch more than in-home
                                                              • Figure 17: Items being cut back on in the recession, February 2009
                                                            • And some switching in evidence
                                                              • Figure 18: Consumer switching behaviour between drinking at home and drinking out of home, April 2009
                                                            • But is the wine drinker feeling the pinch the most?
                                                              • Figure 19: Annualised rate of growth in consumer spending on alcohol for in-home drinking, by type, Q1 2005 to Q4 2008
                                                            • Bottom end of market hit most by the recession
                                                              • Figure 20: The impact of the recession on drinking patterns, April 2009
                                                              • Figure 21: Penetration of wine and fortified wine, by socio-economic group, 2008
                                                              • Figure 22: Penetration of beer and cider, by socio-economic group, 2008
                                                            • Pre-mixed spirits and vodka keep their customer bases
                                                              • Figure 23: Penetration of spirits and other alcoholic drinks, by socio-economic group, 2008
                                                          • Market Size

                                                            • Key points
                                                              • In-home spending under pressure
                                                                • Figure 24: UK total household expenditure on in-home alcoholic drinks*, 1998-2009
                                                                • Figure 25: Spending per household on in-home drinks (£ per household in the uk at current prices), 1999-2009
                                                              • The advance of wine, cider and perry halted
                                                                • Figure 26: UK household expenditure on wine, cider and perry for in-home drinking*, 1998-2009
                                                                • Figure 27: UK household expenditure on wine, cider and perry for in-home drinking* and share of total in-home spending, 1998-2009
                                                                • Figure 28: UK household expenditure on wine, cider and perry through retail shops* (% of value sales), by broad drink type, 2007-08
                                                              • The spirits market revives
                                                                • Figure 29: UK household expenditure on spirits* for in-home drinking, 1998-2009
                                                                • Figure 30: UK household expenditure on spirits* for in-home drinking, and share of total in-home spending, 1998-2009
                                                                • Figure 31: UK household expenditure on spirits and liqueurs through retail shops* (% of value sales), by broad drink type, 2007-08
                                                              • Beer’s popularity continues to wane
                                                                • Figure 32: UK household expenditure on beer and non-alcoholic beer for in-home drinking, 1998-2009
                                                                • Figure 33: UK household expenditure on beer and non-alcoholic drinks for in-home drinking, and share of total in-home spending, 1998-2009
                                                                • Figure 34: UK household expenditure on beer and non-alcoholic drinks through retail shops* (% of value sales), by broad drink type, 2007-08
                                                            • The Consumer – Competitive Context

                                                              • Key points
                                                                • The in-home drinking market – or markets?
                                                                  • The young favour light, clear drinks
                                                                    • Figure 35: Popular drinks among consumers aged under 35, 2008
                                                                  • But tastes move to darker drinks as consumers age
                                                                    • Figure 36: Popular drinks among consumers aged 35-54, 2008
                                                                  • 55+ consumers; the dark ages
                                                                      • Figure 37: popular drinks among consumers aged 55-65+, 2008
                                                                    • Taking the long-view: The rise of the wine drinker
                                                                      • Figure 38: Index of consumer expenditure on alcoholic drinks sold in the off-trade (at constant 2003 prices, 1964 = 100), 1964-2008
                                                                      • Figure 39: UK consumer expenditure on alcoholic drinks sold in the off-trade, % by broad sector, 1965-2008
                                                                    • Is cider taking the edge off the wine and lager markets?
                                                                        • Figure 40: Change in consumer penetration (% points) of in-home drinks, 2006-08
                                                                    • Consumer Usage

                                                                      • Key points
                                                                        • A migration to in-home drinking
                                                                          • Figure 41: Trends for drinking alcohol in-home and out-of-home (% of drinkers), 2004-08
                                                                        • In-home drinking at saturation point
                                                                            • Figure 42: Trends for drinking alcohol in-home, 2004-08
                                                                          • Wealthier adults more likely to drink at home…
                                                                            • Figure 43: Penetration of drinking at home, by socio-economic group and ACORN group, April 2009
                                                                          • …but having children tends to dampen the tendency to drink at home
                                                                              • Figure 44: Penetration of drinking at home, by age, lifestage and presence of children, April 2009
                                                                            • Asda, Waitrose and Morrisons punching above their weight
                                                                                • Figure 45: In-home drinkers, by main supermarket, compared to total supermarket share, April 2009
                                                                              • No sign that the gender gap is declining
                                                                                  • Figure 46: The gender gap for heavy alcohol consumption in-home, 2004-08
                                                                                • British and Germans are the heaviest in home drinkers
                                                                                  • Figure 47: Consumption of alcohol in-home for GB vs France, Spain and Germany, 2008
                                                                              • Consumer Attitudes – Drivers of In-home Drinking

                                                                                • Key points
                                                                                  • Money worries drive drinking at home
                                                                                    • Figure 48: Agreement with statements regarding in-home alcohol consumption over past 12 months, April 2009
                                                                                  • The social dimension important
                                                                                    • Stress also a prime motivation
                                                                                      • Financial factors have strongly influenced the least affluent drinkers
                                                                                        • Figure 49: Index of the financial factors driving in-home drinking, by socio-economic group and ACORN group, April 2009
                                                                                      • The young influenced by cost and the more mature by quality
                                                                                        • Figure 50: Index of the financial factors driving in-home drinking, by gender, age and lifestage, April 2009
                                                                                      • Supermarket offers prompt sales but not necessarily drinking
                                                                                        • Young singles strongly influenced by social factors
                                                                                          • Figure 51: Percentage of people drinking more at home for social reasons, by age, marital status and lifestage, April 2009
                                                                                        • Full-time employees aged 25-54 feeling the pressure…
                                                                                          • Figure 52: Percentage of people drinking more at home to relax after a day at work, by employment status and age, April 2009
                                                                                      • Consumer Attitudes – The Importance of Offers

                                                                                        • Key points
                                                                                          • A nation of promotion junkies... ?
                                                                                            • Figure 53: The influence of discounts when buying alcohol from supermarkets/off licences, Aril 2009
                                                                                          • Supermarket promotions take business from the specialist retailers
                                                                                            • The young and old focus on brands more than value
                                                                                              • Figure 54: Tendency to buy on offer** from supermarkets/off licences, by gender, age and lifestage, April 2009
                                                                                            • More money does not mean more indifference towards offers
                                                                                              • Figure 55: Tendency** to buy on offer from supermarkets/off licences, by socio-economic group and ACORN group, April 2009
                                                                                            • Sharing is an important driver of take-home purchasing
                                                                                              • Figure 56: Indicators of buying take-home drinks to share, April 2009
                                                                                              • Figure 57: Tendency to share** when purchasing alcoholic drinks in the off trade, April 2009
                                                                                            • Consumer tastes may change in the off-trade
                                                                                              • Figure 58: Indicators of alcoholic drink buying behaviour in the off-trade, April 2009
                                                                                            • Segmentation of buying strategy
                                                                                              • Figure 59: Segmentation of alcoholic drinkers/buyers, by switching strategy, April 2009
                                                                                            • Affluent and mature are brand switchers
                                                                                              • Figure 60: Relative tendency of consumers to switch brands or drink types, by demographics, April 2009
                                                                                          • Targeting Opportunities

                                                                                            • Key points
                                                                                              • Recession Targets: Consumers adopting one of four strategies
                                                                                                  • Figure 61: How consumers have adjusted in the past year to the recession and cost pressures, April 2009
                                                                                                • Poorer adults forced to save the most…
                                                                                                  • Figure 62: How consumers have adjusted in the past year to the recession and cost pressures, by socio-economic group and ACORN group April 2009
                                                                                                • … while older adults less likely to save
                                                                                                  • Figure 63: How consumers have adjusted in the past year to the recession and cost pressures, by gender, age and lifestage, April 2009
                                                                                                • Marketing targets: Four key groups
                                                                                                  • Figure 64: Market targets based on how alcoholic drink consumption has changed in the past 12 months, April 2009
                                                                                                  • Figure 65: Marketing targets based on how alcoholic drink consumption has changed in the past 12 months, April 2009
                                                                                                • Less affluent and males forced out of the pub and pulled into the home
                                                                                                  • Figure 66: Market targets** based on how alcoholic drink consumption has changed in the past 12 months, by age, gender, socio-economic group and lifestage, April 2009
                                                                                              • Appendix: The Consumer – Competitive Context

                                                                                                  • Figure 67: Demographics of in-home drinking, by drink type, 2008
                                                                                                  • Figure 68: Demographics of in-home drinking, by drink type, 2008 (continued)
                                                                                                  • Figure 69: Demographics of in-home drinking, by drink type, 2008 (continued)
                                                                                              • Appendix – Consumer Usage

                                                                                                  • Figure 70: Penetration and profile of in-home alcoholic drink consumers, April 2009
                                                                                                  • Figure 71: Frequency of in-home alcohol consumption, by demographics, 2008
                                                                                              • Appendix – Consumer Attitudes

                                                                                                  • Figure 72: Why adults are drinking more at home in the past 12 months, April 2009
                                                                                                  • Figure 73: Consumer offer buying behaviour in supermarkets/off-licences, April 2009
                                                                                                  • Figure 74: Tendency of adults to buy alcohol through supermarkets/off-licences on offer, April 2009
                                                                                                  • Figure 75: Profile of adults by their tendency to buy alcohol through supermarkets/off licences on offer, April 2009
                                                                                                  • Figure 76: Consumer buying behavuour in supermarkets/offlicences, April 2009
                                                                                                  • Figure 77: Consumer switching strategies when using the off-trade, April 2009
                                                                                                  • Figure 78: How consumers have adjusted to the recession, April 2009
                                                                                              • Appendix – Consumer Targets

                                                                                                  • Figure 79: How consumer have reacted to the recession in the past 12 months, April 2009
                                                                                                  • Figure 80: Marketing target cluster groups, by demographics, April 2009

                                                                                              Companies Covered

                                                                                              • Advertising Standards Authority
                                                                                              • Aldi Stores Ltd (UK & Ireland)
                                                                                              • Asda Group Ltd
                                                                                              • British Beer and Pub Association
                                                                                              • British Market Research Bureau (BMRB)
                                                                                              • British Retail Consortium
                                                                                              • British Sky Broadcasting Group plc (BSkyB)
                                                                                              • Co-operative Group
                                                                                              • Direct Wines Ltd
                                                                                              • Government Actuary's Department (GAD)
                                                                                              • Guinness
                                                                                              • J. Sainsbury
                                                                                              • Jamie Oliver
                                                                                              • Lidl (UK)
                                                                                              • Marks & Spencer
                                                                                              • MySpace.com
                                                                                              • Nintendo UK Entertainment Ltd
                                                                                              • Oddbins Ltd
                                                                                              • Research in Motion Uk Ltd.
                                                                                              • Scottish & Newcastle Plc
                                                                                              • Setanta Sports
                                                                                              • Tesco Plc
                                                                                              • Virgin Wine Online Ltd
                                                                                              • Wm Morrison Supermarkets
                                                                                              • YouTube, Inc.

                                                                                              In-home Drinking - UK - July 2009

                                                                                              US $2,583.33 (Excl.Tax)