2021
9
UK Alcoholic Drinks Market Report 2021
2021-07-03T04:14:20+01:00
OX1044871
2195
140024
[{"name":"Alcoholic Drinks","url":"https:\/\/store.mintel.com\/industries\/drinks\/alcoholic-drink"}]
Report
en_GB
“Value sales of alcoholic drinks declined by 21% in 2020. The second half of 2021 will see a strong recovery, but the alcohol moderation trend poses a challenge for brands…

UK Alcoholic Drinks Market Report 2021

£ 2,195 (Excl.Tax)

Description

Providing the most comprehensive and up-to-date information and analysis of the UK Alcoholic Drinks market, including the behaviours, preferences and habits of the consumer.

Highlighting the importance of brands continuing to target at home drinking occasions, 75% of drinkers and buyers of alcoholic drinks find drinking alcoholic drinks while socialising at home just as enjoyable as drinking out of home. Forging connotations with a wide range of indoor and outdoor socialising is needed to keep brands relevant.

Value sales of alcoholic drinks declined by an unprecedented in recent times 20.6% to £39.4 billion in 2020 as a result of a shift from the on-trade to the lower-priced off-trade due to lockdowns and other restrictions on the hospitality sector. A sharp recovery in alcoholic drink sales is forecast for 2021, as easing of restrictions allows the higher-priced on-trade to regain momentum.

A bigger focus on health is likely to boost the alcohol moderation trend, hitting volume growth in sales of alcoholic drinks. The widespread scrutiny of units of alcohol and calories highlights a pressing need for the industry to improve its credentials to stay on the menu: 51% of drinkers and buyers of alcoholic drinks pay close attention to the number of alcohol units they drink and 33% close attention to the number of calories in drinks.

Being a well-established brand has its advantages; 32% of buyers of alcoholic drinks were most encouraged to buy a new alcoholic drink if it was from a favourite brand. It shows the importance to brands of new launches to keep existing brand users engaged and buying, with the last year seeing brands continuing to extend their product portfolios, including with more RTDs, hard seltzers and alcohol-free variants.

Read on to discover more details or take a look at all of our UK Drinks market research.

Quickly understand

  • The impact of COVID-19 on the drinking of alcoholic drinks and consumer behaviours.
  • Types of alcoholic drink drunk, and frequency of drinking.
  • Where alcoholic drinks are bought, and factors influencing choice of online retailers.
  • New launch activity in alcoholic drinks, and factors encouraging purchase of new drink.
  • Behaviours related to drinking and buying alcoholic drinks.

Covered in this report

Brands: AB InBev (Stella Artois, Corona), Diageo (Smirnoff, Gordon’s), Heineken (Foster’s, Strongbow, Heineken), Molson Coors (Carling), Accolade Wines (Hardy’s), BBFB (Jack Daniels), E&J Gallo (Barefoot), Carlsberg (San Miguel, Carlsberg), Edrington Beam Suntory (The Famous Grouse), Casella Family Brands (Yellow Tail), Kopparberg Cider of Sweden (Koppargerg), Asahi (Peroni), Australian Vintage (McGuigan), Concha y Toro Winery (Casollero Del Diablo), Budweiser (Budweiser Zero), Doom Bar (Doom Bar Zero), Gunness (Guinness 0.0), Beefeater, Taylor’s Port, Tanqueray, Treasury Wine Estates, Strykk, CleanCo, Three Fold, White Claw, Nordic Wolf, M&S, Seedlip, Hammerton, BrewDog, Northern Monk, Whitley Neill, Absolut, Baileys, Sol Beer.

Expert analysis from a specialist in the field

Written by Richard Caines, a leading analyst in the Food & Drink sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Value sales of alcoholic drinks declined by 21% in 2020. The second half of 2021 will see a strong recovery, but the alcohol moderation trend poses a challenge for brands in terms of increasing volume sales in the coming years. Flavour innovation, brand extensions and drinks that are lower in alcohol or calories offer continued opportunities for brands, as does selling alcoholic drinks and experiences with an element of exclusivity directly to the consumer.

Richard Caines
Senior Food & Drink Analyst

Table of Contents

  1. Overview

    • Key issues covered in this Report
    • COVID-19: Market context
    • Economic and other assumptions
    • Products covered in this Report
  2. Executive Summary

    • Alcoholic drinks sales hit hard by closure of pubs and bars
      • Figure 1: Short, medium and long-term impact of COVID-19 on alcoholic drinks, 9 June 2021
    • The market
    • Steep fall in 2020 value sales of alcoholic drinks
    • Rapid recovery in sales expected in 2021/22…
    • …but return to 2019 spending on alcohol not expected until 2023
      • Figure 2: Forecast of UK value sales of alcoholic drinks, 2015-25
    • Alcohol moderation trend poses a threat to sales
    • UK government consults on calorie labelling for alcoholic drinks
    • Ageing population better news for some drinks than others
    • Companies and brands
    • Top brands increase share of alcohol retail sales
      • Figure 3: UK retail value sales of the top alcoholic drinks brands, 2020/21*
    • Low/no-alcohol offerings continue to expand
    • Hard seltzers seeing more launch activity
    • RTDs a big focus for brands extending product portfolios
    • Big drop in 2020 advertising of alcoholic drinks
    • The consumer
    • Increase in the proportion of adults not drinking alcohol
    • Still wine most popular alcoholic drink
      • Figure 4: Types of alcoholic drinks drunk, November 2019 and March 2021
    • More drinkers drink alcohol at least once a week than in 2019
      • Figure 5: Frequency of drinking alcoholic drinks, November 2019 and March 2021
    • In-store dominates buying of alcoholic drinks
      • Figure 6: Channels alcoholic drinks were bought through in the last 3 months, March 2021
    • Saving money biggest influence on online retailer choice
      • Figure 7: Factors encouraging the buying of alcoholic drinks from one online retailer over another, March 2021
    • Promotions help encourage buyers to try something new
    • Better-for-you attributes less of a trigger to buying
      • Figure 8: Factors most likely to encourage buying of a new alcoholic drink, March 2021
    • Socialising at home with drinks has strong appeal
    • Direct-to-consumer opportunities for alcoholic drinks brands
      • Figure 9: Behaviours related to drinking and buying alcoholic drinks, March 2021
  3. Issues and Insights

    • COVID-19 increases spending on off-premise alcoholic drinks
    • Shift away from drinking in pubs, bars and restaurants
    • Socialising at home with drinks has strong appeal
    • Pairing suggestions for meals at home warranted
    • Brand extensions offer more opportunities for increasing sales
    • Favourite brands have an advantage over new ones
    • Hard seltzers a recent focus for brand extension
    • RTDs a big focus for brands extending product portfolios
    • Launching premium variants will help drive value growth
    • Direct-to-consumer opportunities for alcoholic drinks brands
    • DTC becomes more important during pandemic
    • Need for brands to go beyond what is already offered at retailers
    • Brands should also look beyond just selling their drinks directly
    • Brands in alcoholic drinks need to improve their health credentials
    • Bigger focus on health since COVID-19 outbreak
    • Better-for-you attributes not a primary trigger to buying
    • Early movers in calorie labelling have much to gain
    • Hard seltzers tapping interest in lower-calorie drinks
  4. The Market – Key Takeaways

    • Steep fall in 2020 value sales of alcoholic drinks
    • Volume sales hit most by reductions in on-trade beer sales
    • Rapid recovery in sales expected in 2021/22…
    • …but return to 2019 spending on alcohol not expected until 2023
    • Alcohol moderation trend poses a threat to sales
    • UK government consults on calorie labelling for alcoholic drinks
    • Ageing population better news for some drinks than others
    • Majority describe their financial situation as healthy or OK
  5. Market Size and Forecast

    • Alcoholic drinks sales hit hard by closure of pubs and bars
      • Figure 10: Short, medium and long-term impact of COVID-19 on alcoholic drinks, 9 June 2021
    • Steep fall in 2020 value sales of alcoholic drinks
      • Figure 11: Total UK value sales of alcoholic drinks, 2015-25
      • Figure 12: Total UK volume sales of alcoholic drinks, 2015-20
    • Rapid recovery in sales expected in 2021/22
      • Figure 13: Forecast of UK value sales of alcoholic drinks, 2015-25
    • Market drivers and assumptions
      • Figure 14: Key drivers affecting Mintel’s market forecast, 2015-25 (prepared on 15 April 2021)
    • Learnings from the 2008/09 recession
      • Figure 15: Annual growth in value and volume sales of beer, 2009-13
      • Figure 16: Annual growth in value and volume sales of still, sparkling and fortified wine, 2009-13
    • Forecast methodology
  6. Market Segmentation and Channels to Market

    • Beer and cider see biggest volume sales declines
    • More drinking of wine at home boosts volume sales
    • White spirits and RTDs loses a quarter of its value in 2020
    • Value sales of dark spirits and liqueurs nosedive
      • Figure 17: UK volume sales of alcoholic drinks, by segment and channel, 2018-20
      • Figure 18: UK value sales of alcoholic drinks, by segment and channel, 2018-20
  7. Market Drivers

    • COVID-19 pandemic hits the on-trade
    • Loss of social occasions has meant less drinking of alcohol
    • Alcohol moderation trend poses a threat to sales
    • UK government consults on calorie labelling for alcoholic drinks
    • Number of factors influencing prices
    • Duties on alcohol untouched
    • Brexit has little impact on alcohol prices
    • Rising costs likely to push up price of alcoholic drinks
    • No plans for minimum unit pricing in England
    • Ageing population better news for some drinks than others
      • Figure 19: Trends in the age structure of the UK population, 2015-25
    • Majority describe their financial situation as healthy or OK
      • Figure 20: How respondents would describe their financial situation, February 2009-May 2021
  8. Companies and Brands – Key Takeaways

    • Top brands increase share of total alcohol sales
    • Strong performance for premium world beers
    • Gordon’s boosted by gin boom and new variants
    • Low/no-alcohol offerings continue to expand
    • Hard seltzers seeing more launch activity
    • RTDs a big focus for brands extending product portfolios
    • Flavour innovation a big focus of NPD
    • Big drop in 2020 advertising of alcoholic drinks
  9. Market Share

    • Strong year for retail sales of leading alcoholic drinks brands
    • Top brands increase share of total alcohol sales
      • Figure 21: UK retail value sales of the top alcoholic drinks brands, 2019/20 and 2020/21
    • Strong performance for premium world beers
    • Gordon’s boosted by gin boom and new variants
  10. Launch Activity and Innovation

    • Low/no-alcohol offerings continue to expand
    • Beer leads low/no-alcohol launches
    • Diageo launches alcohol-free variants for Gordon’s and Tanqueray
    • Strykk and CleanCo extend non-alcoholic spirit ranges
      • Figure 22: Examples of alcohol-free launches in the UK spirits market, 2020/21
    • Hard seltzers seeing more launch activity
    • Big drinks companies enter hard seltzers with new brands…
    • …but also extend existing brands into hard seltzers
      • Figure 23: Examples of drinks companies expanding into hard seltzers in the UK alcoholic drinks market, 2020/21
    • Own-label follows fast on the heal of brands
      • Figure 24: Examples of hard seltzer launches in the UK alcoholic drinks market, 2020/21
    • RTDs a big focus for brands extending product portfolios
      • Figure 25: Examples of brands launching RTDs in the UK alcoholic drinks market, 2020/21
    • Flavour innovation a big focus of NPD…
    • …from fruity combinations to sweet treats in beer and cider
      • Figure 26: Examples of flavour innovation in the UK beer market, 2021
    • Spirits and liqueurs a hotbed for new flavour launches
      • Figure 27: Examples of flavour innovation in the UK gin market, 2021
      • Figure 28: Examples of flavour innovation in the UK vodka and liqueurs market, 2020/21
    • Drinks companies look to improve their sustainability
      • Figure 29: Moves by brands in the UK beer market on sustainability, 2021
    • More alcohol brands enable direct-to-consumer sales
  11. Advertising and Marketing Activity

    • Big drop in 2020 advertising of alcoholic drinks
      • Figure 30: Total above-the-line, online display and direct mail advertising expenditure on alcoholic drinks*, by media type, 2017-21
      • Figure 31: Total above-the-line, online display and direct mail advertising expenditure on alcoholic drinks, by category, 2019-21
    • Diageo the biggest alcoholic drinks advertiser
      • Figure 32: Total above-the-line, online display and direct mail advertising expenditure on alcoholic drinks*, by advertiser (top 20), 2019-21
    • Beer brands offering more support to pub sector
    • Budweiser runs Save Pub Life programme
    • Carlsberg promotes socially distanced pub visits
    • Diageo makes £30 million available for pubs
    • Stella Artois celebrates reopening of pubs
    • Carling runs ‘Support Your Local’ campaign
    • Togetherness and supporting others become bigger themes
    • Budweiser updates ‘Having a Bud’ advert
    • Yellow Tail puts focus on people and celebrations
    • Absolut emphasises importance of human connections
    • Birra Moretti celebrates life’s simple pleasures
    • Thatchers emphasises family values
    • Brands champion post-lockdown discovery and appreciation
    • Corona encourages rediscovery of beauty spots
    • Peroni promotes appreciation of the little things
    • Quality, expertise and provenance highlighted by brands to enhance premium image
    • Whitley Neill puts strong emphasis on expertise
    • Grolsch champions Dutch heritage
    • Laithwaites launches summer ‘wine cellar feeling’ campaign
    • Nielsen Ad Intel coverage
  12. The Consumer – Key Takeaways

    • Increase in the proportion of adults not drinking alcohol
    • Still wine most popular alcoholic drink
    • More drinkers drink alcohol at least once a week than in 2019
    • In-store dominates buying of alcoholic drinks
    • Saving money biggest influence on online retailer choice
    • Promotions help encourage buyers to try something new
    • Better-for-you attributes less of a trigger to buying
    • Socialising at home with drinks has strong appeal
    • Direct-to-consumer opportunities for alcoholic drinks brands
  13. Impact of COVID-19 on Consumer Behaviour

    • Increase in spending on off-premise alcoholic drinks
      • Figure 33: Agreement with ‘The COVID-19/coronavirus outbreak has seen me treating myself to alcoholic drinks more often’, by age, March 2021
    • COVID-19 encourages experimenting with new drinks among large minority
      • Figure 34: COVID-19/coronavirus outbreak prompting the trial of new brands or types of alcoholic drinks, by age and household income, March 2021
    • Bigger focus on health likely to boost the alcohol moderation trend
    • Impact of COVID-19 on consumer finances and spending limited
    • A sharp uplift in online shopping and boost to buying locally during the pandemic
    • COVID-19 turbocharges online shopping
    • COVID-19 fuels an uptick in shopping locally
    • Big drive on sustainability expected following COVID-19
  14. Types of Alcoholic Drinks Drunk

    • Increase in the proportion of adults not drinking alcohol
      • Figure 35: Types of alcoholic drinks drunk, by category, November 2019 and March 2021
    • Still wine most popular alcoholic drink
      • Figure 36: Types of alcoholic drinks drunk, November 2019 and March 2021
    • Less than half drink more than two types of alcoholic drink
      • Figure 37: Number of different types of alcoholic drinks drunk, March 2021
  15. Frequency of Drinking Alcoholic Drinks

    • More drinkers drink alcohol at least once a week than in 2019
      • Figure 38: Frequency of drinking alcoholic drinks, November 2019 and March 2021
    • Older people more frequent drinkers of alcohol
      • Figure 39: Frequency of drinking alcoholic drinks, by gender and age, March 2021
  16. Channels for Buying Alcoholic Drinks

    • In-store dominates buying of alcoholic drinks
      • Figure 40: Channels alcoholic drinks were bought through in the last 3 months, March 2021
    • In-store purchases mostly made at supermarkets
      • Figure 41: Where alcoholic drinks were bought in the last 3 months, March 2021
    • Most online purchasing from supermarkets
    • Specialists attract equal audiences online and in-store
    • Amazon is growing its presence
  17. Factors Influencing Choice of Online Retailer

    • Saving money biggest influence on online retailer choice
      • Figure 42: Factors encouraging the buying of alcoholic drinks from one online retailer over another, March 2021
    • Online retailing of alcoholic drinks not just about price
  18. Factors Encouraging Buying of New Alcoholic Drink

    • Promotions help encourage buyers to try something new
      • Figure 43: Factors most likely to encourage buying of a new alcoholic drink, March 2021
    • Favourite brands have an advantage over new ones among one in three
    • Better-for-you attributes less of a trigger to buying
    • Half pay close attention to number of units of alcohol drunk
    • Hard seltzers tapping interest in lower-calorie drinks
  19. Behaviours Related to Drinking and Buying Alcoholic Drinks

    • In-home and outdoor drinking of alcoholic drinks big occasions to target
    • Socialising at home with drinks has strong appeal
      • Figure 44: Behaviours related to drinking and buying alcoholic drinks, March 2021
    • Pairing suggestions for meals at home warranted
    • Direct-to-consumer opportunities for alcoholic drinks brands
    • Strong interest in buying direct from favourite brands
    • Brands should also look beyond just selling their drinks directly
  20. Appendix – Data Sources, Abbreviations and Supporting Information

    • Abbreviations
    • Consumer research methodology
  21. Appendix – Market Size and Forecast

      • Figure 45: Total UK value sales of alcoholic drinks, 2020-25
    • Forecast methodology
  22. Appendix – Market Segmentation

      • Figure 46: Total UK value sales of alcoholic drinks, by segment, 2015-20
      • Figure 47: Total UK volume sales of alcoholic drinks, by segment, 2015-20

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