2022
9
UK Alcoholic Drinks Market Report 2022
2022-06-07T04:10:40+01:00
OX1104587
2195
151966
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Report
en_GB
“Alcoholic drinks’ discretionary nature puts them in line for cutbacks in 2022 as inflation accelerates. Further NPD in smaller formats designed to hit a more accessible price point should help…

UK Alcoholic Drinks Market Report 2022

£ 2,195 (Excl.Tax)

Description

The UK Alcoholic Drinks market report identifies consumer attitudes towards alcoholic drinks, the impact of the cost of living crisis and future innovations in the Alcoholic Drinks market in the UK. This report covers the alcoholic beverages market size, market forecast, market segmentation and industry trends for the Alcoholic Drinks market in the UK.

 

Alcoholic Drinks Market: Common Questions Clients Ask

What is the market size of the alcohol industry?  

The value of the UK alcoholic drinks market is expected to reach just under £50 billion in 2022, up 6% from £46 billion in 2021. The UK alcoholic drinks market is expected to continue with positive growth, with sales forecasted to reach £60.9 billion in 2026.

What is the biggest threat that the UK alcoholic drinks market faces?  

Consumers’ increased health consciousness, due to the COVID-19 pandemic, poses a threat to the UK alcoholic drinks market. Mintel reports that 36% of adults have limited or reduced their alcoholic drinks intake in the 12 months, naming health as a key motivation for moderating their alcohol intake. The income squeeze in 2022 is also likely to further undermine the UK alcohol drinks market sales, given that saving money is a key reason for reducing alcohol consumption.

Who has the largest share of the alcohol market in UK?

Stella Artois remained the leading alcoholic drinks brand in the UK in the 52 weeks to February 2022, recording £774 million in retail value sales. Smirnoff also enjoys a substantial market share, recording £675 million in retail value sales in 2022.

 

UK Alcoholic Drinks Market Current Landscape

The return of socialising and key seasonal events has assisted the alcoholic beverages industry to grow in volume sales in both the on and off-trade channels after the pandemic. Rising average prices will continue to drive the alcoholic drinks market value sales growth. However, this is partly counterbalanced by the absence of an on-trade rebound and consumers trading down within channels.

The alcoholic beverages industry has a discretionary nature, consequently putting it in the firing line for cutbacks over 2022-23 amid pressure on household incomes, which could decrease category volume sales. Despite this, the alcohol beverages industry is expected to remain in modest growth, primarily led by beer, cider and low alcohol options.

Alcohol Beverages Industry Trends and Consumer Behaviours

Mintel’s alcohol market analysis identifies how consumers are likely to trade down to cheaper alcoholic options within the category to help combat the pressure on household incomes, including on to off-trade options or switching brands to own labels.

Visually impressive drinks are set to increase their alcoholic drinks market share in the UK. Brands that provide a visual ‘wow factor’ with packaging or incentives are likely to encourage purchases even as shoppers economise.

Consumer behaviours in the UK alcoholic drinks market

  • 64% of adults who buy alcohol report that needing to save money would prompt them to either stop purchasing alcoholic drinks or cut back on the amount they buy.
  • 29% of alcohol drinkers agree that the environmental impact of alcoholic drinks and brands is a concern. This rises to 54% of alcohol drinkers aged 18-24.
  • 31% of adults who buy alcohol are prompted to purchase alcoholic drinks due to a visual ‘wow factor’.

 

Future Alcoholic Drinks Market Opportunities 

The ongoing and future alcohol moderation trend poses a threat to category sales. The alcoholic drinks market faces additional challenges presented by the income squeeze and consumers’ increased health and eco-consciousness due to the pandemic. The ageing population of the UK will also hamper sales of the alcoholic beverages industry. However, this also offers opportunities for alcohol brands to further improve their innovations in low/no-alcohol versions of their products and improve their environmental credentials.

To discover more about our UK Alcoholic Drinks Market Report 2022, read our UK Low- and No-Alcohol Alcohol Drinks Market Report 2022or take a look at our other Drinks Market Research.

Quickly Understand

  • The likely effects of the income squeeze on value and volume sales of alcoholic drinks.
  • Shifts between the on- and off-trade over 2019-21 and the likely impact of the income squeeze in 2022/23 on these channels.
  • Trends in launch activity within the alcoholic drinks category and opportunities for further innovation.
  • Consumers’ online and digital interactions with alcoholic drinks brands.
  • Consumers’ attitudes towards alcoholic drinks and the environment.

 

Covered in this Report

Product Types:  Beer, cider, white spirits, dark spirits, wine, liqueurs, fortified wine, ready-mixed spirits, sparkling wine, champagne, and cocktails.

Brands:  Heineken (Desperados, Desperados Virgin), AB InBev (Corona Cero), Peroni (Peroni Nastro Azzurro), Kopparberg, Strongbow, Gordons, Molson Coors, Beavertown Brewer (Ghost), Luxlo, Grey Goose, Absolut, WKD, Happy J’s, BrewDog, Bailey’s, Brothers, Harvey Nichols, Captain Morgan, Tarquin’s, Echo Falls, The Bush Rum, Bombay Sapphire, Berry Bros & Rudd, Ellers Farm Distillery, Sapling Spirits, Ehrumanns Wines, Foxhole Spirits, Tapestry Brewery, Willam Grant & Sons, Big Drop Brewery, Redchurch Brewery, Tesco, Asda, Waitrose, Johnnie Walker, Smirnoff, Malibu, and Carlsberg.

Expert Analysis from a Specialist in the Drinks Sector

This report, written by Alice Baker, a leading senior analyst in the Drinks sector, delivers in-depth commentary and analysis to highlight current trends in the UK alcoholic drinks market and add expert context to the numbers.

Alcoholic drinks’ discretionary nature puts them in line for cutbacks in 2022 as inflation accelerates. Further NPD in smaller formats designed to hit a more accessible price point should help brands to maintain sales, also appealing to those moderating alcohol intake for health reasons. Visual effects such as colour-changing can also help brands prompt purchases even amid the income squeeze, especially among younger adults. Meanwhile, stocking drinks not widely available at retail can help on-trade operators to encourage visits despite consumers’ weakened finances.”

Alice Baker
Senior Food & Drink Research Analyst

 

Table of Contents

  1. Overview

    • Key issues covered in this Report
    • Market context
    • Products covered in this Report
  2. Executive Summary

    • The five-year outlook for alcoholic drinks
      • Figure 1: Category outlook, 2022-27
    • The market
    • Inflation and volatile volume sales growth over 2016-21
    • Rising prices to offset weak volume sales growth over 2022-26
      • Figure 2: Market forecast for total value sales of alcoholic drinks, 2016-26
    • Alcohol moderation trend continues
    • Companies and brands
    • Beer brands apart from Peroni lose retail sales in 2021, wine brands maintain sales
      • Figure 3: UK retail value sales of the top 12 alcoholic drinks brands, 2020/21-2021/22
    • Low/no/lower-alcohol launches continue
    • Alcoholic drinks brands take action on sustainability
    • Advertising spend rises in 2021
    • Togetherness and sustainability are key themes in alcoholic drinks advertising in 2021
    • The consumer
    • Effects of income squeeze will be more marked for some segments than others
      • Figure 4: Types of alcoholic drink drunk, by category, by consumers’ description of their financial situation, 2022
    • Ageing UK population will have divergent effects on alcoholic drinks sales
    • More than six in 10 would stop or cut back on drinking alcohol to save money
      • Figure 5: Expected reactions to the income squeeze regarding buying of alcoholic drinks, 2022
    • Point of sale is crucial to driving alcoholic drinks sales
      • Figure 6: Selected consumer interactions with alcoholic drinks brands, 2022
    • Exclusive drinks can help on-trade to drive sales even amid income squeeze
      • Figure 7: Behaviours relating to the income squeeze and alcoholic drinks, 2022
    • The ‘wow factor’ can play key role in engaging consumers
      • Figure 8: Behaviours relating to alcoholic drinks, 2022
    • ‘Support your local pub’ messaging
      • Figure 9: Attitudes towards alcoholic drinks, 2022
  3. Issues and Insights

    • Encourage recommendations and offer smaller formats to navigate the income squeeze in retail
    • Exclusive drinks and community focus can help to drive on-trade sales despite income squeeze
    • Make environmental attributes and their benefits tangible to consumers
  4. Market Size and Performance

    • Inflation and volatile volume sales growth over 2016-21
      • Figure 10: Total value and volume sales of alcoholic drinks, 2016-21
    • Value sales rise ahead of volumes in 2021
  5. Market Forecast

    • Higher prices to be the main motor of category growth over 2022-27
      • Figure 11: Category outlook, 2022-27
    • Rising prices to offset weak volume sales growth over 2022-26
    • Further inflation with modest volume sales growth expected for 2022
    • On-trade’s recovery to drive value sales growth and ageing UK population to weaken volume sales over 2023-26
      • Figure 12: Market forecast for total value sales of alcoholic drinks, 2016-26
      • Figure 13: Market forecast for total volume sales of alcoholic drinks, 2016-26
      • Figure 14: Total value and volume sales of alcoholic drinks, 2016-26
    • Market drivers and assumptions
      • Figure 15: Key economic drivers, 2016-26
    • Forecast methodology
  6. Market Segmentation and Channels to Market

    • On-trade regains sales in 2021, but not back to pre-pandemic levels
      • Figure 16: UK value sales of alcoholic drinks, by segment and channel, 2019-21
      • Figure 17: UK volume sales of alcoholic drinks, by segment and channel, 2019-21
  7. Market Drivers

    • The conflict in Ukraine will hurt the UK economy
    • Ukraine conflict provokes backlash against Russian vodkas
    • GDP reached pre-pandemic levels in November 2021…
    • …but the post-COVID-19 bounce-back will be followed by a period of slower growth
    • Employment has held up better than expected
    • Employment levels are key for alcoholic drinks
      • Figure 18: Usage of alcoholic drinks, by employment status, 2022
    • Inflation is the key concern for 2022 for consumers, brands and the economy
    • Rising production costs in 2022 provide an additional inflationary factor for alcoholic drinks
    • Consumers’ financial wellbeing has slipped from its recent high point…
      • Figure 19: Household financial wellbeing index, 2016-2022
    • …and concerns over inflation are coming to the fore
    • Alcoholic drinks’ discretionary nature puts them in the firing line for cutbacks
    • Patterns from the 2008-09 recession will not necessarily be repeated
    • Shifts between channels will undermine category value
    • Trading down within the retail sector is anticipated
      • Figure 20: Those saying that they would switch to less expensive alcoholic drinks if they needed to save money, by consumers’ description of their financial situation, 2022
    • Opportunities remain for premium products
    • Alcohol moderation trend continues
    • Consumers’ increased health-consciousness could undermine sales of alcoholic drinks
    • Ageing population will have divergent effects for alcoholic drinks
  8. Regulatory and Legislative Changes

    • Alcohol duty freeze offers relief to the category
    • More governments impose minimum unit pricing on alcoholic drinks
    • Companies adopt calorie labelling ahead of potential regulations
  9. Market Share

    • Beer brands account for eight of the top 20 alcoholic drinks brands at retail
    • Beer brands lose retail sales over 2021/22 due to the on-trade’s revival
    • Peroni benefits from shoppers trading up
      • Figure 21: UK retail value and volume sales of the top 20 alcoholic drinks brands, 2019/20-2021/22
    • Wine brands see modest retail sales growth in 2021/22
    • Casillero del Diablo benefits from New Zealand wine shortage
    • Flavoured variants drive growth for Jack Daniel’s and Captain Morgan
  10. Launch Activity and Innovation

    • Low/no-alcohol launches continue
    • Leading beer brands launch non-alcoholic versions
    • Top brands launch low/no-alcohol flavoured ciders in early 2022
    • Gordon’s unveils RTD version of its zero-alcohol variant
    • Beer brands extend into hard seltzers
    • Brands explore lower-alcohol options
    • Heineken aims to attract younger users with Heineken Silver
    • Niche and leading brands launch lower-alcohol ‘spirit drinks’
    • Absolut reduces the ABV of some of its flavoured vodkas
    • Brands expand into new areas, blurring the boundaries between drinks
    • WKD launches energy drink-inspired RTDs
    • Happy J’s alcoholic kombuchas should appeal to health-conscious consumers
    • Dessert-inspired and fruit flavour trends continue
    • Leading and niche brands continue to explore dessert/sweet treat flavours
      • Figure 22: Examples of alcoholic drinks launches with dessert/sweet treat-inspired flavours, 2021
    • Fruit flavours remain an ongoing trend
      • Figure 23: Examples of spirits launches with fruit flavours, 2021
      • Figure 24: Tarquin’s Raspberry & Rhubarb Gin references provenance on-pack, 2021
    • Alcoholic drinks brands take action on the environment
    • Leading and niche brands use recycled glass for bottles
      • Figure 25: Bush Rum Co with 100% recycled glass bottle, 2021
    • Various brands switch to lighter weight bottles to reduce glass use
    • Multiple brands look to reduce their carbon emissions
    • Smaller players launch alcoholic drinks with a focus on their sustainable practices…
    • …and support conservation projects
    • Retailers explore refill schemes for alcoholic drinks, with varying levels of success
    • Trend for using surplus ingredients continues
      • Figure 26: Examples of alcoholic drinks made using surplus ingredients, 2021
  11. Advertising and Marketing Activity

    • Advertising spend rises in 2021
    • Spirits and liqueurs continue to receive the largest share of advertising spend
      • Figure 27: Total above-the-line, online display and direct mail advertising expenditure on alcoholic drinks^, by category, 2019-22 (sorted by 2021)
    • Diageo continues to lead on alcoholic drinks advertising in 2021
    • Adverts for Gordon’s non-alcoholic variant emphasise the treat aspects
    • Adverts for Gordon’s standard and flavoured ranges focus on occasions
    • Johnnie Walker offers classes through its new events venue
    • Smirnoff focuses on mixed drinks and cocktails
    • Heineken creates a ‘virtual beer’ in an ironic nod to the Metaverse
    • Brands continue to celebrate togetherness and post-COVID reunions
    • Alcoholic drinks brands promote their sustainable credentials
    • Beer brands are especially active in promoting their care for the environment
    • Cider brand calls out how it “goes the extra Inch’s” on the environment
    • Wine brands look to underline the need to support the environment
    • Nielsen Ad Intel coverage
  12. Types of Alcoholic Drinks Drunk

    • Eight in 10 adults drink alcoholic drinks
    • Income squeeze to erode sales of alcoholic drinks
      • Figure 28: Types of alcoholic drink drunk, by category, by consumers’ description of their financial situation, 2022
    • Beer and still wine lead on usage
      • Figure 29: Types of alcoholic drink drunk, 2022
    • Lager will fare better than other beer types amid income squeeze
    • Ageing UK population to have divergent effects on alcoholic drinks
    • Financially affluent and over-45s are the most frequent drinkers
      • Figure 30: Usage frequency for alcoholic drinks (nets), by age and consumers’ description of their financial situation, 2022
  13. Expected Reactions to the Income Squeeze

    • Majority of buyers would stop or reduce alcohol intake to save money
      • Figure 31: Expected reactions to the income squeeze regarding buying of alcoholic drinks, 2022
    • Under-35s are particularly prepared to stop buying alcohol
    • Opportunities both for value and premium options
    • Lower-priced products must make the cost savings tangible to encourage switching
    • Premium variants can align with a ‘drink less but better’ mindset
    • Explore smaller formats to maintain sales amid income squeeze
  14. Selected Consumer Interactions with Alcoholic Drinks Brands

    • Point of sale is the most crucial to driving alcoholic drinks sales
      • Figure 32: Selected consumer interactions with alcoholic drinks brands, 2022
    • Place positive ratings from review websites/apps into shoppers’ paths at point of sale
      • Figure 33: Examples of POS display and on-shelf labelling highlighting Vivino ratings at Sainsbury’s, Didcot, Oxfordshire, 2021
    • Social media must be used in conjunction with other forms of marketing
    • Social media marketing is more rewarding for alcoholic drinks with a younger bias
  15. Behaviours Relating to the Income Squeeze and Alcoholic Drinks

    • Exclusive drinks can support on-trade sales even amid income squeeze
      • Figure 34: Behaviours relating to the income squeeze and alcoholic drinks, 2022
    • Money concerns make many people less willing to try new drinks
    • Established brands should make a virtue of continuity and familiarity
    • Offer sampling opportunities and miniature formats to drive trial of new brands and flavours
    • Shared discounts can harness the power of recommendations
  16. Behaviours Relating to Alcoholic Drinks

    • The wow factor is especially valued by under-35s
      • Figure 35: Behaviours relating to alcoholic drinks, 2022
    • Visually impressive drinks can drive sales even amid the income squeeze
    • Brands and retailers explore colour-changing and glitter effects over 2018-21
      • Figure 36: Examples of alcoholic drinks launches with visual effects, 2020-21
    • Explore do-it-yourself formats for visually impressive drinks
    • Help and guide consumers to serve drinks in an impressive way at home
    • Visual effects can generate a more exciting image around L/N/R alcohol versions
    • Over a quarter are concerned about drinks’ environmental impact, but not all act on this
    • Brands must put their good environmental credentials in shoppers’ path
    • Demonstrate why ethical attributes are worth paying more for
    • Spell out environmental impact to help people feel that they are making a difference
      • Figure 37: Examples of alcoholic drinks brands highlighting environmental credentials on-pack, 2020-21
  17. Attitudes towards Alcoholic Drinks

    • ‘Support your local pub’ messages can help on-trade to maintain sales during income squeeze
      • Figure 38: Attitudes towards alcoholic drinks, 2022
    • Shout about local sourcing
    • Under-35s are most likely to link self-image with knowledgeability about alcoholic drinks
    • Push a ‘share your knowledge’ message in marketing to drive purchase
  18. Appendix – Data Sources, Abbreviations and Supporting Information

    • Abbreviations
    • Consumer research methodology
  19. Appendix – Forecast Methodology

    • Market forecast and prediction intervals
      • Figure 39: Market forecast and prediction intervals for total value sales of alcoholic drinks, 2022-26
      • Figure 40: Market forecast and prediction intervals for total volume sales of alcoholic drinks, 2022-26-
    • Market drivers and assumptions
    • Forecast methodology
  20. Appendix – Advertising and Marketing Activity

      • Figure 41: Total above-the-line, online display and direct mail advertising expenditure on alcoholic drinks^, by top 10 advertisers, 2019-22 (sorted by 2021)
  21. Appendix – Types of Alcoholic Drinks Drunk

      • Figure 42: Usage of beer, by type, by consumers’ description of their financial situation, 2022
      • Figure 43: Usage frequency for alcoholic drinks, 2022

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