UK Alcoholic Drinks Industry Review 2024
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Report Summary
Stay ahead of the curve with Mintel’s UK Alcoholic Drinks Review. The full report is packed with consumer-led market intelligence, the latest alcoholic drinks industry trends and market factors affecting your business.
Key Issues Covered in this Report:
- The impact of the cost-of-living crisis on value and volume sales of alcoholic drinks
- Key trends in launches of alcoholic drinks in 2023-24
- Key attributes held by consumers to make alcoholic drinks healthier, and how companies can address consumers’ health concerns while adhering to regulations
- Leading retail and on-trade purchase channels for alcoholic drinks, by type and frequency of use
- The importance of at-home social occasions as a purchase driver for alcoholic drinks
- Interest in use of AI as a vehicle for product recommendations and in product development
UK Alcoholic Drinks Market Landscape
The cost-of-living crisis drove down category volume sales in 2023, with the duty hike in August further discouraging purchase. Volume sales should pick up in 2025 as income growth regains momentum.
- UK alcohol market size: Standing at £50 billion in 2023, total value sales of alcoholic drinks grew by 1.2% over 2019-23, while volume sales fell by 9.4%.
- UK alcohol market share: In terms of retail sales, Stella Artois remains the UK’s most popular alcoholic drink.
UK Alcoholic Drinks Consumer Trends
Alcohol moderation is the primary barrier for many alcoholic drinks, and is likely to gain strength with improved income growth. Further NPD in healthier variants, including in low-/no-alcohol versions, should help companies to maintain consumer engagement.
A marketing focus on at-home social occasions remains relevant in 2024, as income growth remains subdued. Some 69% of drinkers/buyers (82% of 18-34s) often buy alcoholic drinks for socialising at home with friends and family instead of going out to venues.
Find an analysis of market dynamics, consumer insights, and innovation and marketing trends in the full report. Readers of this report may also be interested in Mintel’s A Year of Innovation in Beer and Cider and A Year of Innovation in Wines, Spirits and RTD.
Meet The Expert
This report is written by Mintel’s Food and Drink Analyst, Alice Baker. Alice joined Mintel in 2016. She has previously worked for the International Meat Trade Association and in local government. She holds a BA in History and an MA in History of Political Thought from University College London.
A focus on at-home socialising remains relevant in 2024 amid subdued income growth; further NPD in healthier variants is needed given increased alcohol moderation.
Alice Baker
Food and Drink Analyst
Table of Contents
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Executive Summary
- Opportunities for the alcoholic drinks market
- Focus on at-home socialising remains relevant in 2024 amid sluggish real income growth
- Provide further nutritional information on alcoholic drinks to keep consumers engaged
- Make use of AI technology to recommend products
- Market dynamics and outlook
- Market size & forecast
- Market predictions
- On-trade loses ground in 2023, with spirits seeing the steepest declines
- Graph 1: growth/decline in value/volume sales of alcoholic drinks, by on- and off-trade, 2023
- Value sales outpace volume sales in all segments in 2023
- Graph 2: total value sales of alcoholic drinks, by segment, 2021-23
- Major alcohol brands struggle over 2023-24 amid own-label gains
- Graph 3: value sales of alcoholic drinks, by top ten brands, 2021/22-2023/24
- What consumers want and why
- 85% of adults drink alcoholic drinks; beer and still wine are the most widely drunk types
- Graph 4: usage of alcoholic drinks, by category, 2021-24
- Lower sugar and all-natural ingredients are among leading factors held to make alcoholic drinks healthier
- Graph 5: attributes deemed to make alcoholic drinks healthier, 2024
- In-store purchase dominates for alcoholic drinks, and within this, buying from supermarkets
- Graph 6: in-store, online and on-trade buying of alcoholic drinks in the last 3 months, 2024
- At-home socialising underpins alcohol usage; many are open to the use of AI
- Graph 7: behaviours relating to alcoholic drinks, 2024
- Innovation and marketing
- Low-/no-alcohol launches continue in 2023-24; fruit flavours lose share of launches, and dessert flavours gain
- Advertising spend on alcoholic drinks falls in 2023
- Graph 8: total above-the-line, online display and direct mail advertising on alcoholic drinks, by top 5 advertisers, 2021-24
-
Market Dynamics
- Market size
- Volatile value and volume sales seen over 2019-23
- Graph 9: total value sales of alcoholic drinks, 2019-23
- Market forecast
- Improved on-trade performance to boost value sales in 2025
- Slow income growth to hinder alcoholic drinks in the short term, and ageing population in the longer term
- Continued, though slowing, inflation and weak volume sales predicted for 2023-28
- Graph 10: projected growth in value and volume sales of alcoholic drinks, 2023-28
- Alcoholic drinks were slow to recover from the 2008-09 recession
- Graph 11: growth/decline in total value and volume sales of alcoholic drinks, 2008-14
- …continuing to fall while real incomes fell
- Channels to market
- On-trade loses ground to retail in 2023 as cost-of-living crisis bites
- Graph 12: volume sales of alcoholic drinks, by on- and off-trade, 2021-23
- Price inflation fuels value growth in 2023
- Graph 13: value sales of alcoholic drinks, by on- and off-trade, 2021-23
- Market segmentation
- Beer is the largest segment; volume sales decline in all segments in 2023
- Graph 14: total value sales of alcoholic drinks, by segment, 2021-23
- Cider performs the best in the on-trade in 2023, spirits struggle
- Graph 15: growth/decline in value and volume sales of alcoholic drinks in the on-trade, by segment, 2023
- Market share
- Value sales for leading alcohol brands outpace volumes in retail in 2023/24
- Graph 16: retail value sales of alcoholic drinks, by top ten brands, 2021/22-2023/24
- Mid-market beer brands lose out as shoppers trade both up and down
- Graph 17: growth/decline in retail value and volume sales of selected leading beer brands, 2023/24*
- Leading spirits brands lose volume sales over 2023-24
- Graph 18: growth/decline in retail value and volume sales of selected leading spirits brands, 2023/24*
- Macro-economic factors
- The UK economy emerges from shallow recession of the second half of 2023
- Graph 19: GDP, 2021-24
- Food and drink inflation and higher energy prices remain the leading concerns for consumers
- Graph 20: "Have you been affected by any of these issues over the last two months? Please select all that apply.", 2023
- Interest rates will rise in importance in 2024
- Consumer sentiment: the recovery has begun…
- Graph 21: the financial wellbeing index, 2017-24
- …and people feel more confident about their financial prospects
- Graph 22: the financial confidence index, 2017-24
- Alcohol inflation overtakes overall inflation in 2023
- Graph 23: RPI inflation in beer, wine and spirits and all-items, 2020-24
- Cost pressures on the industry drive an increase in pub closures in 2023
- Social, environmental and legal factors
- Changes to alcohol duties raise duty on higher-strength products, pushing up prices within the category
- Duties are reduced on some alcoholic drinks
- New alcohol duty freeze offers relief to the sector
- Scotland raises the minimum unit price on alcohol
- Graph 24: age-standardised alcohol-specific death rates per 100,000, by nation, 2018-22
- Cost-of-living crisis adds momentum to the alcohol moderation trend
- Further delays to DRS rollout
- Ageing UK population will erode sales for some segments; others should be better insulated
- Graph 25: trends in the age structure of the UK population, 2023-28
- Cooler, wetter spring-summer in 2023 dampens demand in multiple segments
- Graph 26: total hours of sunshine, by season, 2019-24
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What Consumers Want and Why
- Usage of alcoholic drinks
- 85% of adults drink alcoholic drinks
- Graph 27: usage of alcoholic drinks, by category, 2023 and 2024
- Beer and still wine lead on usage
- Beer and still wine are the most widely drunk alcoholic drinks types
- Graph 28: usage of alcoholic drinks, by type, 2024
- Ageing UK population will negatively affect some alcoholic drinks but not others
- Graph 29: usage of selected alcoholic drinks, by age group, 2024
- Seven in ten adults drink alcohol once a week or more
- Graph 30: usage frequency for alcoholic drinks, by how people describe their finances, 2024
- Attributes deemed to make alcoholic drinks healthier
- Companies must tread a careful path when it comes to alcoholic drinks and health
- Companies have multiple options to signal particular alcoholic drinks as healthier
- Graph 31: attributes deemed to make alcoholic drinks healthier, 2024
- Make nutritional information for alcoholic drinks more accessible to consumers
- Lower sugar is the leading attribute held to make alcoholic drinks healthier
- Include sugar within an on-pack nutritional table
- Draw attention to lower-sugar and -calorie options both in retail and the on-trade
- Consumer health concerns open up opportunities for low-/no-alcohol variants
- Explore traditional methods to deliver lower sugar and alcohol content
- Explain production processes to reassure consumers concerned about sugar content
- Need for alcohol brands to prove their products' natural credentials
- Graph 32: views of selected types of alcoholic drinks as 'natural', 2023
- Educate consumers on how alcoholic drinks are made and their history
- Supplement 'all natural ingredients' claims with references to ingredient provenance and heritage
- A quarter see lower calories as defining a healthier alcoholic drink
- Reduced-calorie variants appeared in various alcoholic drinks segments in 2023
- Highlight where lower alcohol content equals lower calories
- Retail and on-trade channels for buying alcoholic drinks
- In-store channels lead on alcoholic drinks purchase
- Graph 33: in-store, online and on-trade buying of alcoholic drinks in the last 3 months, 2024
- Alcoholic drinks underperform on online purchase
- Bricks-and-mortar stores have a narrow lead over on-trade venues on purchase frequency
- Graph 34: frequency of buying alcoholic drinks, by channel, 2024
- Younger adults are especially likely to buy alcoholic drinks online
- Graph 35: in-store, online and on-trade buying of alcoholic drinks, by age group, 2024
- Buying from on-trade venues peaks among under-35s and the financially better off
- Graph 36: frequency of buying alcoholic drinks from on-trade venues, by age group and how people describe their household finances, 2024
- Supermarkets lead on alcoholic drinks purchase by some distance
- Three in ten adults buy alcoholic drinks from discounters
- Graph 37: purchase of alcoholic drinks from discount supermarkets, by how people describe their household finances, 2024
- Behaviours relating to alcoholic drinks
- At-home socializing underpins alcohol usage
- Graph 38: behaviours relating to alcoholic drinks, 2024
- Build associations with at-home social occasions to drive purchase
- A focus on at-home occasions remains relevant in 2024 amid sluggish real income growth
- Younger adults and parents are the key at-home socialisers
- Graph 39: those who often buy alcoholic drinks for socialising with friends/family at home instead of going out to venues, by age group and parental status, 2024
- Focus more strongly on food pairings to tap into the 'Big Night In' occasion
- In-store placement can help to get alcohol brands front-of-mind for at-home social occasions
- Sporting events in 2024 offer opportunities
- Graph 40: selected consumer plans for the 2024 UEFA Euros and 2024 Summer Olympics/Paralympics, 2024
- TV tie-ins can help to drive associations with evenings in
- Engage with social media trends centred around at-home socialising
- Offer suggestions of how to enhance the aesthetics of the serve at POS as well as online
- Drinks with attributes that spark conversation should appeal for at-home social occasions
- Visual flair adds an element of theatre; unusual flavours spark curiosity
- At-home social occasions offer good opportunities to drive purchase of low-/no-alcohol variants
- Utilise AI tools to guide consumers
- AI advice on alcoholic drinks appeals to many
- Set up AI chat programmes to advise both those buying for themselves and for gifting
- Allow shoppers to access AI chatbots in-store
- An alcoholic drink created by AI tempts a third of drinkers/buyers
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Innovation And Marketing Trends
- Launch activity and innovation
- Brands continue to add low-/no-alcohol variants in 2023-24
- …but face competition from own-label
- Various brands launch drinks with a lower-than-average alcohol content for their category in 2023-24
- Brands and retailers overhaul their packaging to boost its sustainability
- Alcohol brands highlight their eco-friendly production and sourcing
- Fruit flavours remain important but lose share of alcoholic drinks launches in 2023
- Graph 41: share of alcoholic drinks launches, by selected flavour components, 2019-24
- Fruit flavoured alcoholic drinks call out their quality ingredients and authentic flavour profiles
- Dessert flavours gain share of launches in 2023
- Various brands extend into RTDs
- Advertising and marketing activity
- Advertising spend on alcoholic drinks falls in 2023
- Graph 42: total above-the-line, online display and direct mail advertising on alcoholic drinks, by top 5 advertisers, 2021-24
- Guinness takes the largest share of Diageo's advertising spend in 2023, at 19%
- Guinness links itself with Christmas and Pimm's is presented as essential to summer
- Peroni targets special occasions, and Asahi looks to engage rugby fans
- Focus on at-home occasions is timely amid pressure on household incomes
- 'Travel through flavour' advertising theme in 2023 is also timely
- Friendship and social connections is another key theme in alcoholic drinks advertising in 2023
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Appendix
- Supplementary data
- Appendix: Channels to market
- Appendix: Market segmentation
- Appendix: Market segmentation and Channels to market (1)
- Appendix: Market segmentation and Channels to market (2)
- Appendix: Market share – value sales
- Appendix: Market share – volume sales
- New alcohol duty system – Beer
- New alcohol duty system – Wine
- New alcohol duty system – Spirits
- UK seasonal temperatures
- UK seasonal rainfall
- Appendix – Advertising and marketing activity
- Market forecast data and methodology
- Market size and forecast
- Market forecast and prediction intervals – values
- Market forecast and prediction intervals – volumes
- Forecast methodology
- Report scope and definitions
- Market definition
- Abbreviations and terms
- Methodology
- Consumer research methodology
- Nielsen Ad Intel coverage
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