2023
9
UK Alcoholic Drinks Review Market Report 2023
2023-08-01T04:06:49+01:00
OX1156449
2195
165422
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Report
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"Marketing themed around at-home occasions, further NPD in smaller formats, plus highlighting the number of servings in larger formats, should help brands to support category sales during the current cost…

UK Alcoholic Drinks Review Market Report 2023

£ 2,195 (Excl.Tax)

Description

Stay ahead of the curve and future-proof your business with Mintel’s UK Alcoholic Drinks Review Market Report 2023. Our full report is packed with consumer-led market intelligence, the latest alcoholic drinks industry trends and consumer behaviours affecting your business. Get a 360° view of the alcoholic drinks industry including market size, share and forecasted growth to help you align your business strategy with the needs of your audience.

Below, we’ve handpicked the key insights analysed in the full report and summarised the core topics.

Topics Analysed in this Report

  • The impact of the COVID-19 pandemic and cost of living crisis on value and volume sales of the alcoholic drinks industry in the on- and off-trade.
  • The potential impact of the impending changes to alcohol duty rates on people’s alcoholic drinks buying habits.
  • Trends in launch activity, and opportunities for further innovation in the alcoholic drinks industry.
  • Consumers reasons for drinking alcohol and their preferences when buying alcoholic drinks.

Alcoholic Drinks Industry Outlook

The ongoing cost of living crisis will erode volume sales as people continue to reduce or limit their discretionary spending. Increased alcohol duties from August onwards will drive up value sales, although will be tempered by consumers trading down and switching to low- and no-alcohol drinks.

  • Alcoholic drinks market size: The alcoholic drinks industry grew by 12.4% over 2017-22.

Find the total UK retail sales, product launches and forecast for each segment of the alcoholic drinks industry in the full report, alongside an expert analysis of segment performance.

Alcoholic Industry Trends and Opportunities

Continued interest in craft and premium drinks

The COVID-19 pandemic has given a boost to the buzz around craft and premium alcoholic drinks which has sustained during the cost of living crisis. This suggests that opportunities remain for these products to succeed despite the economic squeeze, particularly for premium products sold at retail to succeed as an alternative to going out.

  • Alcoholic drinks industry opportunity: 27% of alcohol buyers say that they are buying more craft or premium alcoholic drinks compared to before the pandemic, rising to 41% among 18-34 year olds.

Rekindling association between alcohol and relaxation

Mining alcoholic drinks’ strong associations with relaxation is particularly relevant in the current climate. Marketing centred around occasions widely seen as relaxing, such as evenings in watching television, should work well here. Cross-promotions with snack brands and NPD in products themed around particular TV programmes should help to strengthen these associations.

  • Alcoholic drinks industry opportunity: 60% of consumers drink alcoholic drinks to relax.

To learn how to connect with your audience, purchase our full UK Alcoholic Drinks Review Market Report 2023.  Discover lucrative innovation opportunities to help your business grow during times of financial uncertainty.

Leading Brands in the Alcoholic Drinks Industry

Stella Artois, Smirnoff, Budweiser, Gordon’s, Hardys, Foster’s, Carling, Jack Daniel’s, San Miguel, Yellow Tail.

Additional Features Included with Your Purchase

  • Interactive Data Book: This gives you unlimited access to a consumer confidence tracker that is segmented into 25 different demographic categories.
  • Different Digital Formats: PDF for conveniently sharing with your team, PowerPoint for quickly including in your presentation, as well as Word and Excel.
  • Mintel’s Clients Portal: Our portal offers instant access to actionable analysis and trends pieces relevant to your industry that are published almost daily. You can also browse for more market research reports.

Expert Insights from a Drinks Analyst

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

Marketing themed around at-home occasions, further NPD in smaller formats, plus highlighting the number of servings in larger formats, should help brands to support category sales during the current cost of living crisis. Emotion-led marketing mining alcoholic drinks’ strong relaxing, mood boosting and treat associations should also help to drive purchase.”

Alice Baker

Alice Baker
Senior Research Analyst

Table of Contents

  1. Overview

      • Key issues covered in this Report
        • Products covered in this Report
        • Executive Summary

            • The five-year outlook for alcoholic drinks
              • Figure 1: Category outlook, 2023-27
            • The market
              • Volatile value and volume performance for alcoholic drinks over 2017-22
                • Higher inflation with declining volume sales projected for 2023-27
                  • Figure 2: Market size and forecast for value sales of alcoholic drinks, 2017-27
                • On-trade regains ground from off-trade in 2022, but remains below pre-pandemic level
                  • Figure 3: UK value sales of alcoholic drinks, by channel, 2020-22
                • Beer and cider were star performers in 2022
                  • Figure 4: UK value sales of alcoholic drinks, by segment, 2020-22
                • Changes to alcohol duties will drive up prices for alcoholic drinks
                  • Companies and brands
                    • Mid-market beer and cider brands lose out to premium brands and to own-label
                      • Figure 5: Top 20 brands’ sales in the UK retail alcoholic drinks market, 2021/22-2022/23
                    • Further NPD activity in low-/no-alcohol variants
                      • Companies take action to boost the sustainability of their packaging
                        • Alcohol brands look to harness the power of the wow-factor
                          • Advertising on alcoholic drinks rises above pre-pandemic levels in 2022
                            • The consumer
                              • Overall alcoholic drinks usage rises despite income squeeze
                                • Figure 6: Usage of alcoholic drinks, by category, 2023
                              • Ageing UK population will erode sales of drinks like cider, spirits and RTDs
                                • Figure 7: Usage of alcoholic drinks, by type, by age group, 2023
                              • Wanting to relax and treat oneself are the leading reasons for drinking alcohol
                                • Figure 8: Reasons for drinking alcohol, 2023
                              • Familiar flavour is the leading purchase factor for alcoholic drinks, with low brand loyalty
                                • Figure 9: Priorities when buying alcoholic drinks, 2023
                              • Income squeeze prompts cutbacks in both retail and the on-trade
                                • Figure 10: Behaviours relating to alcoholic drinks, 2023
                              • Two thirds expect to change their buying if duty rates change, but all may not follow through
                                • Figure 11: Expected reactions to changes to alcohol duty rates, 2023
                            • Issues and Insights

                              • Marketing messages themed around at-home occasions and NPD in smaller formats should help brands navigate the income squeeze
                                • Alcoholic drinks’ relaxing associations are especially topical now
                                  • Find ways to make products’ flavour profiles tangible to consumers
                                  • Market Size and Performance

                                    • Volatile value and volume performance for alcoholic drinks over 2017-22
                                      • Volume and value sales grow in 2022
                                        • Figure 12: Total value and volume sales of alcoholic drinks, 2017-22
                                    • Market Forecast

                                      • Volume sales to decline in 2023, some recovery over 2024-25
                                        • Figure 13: Category outlook, 2023-27
                                      • Higher inflation with declining volume sales projected for 2023-27
                                        • Income squeeze will drive down volume sales in 2023, while higher alcohol duties will boost average prices
                                          • Volume sales growth should pick up over 2024-25 as consumer finances improve
                                            • Alcohol moderation trend and ageing UK population will hinder sales over 2026-27
                                              • Figure 14: Market size and forecast for value sales of alcoholic drinks, 2017-27
                                              • Figure 15: Market size and forecast for volume sales of alcoholic drinks, 2017-27
                                            • Learnings from the last income squeeze
                                              • Patterns of 2008-13 will not necessarily be replicated
                                                • Figure 16: Growth in total value and volume sales of alcoholic drinks, 2008-14
                                              • Forecast methodology
                                              • Market Segmentation and Channels to Market

                                                • On-trade regains ground from off-trade in 2022, but remains short on pre-pandemic
                                                  • Figure 17: UK value sales of alcoholic drinks, by segment and channel, 2020-22
                                                  • Figure 18: UK volume sales of alcoholic drinks, by segment and channel, 2020-22
                                                • Inflation increases in both the off- and on-trade in 2022
                                                  • On-trade sees improved performance in Q1 2023, but fails to reach pre-pandemic levels
                                                    • Off-trade benefits more than on-trade from the Coronation
                                                      • Beer and cider outperform other alcoholic drinks in the on-trade in 2022
                                                        • On-trade wine sales grow more slowly than beer or cider in 2022, but do well in Q1 2023
                                                        • Market Drivers

                                                          • Inflation will continue to eat into consumer spending power over the course of 2023
                                                            • Further interest rates increases will hit mortgage-holders
                                                              • High inflation and rising interest rates will compound the impact of the slowing recovery
                                                                • Inflation in alcohol runs slower than overall inflation in 2022
                                                                  • Figure 19: RPI inflation for all items and for beer, wine and spirits, 2022-23
                                                                • Prices edge upwards in 2023, with alcohol duty rates changes to add momentum here
                                                                  • Consumer spending power will be curbed
                                                                    • Low unemployment is helping underpin wage growth
                                                                      • Consumers’ financial wellbeing has fallen from the highs of 2021…
                                                                        • Figure 20: Household financial wellbeing index, 2016-23
                                                                      • …and most people are feeling the effects of price rises
                                                                        • Income squeeze hinders sales in both the off- and on-trade in 2022
                                                                          • Switching between channels and products counteracts inflation over 2022-23
                                                                            • Premium variants sold at retail benefit as alternative to going out
                                                                              • Cost-of-living crisis adds momentum to the alcohol moderation trend
                                                                                • Ageing population will hinder some alcoholic drinks types, as well as on-trade sales
                                                                                  • Figure 21: Usage of alcoholic drinks, by type, by age group, 2023
                                                                                • Cost pressures on the industry drive an increase in pub closures in 2022
                                                                                • Regulatory and Legislative Changes

                                                                                  • Changes to alcohol duties will drive up prices for alcoholic drinks
                                                                                    • Duty freeze to end in August 2023
                                                                                      • Shift to setting alcohol duties by ABV will prompt switching between and within categories
                                                                                        • Increase to draught relief is intended to help the pub sector
                                                                                          • Minimum Unit Pricing in Scotland drives down sales of some alcoholic drinks while boosting others
                                                                                            • Figure 22: Net growth/reduction in volumes of pure alcohol sold in the off-trade in Scotland after MUP was introduced, by alcoholic drink type, 2018-21
                                                                                          • All UK nations now set to introduce DRS in 2025
                                                                                            • Scotland delays DRS and excludes glass
                                                                                              • England, Wales and Northern Ireland all plan to introduce DRS in 2025
                                                                                                • HFSS regulations boost alcoholic drinks’ in-store visibility
                                                                                                • Market Share

                                                                                                  • Mid-market beer and cider brands lose out to premium brands and to own-label
                                                                                                    • Figure 23: UK retail value and volume sales of the top 20 alcoholic drinks brands, 2021/22-2022/23
                                                                                                • Launch Activity and Innovation

                                                                                                  • Further activity in low-/no-alcohol variants
                                                                                                    • Mainstream and craft beer brands offer low-/non-alcoholic versions
                                                                                                      • Figure 24: Examples of low-/no-alcohol beer launches, 2022
                                                                                                    • Alcohol-free wine launches emphasise flavour complexity
                                                                                                      • Figure 25: Examples of alcohol-free wine launches, 2022
                                                                                                    • Old Mout expands its alcohol-free range
                                                                                                      • Bacardi launches on-trade exclusive spirits alternatives
                                                                                                        • Brands continue to explore lower alcohol options
                                                                                                          • Figure 26: Examples of lower alcohol launches, 2022-23
                                                                                                        • Companies take action to boost the sustainability of their packaging
                                                                                                          • Wine and spirits companies explore recycled glass for bottles
                                                                                                            • Figure 27: Examples of alcoholic drinks launches with recycled glass bottles, 2022
                                                                                                          • Waitrose removes sleeves from wine bottles and unveils redesigned cork
                                                                                                            • Various brands explore alternatives to standard glass bottles
                                                                                                                • Figure 28: Examples of alcoholic drinks launches in cardboard bottles, 2022-23
                                                                                                                • Figure 29: Bottleproof Cocktails in cardboard bottles on display at IFE London, March 2023
                                                                                                              • Wine brands explore both lightweight packaging and use of salvaged materials
                                                                                                                • Companies highlight their commitments to sustainability throughout products’ lifecycles
                                                                                                                  • Figure 30: BrewDog and Budweiser call out their environmental credentials on-pack, 2022
                                                                                                                • Trend in use of surplus ingredients continues
                                                                                                                  • Figure 31: Example of BrewDog’s bad Beer Vodka range, 2022
                                                                                                                • Retailers continue to explore refill schemes
                                                                                                                  • Sweet and savoury flavour trends continue
                                                                                                                    • Beer brands look to expand their audience through sweet treat-inspired flavours
                                                                                                                      • Figure 32: Examples of beer launches with sweet treat-inspired flavours, 2023
                                                                                                                    • Sweet treat flavours in cider and liqueurs should appeal to their young key users
                                                                                                                      • Figure 33: Examples of cider and liqueur launches with sweet treat-inspired flavours, 2022/23
                                                                                                                    • Savoury flavours offer differentiation
                                                                                                                      • Redchurch links up with Byron restaurants on pickle beer
                                                                                                                        • Craft spirits brands experiment with vegetable ingredients
                                                                                                                          • Figure 34: Portobello Road Distillery British Asparagus Vodka, UK, 2022
                                                                                                                        • Alcohol brands look to harness the power of the wow factor
                                                                                                                          • ‘Snow-globe’ gin liqueurs trend continues
                                                                                                                            • Figure 35: Examples of ‘snow-globe’ gin liqueurs launches, 2022
                                                                                                                          • Wine and beer brands look to get in on the glittery drinks trend
                                                                                                                            • Figure 36: Examples of glittery alcoholic drinks launches, 2022
                                                                                                                          • Easter is an under-utilised occasion for alcoholic drinks
                                                                                                                            • Figure 37: Gravity Drinks’ ‘Easter egg’ bottle, 2023
                                                                                                                          • Multiple brands launch products for the Jubilee and Coronation
                                                                                                                            • Jubilee and Coronation launches focus on provenance…
                                                                                                                              • …and packaging aesthetics
                                                                                                                                • Figure 38: Examples of alcoholic drinks launches for the Platinum Jubilee and Coronation, 2022-23
                                                                                                                              • Cider and RTDs brands look to tap into the Royal celebrations
                                                                                                                                • Figure 39: Lambrini marks the Platinum Jubilee with special label design, 2022
                                                                                                                              • Majestic revives its ‘Lock It In’ subscription
                                                                                                                              • Advertising and Marketing Activity

                                                                                                                                • Advertising on alcoholic drinks in 2022 rises above pre-pandemic levels
                                                                                                                                  • Outdoor advertising regains its leading position in 2022
                                                                                                                                    • Digital advertising spending soars over 2019-22
                                                                                                                                      • Figure 40: Total above-the line, online display and direct mail advertising expenditure on alcoholic drinks, by media type, 2019-23
                                                                                                                                    • Diageo continues to lead on advertising spend in 2022…
                                                                                                                                      • Figure 41: Total above-the line, online display and direct mail advertising expenditure on alcoholic drinks, by advertiser, 2020-23
                                                                                                                                    • Various alcohol brands celebrate friendship
                                                                                                                                      • Companies look to appeal to younger adults
                                                                                                                                        • Heineken Silver references idealised social media representations and the metaverse
                                                                                                                                          • Cider brands use cultural references familiar to younger adults…
                                                                                                                                            • …and attend music festivals
                                                                                                                                              • Vins de Provence looks to engage the next generation of rosé drinkers
                                                                                                                                                • TikTok cocktail video offers pointers for alcohol brands
                                                                                                                                                  • Alcohol brands turn their focus to travel in 2022
                                                                                                                                                    • Nielsen Ad Intel coverage
                                                                                                                                                    • Usage of Alcoholic Drinks

                                                                                                                                                      • Overall alcoholic drinks usage rises slightly despite income squeeze
                                                                                                                                                        • Figure 42: Usage of alcoholic drinks, by category, 2023
                                                                                                                                                      • Beer and still wine are the most widely drunk types
                                                                                                                                                        • Figure 43: Usage of alcoholic drinks, by type, 2023
                                                                                                                                                      • Improved on-trade performance drives rise in beer usage
                                                                                                                                                        • Spirits and liqueurs benefit from the at-home cocktails trend
                                                                                                                                                          • Ageing UK population will erode sales of some alcoholic drinks; others will be better insulated
                                                                                                                                                            • Figure 44: Usage of alcoholic drinks, by type, by age group, 2023
                                                                                                                                                        • Usage Frequency for Alcoholic Drinks

                                                                                                                                                          • Nearly seven in ten adults drink alcohol once a week or more
                                                                                                                                                            • Figure 45: Usage frequency for alcoholic drinks, by how people describe their financial situation, 2023
                                                                                                                                                          • Income squeeze will continue to hinder category sales over 2023-24
                                                                                                                                                            • Over-55s are the most frequent drinkers
                                                                                                                                                              • Figure 46: Usage frequency for alcoholic drinks, by age group, 2022
                                                                                                                                                          • Reasons for Drinking Alcohol

                                                                                                                                                            • Wanting to relax is the leading reason for drinking alcohol
                                                                                                                                                              • Figure 47: Reasons for drinking alcohol, 2023
                                                                                                                                                            • Use cross-promotions with snack brands to drive associations with relaxing at home
                                                                                                                                                              • Figure 48: Instagram post by I Heart Wines as part of its ‘Movie Nights’ campaign, 2021
                                                                                                                                                              • Figure 49: Instagram post by Gordon’s promoting its collaboration with Doughnut Time, 2023
                                                                                                                                                            • Further explore TV tie-in products
                                                                                                                                                              • Half of drinkers drink alcohol to treat themselves
                                                                                                                                                                • Promote alcoholic drinks as enhancing at-home occasions
                                                                                                                                                                  • Smaller bottles and RTDs can help to make wine and spirits more affordable treats
                                                                                                                                                                    • Figure 50: In-store display by Gordon’s comparing prices for its original and RTD version at Sainsbury’s Battersea Park Road, 2022
                                                                                                                                                                  • Promote premium variants as offering more of a treat
                                                                                                                                                                  • Priorities when Buying Alcoholic Drinks

                                                                                                                                                                    • Familiar flavour is the leading purchase factor for alcoholic drinks
                                                                                                                                                                      • Figure 51: Priorities when buying alcoholic drinks, 2023
                                                                                                                                                                    • Offer flavour pointers at point of sale both online and in-store
                                                                                                                                                                      • Publicise the range of flavour profiles available within a particular category
                                                                                                                                                                        • Figure 52: Asda offers a guide to different beer types, 2022
                                                                                                                                                                      • Recommendations based on general flavour preferences and previous purchases should appeal
                                                                                                                                                                        • Cost of living crisis adds pressure on companies to be continually offering promotions
                                                                                                                                                                          • Figure 53: Views of selected attributes as either essential or preferred (netted), by how people describe their financial situation, 2023
                                                                                                                                                                        • Brand loyalty is low in alcoholic drinks
                                                                                                                                                                          • Cost of living crisis undermines brand loyalty; changes to duty rates set to do so also
                                                                                                                                                                            • Need for brands to prove their USP
                                                                                                                                                                              • Pandemic’s boost to people’s knowledgeableness boost brand loyalty, though not just to mainstream brands
                                                                                                                                                                                • Environmental factors exert only a minority influence on alcohol buying
                                                                                                                                                                                  • Brands must offer other points of appeal
                                                                                                                                                                                    • Concentrate on tangible aspects when looking to prove environmental commitments
                                                                                                                                                                                    • Behaviours Relating to Alcoholic Drinks

                                                                                                                                                                                      • Income squeeze prompts cutbacks in both retail and the on-trade
                                                                                                                                                                                        • Figure 54: Behaviours relating to alcoholic drinks, 2023
                                                                                                                                                                                      • A third of buyers have not cut back
                                                                                                                                                                                        • Over-55s are less likely to have cut back
                                                                                                                                                                                          • Highlight the price per serving, especially on larger formats
                                                                                                                                                                                            • Figure 55: Examples from the food and drink and household care categories of brands spelling out the number of servings/uses per pack, 2022-23
                                                                                                                                                                                          • Stocking products not available in supermarkets and focus on local community should help pubs to drive sales amid income squeeze
                                                                                                                                                                                            • Financial concerns prompt a third of buyers to switch to own-label
                                                                                                                                                                                              • Brands must prove they offer something different to own-label
                                                                                                                                                                                                • Quality awards can help to give own-label alcoholic drinks an edge
                                                                                                                                                                                                  • Figure 56: Aldi flavoured gin highlights its quality award on-pack, 2022
                                                                                                                                                                                                • Craft/premium variants have benefited from the COVID-19 pandemic
                                                                                                                                                                                                  • Potential for craft/premium players to retain sales despite the income squeeze
                                                                                                                                                                                                  • Expected Reactions to Changes to Alcohol Duty Rates

                                                                                                                                                                                                    • Two thirds expect to change their alcohol buying behaviours, but may not all follow through
                                                                                                                                                                                                      • Figure 57: Expected reactions to changes to alcohol duty rates, 2023
                                                                                                                                                                                                    • Cheaper drinks types look set to benefit
                                                                                                                                                                                                      • Cider could gain sales at the expense of wine, but further innovation needed on lower-ABV products
                                                                                                                                                                                                        • Champagne must focus on a wider range of occasions in order to avoid losing out
                                                                                                                                                                                                          • RTDs are well-placed to benefit from changes to alcohol duties
                                                                                                                                                                                                          • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                                                                              • Abbreviations
                                                                                                                                                                                                                • Consumer research methodology
                                                                                                                                                                                                                • Appendix – Forecast Methodology

                                                                                                                                                                                                                  • Market forecast and prediction intervals
                                                                                                                                                                                                                    • Figure 58: Market forecast and prediction intervals for total value sales of alcoholic drinks, 2017-27
                                                                                                                                                                                                                    • Figure 59: Market forecast and prediction intervals for total volume sales of alcoholic drinks, 2017-27
                                                                                                                                                                                                                  • Market drivers and assumptions
                                                                                                                                                                                                                    • Forecast methodology
                                                                                                                                                                                                                    • Appendix – Market Segmentation and Channels to Market

                                                                                                                                                                                                                        • Figure 60: Value and volume sales of alcoholic drinks, by off- and on-trade, 2017-22
                                                                                                                                                                                                                    • Appendix – Market Drivers

                                                                                                                                                                                                                        • Figure 61: RPI inflation for all items and for beer, wine and spirits, 2019-23

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