2020
9
UK Attitudes towards Premium Label Alcoholic Drinks Market Report 2020
2020-10-06T15:36:02+01:00
OX989494
2195
125604
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Report
en_GB
“Sales of alcoholic drinks have been hit hard by the COVID-19 pandemic, and encouraging consumers to pay more for drinks will be challenging during a recession. It will be ever…

UK Attitudes towards Premium Label Alcoholic Drinks Market Report 2020

£ 2,195 (Excl.Tax)

Report Summary

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

Spending on alcoholic drinks is vulnerable to the financial position of category buyers worsening, as 50% say they would cut back on their spending on alcoholic drinks under such circumstances. A further 28% say they would stop buying alcoholic drinks altogether. The role of alcoholic drinks as inherently non-essential underpins this.

Quickly Understand

  • The impact of COVID-19 on the premium alcohol market and consumer behaviours?
  • Premium cues being used in the latest new product launches and consumer interest in different product features?
  • Factors most important to consumers in making an alcoholic drink premium?
  • How consumers respond to a worsening financial position in their purchase?
  • Reasons for buying and consumer behaviour surrounding premium alcoholic drinks?

Covered in this report

Alcohol market, alcohol market size, alcohol consumer, alcohol statistics, alcoholic drink purchasing decision and alcohol analysis.

Brands mentioned includes

Gin brands: London N°1, The Spencerfield Spirit Company, Sipsmith
Small batch launches: Hinch the Time, Keeper’s, Wild Turkey
Limited edition alcohol launches: Baileys, Bloom Gin, Bombay Sapphire
Collection expansions: Jack Daniels, Bacardi, Glenfiddich
Local alcohol brands: Cotswolds Distillery, Tarquin’s Gin, Lakes Distillery
Local sourced ingredients brands: Keepr’s, Harrogate Slingsby
Premium production: Kirkland Signature, Merser Rum
Cask and barrel production: Jura Whisky, Jagermeister
Premium supermarket own-label alcohol: Asda, Morrisons, Sainsbury’s, Waitrose
Grocery discounters own-label alcohol: Lidl, Aldi
New flavours: Beefeater, Koppaberg, Gordon’s, J.J Whitley, Brewdog, Absolut
Low alcohol drinks: Seedlip, Spirits of Virtue, ISH Spirits

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.

Sales of alcoholic drinks have been hit hard by the COVID-19 pandemic, and encouraging consumers to pay more for drinks will be challenging during a recession. It will be ever more important for brands to give drinkers reasons to pay higher prices, including through communicating superior taste, featuring ‘craft’ cues and promoting buying for special occasions/celebrations, as a gift or as a ‘savvy’ luxury.

Richard Caines
Senior Food & Drink Analyst

Table of Contents

  1. Overview

    • What you need to know
    • Key issues covered in this Report
    • Report coverage
    • COVID-19: Market context
    • Economic and other assumptions
  2. Executive Summary

    • Impact of COVID-19 on the premium alcohol market
      • Figure 1: Short-, medium- and long-term impact of COVID-19 on the premium alcohol market, 14 August 2020
    • The alcoholic beverage market
    • Average consumer drinking less alcohol
    • A third moderating their alcohol intake
    • Most people’s financial position still healthy or OK…
    • …but increasing concerns about the coming year
    • Companies and brands
    • Focus on small alcohol production runs and scarcity remain popular themes in premium NPD
    • Limited editions look to spark interest
    • Focus on provenance and local ingredients in premium spirits
    • Emphasising extra care in production continues to be explored in NPD
    • The consumer
    • Superior taste crucial in premium image
      • Figure 2: Factors most important in making an alcoholic drink premium, June 2020
    • Spirits enjoy the biggest emphasis on buying premium variants
      • Figure 3: Buying of premium alcoholic drinks in the last 12 months, by broad drinks category, June 2020
    • Special occasions and celebrations are big reasons to purchase premium drinks
      • Figure 4: Reasons for buying premium alcoholic drinks in the last 12 months, June 2020
    • Recession poses a big risk to drinks spending
      • Figure 5: Ways in which people would cut back on their spending on alcoholic drinks, June 2020
    • Limited editions interest three in 10, lower-calorie variants appeal more than lower-alcohol
      • Figure 6: Interest in features of premium alcoholic drinks, June 2020
    • Suitability for gifting important for premium alcoholic drinks, premium versions a good way to extend brands
      • Figure 7: Behaviours related to buying premium alcoholic drinks, June 2020
  3. COVID-19 and Premium Alcoholic Drinks

    • Impact on the market
    • Spending on premium alcoholic drinks under pressure
    • Government offers help to on-trade…
    • …while also launching new obesity strategy
    • Targeting the older population, more insulated from the recession, is timely
    • The consumer
    • Consumers expect to spend less than usual on alcoholic drinks
    • Recession triggered by COVID-19 poses a big risk to drinks spending
    • Off-trade gains from more drinking at home
    • Home entertaining will also benefit sales through retail
    • Pandemic and aftermath will increase focus on health
    • Companies and brands
    • Local premium drinks brands should tap interest in buying local
    • Premium own-label alcoholic drinks and discounters in good position to benefit
    • Four in 10 try to limit time in-store, boost to online shopping
  4. Issues and Insights

    • Communicating superior taste pivotal in encouraging buying of premium alcoholic drinks
    • Operators must go beyond flavour descriptions
    • Online offers a new route to targeted sampling
    • Premium versions and limited editions hold potential for brand extension for alcoholic drinks brands
    • Premium versions hold strong potential for popular mass-market brands
    • Encouraging trading up will be increasingly challenging
    • Untapped potential for limited editions
    • Special occasions and gifting will be more important than ever
    • Focus on special occasions will drive premium drinks purchasing
    • Home entertaining an important marketing theme for premium drinks brands
  5. The Market – What You Need to Know

    • Average consumer drinking less alcohol
    • A third moderating their alcohol intake
    • Most people’s financial position still healthy or OK
    • Increase in concerns about finances over the coming year
    • Ageing population poses challenges for premium drinks
    • Fewer 20-34 year olds will not help alcoholic drinks
  6. Market Drivers

    • Impact of COVID-19 on premium alcoholic drinks
      • Figure 8: Short-, medium- and long-term impact of COVID-19 on premium alcoholic drinks, 14 August 2020
    • Number of factors likely to hit volume consumption of alcohol
    • Average consumer drinking less alcohol
    • A third of adults moderate their alcohol intake, one in five abstain
    • Focus on health and saving money likely to increase post-COVID-19
      • Figure 9: Reasons for limiting/reducing alcohol usage, April 2019
    • Average alcoholic drinks prices keep rising
      • Figure 10: RPI indexed annual change for alcoholic drink prices versus all items, 2010-20
    • Alcohol duty cuts linked to increase in alcohol-related deaths
      • Figure 11: UK excise duty rates for alcoholic drinks, 2009-19
    • Government balances support for economy and health push
    • Most people’s financial position still healthy or OK
      • Figure 12: Trends in how consumers describe their financial situation, December 2014-July 2020
      • Figure 13: Consumer sentiment for the coming year, July 2020
    • Ageing population poses challenges for premium drinks
      • Figure 14: Trends in the age structure of the UK population, 2014-24
  7. Companies and Brands – What You Need to Know

    • Focus on small production runs and scarcity remain popular themes in premium NPD
    • Limited editions look to spark interest
    • Focus on provenance and local ingredients in premium spirits
    • Emphasising extra care in production adds premium cues
    • Premium own-label products adding to competition
    • Grocery discounters offer premium quality for less
    • Flavour innovation a major part of NPD in premium drinks
    • Increased activity in low- and non-alcoholic drinks
  8. Launch Activity and Innovation

    • Focus on small production runs and scarcity premium themes
    • Numerous small-batch launches in spirits
      • Figure 15: Examples of small-batch gin and gin liqueur launches in the UK premium alcoholic drinks market, 2020
      • Figure 16: Examples of other small-batch launches in the UK premium alcoholic drinks market, 2019/20
    • Limited editions look to spark interest
      • Figure 17: Examples of limited edition launches in the UK premium alcoholic drinks market, 2019/20
    • Brands also focus on series of launches and extensions
    • Series and collections a theme in spirits
    • Big brands extend drinks offers
      • Figure 18: Examples of launches as part of collections or extensions to ranges in the UK premium alcoholic drinks market, 2019/20
    • Focus on provenance and local ingredients in premium spirits
      • Figure 19: Examples of launches in the UK premium alcoholic drinks market focused on provenance, 2020
      • Figure 20: Examples of launches in the UK premium alcoholic drinks market making locally sourced ingredients claims, 2020
    • Emphasising extra care in production adds premium cues
    • Focusing on distillation and blending process
      • Figure 21: Examples of launches of products highlighting extra care in production in the UK premium alcoholic drinks market, 2019/20
    • Referencing casks used and ageing for longer
      • Figure 22: Examples of launches in the UK premium alcoholic drinks market referencing casks/barrels, 2020
    • Premium own-label products adding to competition
      • Figure 23: Examples of premium own-label launches of gin and gin liqueurs in the UK premium spirits market, 2019/20
      • Figure 24: Examples of premium own-label launches in the UK premium beer and cider market, 2020
    • Grocery discounters offering premium quality for less
      • Figure 25: Examples of launches in the UK premium alcoholic drinks market from Lidl, 2019
      • Figure 26: Examples of launches in the UK premium alcoholic drinks market from Aldi, 2019
    • Flavour innovation a major part of NPD in premium drinks
      • Figure 27: Examples of new flavours in the UK premium alcoholic drinks market, 2020
      • Figure 28: Examples of new flavour launches in vodka and craft beer, 2020
    • Increased activity in low- and non-alcoholic drinks
      • Figure 29: Examples of premium launches of low-alcohol or non-alcoholic versions of alcoholic drinks, 2019/20
  9. The Consumer – What You Need to Know

    • Superior taste crucial in premium image
    • Emphasis on time and care spent in making adds value
    • Spirits enjoy the biggest emphasis on buying premium variants
    • Special occasions and celebrations big reasons to purchase
    • Recession poses a big risk to drinks spending
    • Six in 10 would buy fewer drinks for the home
    • Limited editions interest three in 10
    • Lower-calorie variants of more interest than lower-alcohol versions
    • Suitability for gifting important for premium alcoholic drinks
    • Premium versions a good way to extend brands
  10. Impact of COVID-19 on Consumer Behaviours

    • Consumers expect to spend less than usual on alcoholic drinks
      • Figure 30: Expected spending compared with usual spending on alcoholic drinks over the next month, 30 July-7 August 2020
      • Figure 31: Changes to frequency of drinking alcohol since the start of the COVID-19/coronavirus outbreak, by age, May 2020
    • Consumers reticent about returning to restaurants/bars
      • Figure 32: Concerns about going to restaurants/bars, 30 July-7 August 2020
    • COVID-19 triggers spending cuts and speedier shopping
    • Four in 10 cutting back on non-essential spending
      • Figure 33: Proportion of people cutting back on non-essential spending since the COVID-19/coronavirus outbreak, by age, 16-22 July 2020
    • Four in 10 try to limit time in-store, boost to online shopping
      • Figure 34: Shopping patterns since the COVID-19/coronavirus outbreak, by age, 16-22 July 2020
    • Worsening financial positions will hit alcoholic drinks spending
      • Figure 35: Change in financial situation since the start of the COVID-19 outbreak, 30 July-7 August 2020
    • Pandemic and aftermath will increase focus on health
      • Figure 36: Concerns about health and fitness as a result of the COVID-19/coronavirus outbreak, 23 April-7 May 2020
  11. Factors Most Important in Making an Alcoholic Drink Premium

    • Superior taste crucial in premium image
      • Figure 37: Factors most important in making an alcoholic drink premium, June 2020
    • Emphasis on time and care spent in making adds value
    • Longevity and ageing for longer good focuses for marketing
    • Craft credentials also make drinks seem more premium
    • Over-55s show most interest in ageing and localism
    • Few people admit the power of attractive packaging to make a product premium
  12. Buying of Premium Alcoholic Drinks

    • Spirits enjoy the biggest emphasis on buying premium variants
      • Figure 38: Buying of premium alcoholic drinks in the last 12 months, by broad drinks category, June 2020
    • Wine/beer have bigger bias towards standard/economy products
    • Special and seasonal occasions remain key times for wine/beer to mine
    • Half have bought premium alcoholic drinks for someone else
      • Figure 39: Who premium alcoholic drinks bought for in the last 12 months, June 2020
  13. Reasons for Buying Premium Alcoholic Drinks

    • Special occasions and celebrations big reasons to purchase
      • Figure 40: Reasons for buying premium alcoholic drinks in the last 12 months, June 2020
    • Under-45s are big buyers for special occasions
    • Home entertaining an important theme for marketing
    • 25-44s and highest-income households are key targets for entertaining at home
  14. Impact of Worsening Financial Position on Buying of Alcoholic Drinks

    • Recession triggered by COVID-19 poses a big risk to drinks spending
      • Figure 41: Impact of worsening financial position on buying of alcoholic drinks, June 2020
    • Six in 10 of those who would cut spend would buy fewer drinks for the home
      • Figure 42: Ways people would cut back on their spending on alcoholic drinks, June 2020
    • Buying on special offer and from discounters will increase
  15. Interest in Features of Premium Alcoholic Drinks

    • Limited editions interest three in 10
      • Figure 43: Interest in features of premium alcoholic drinks, June 2020
    • Packaging features appeal to a minority
    • Niche interest in pairings with mixers
    • Customised bottles chime with three in 10 18-24s
    • Lower-calorie variants of more interest than lower-alcohol versions
    • Lower-alcohol premium drinks interest one in seven buyers
    • Lower-calorie premium variants appeal to one in five
  16. Behaviours Related to Buying Premium Alcoholic Drinks

    • Suitability for gifting important for premium alcoholic drinks
      • Figure 44: Behaviours related to buying premium alcoholic drinks, June 2020
    • Premium versions a good way to extend brands and drive value growth
    • Reviews and recommendations help to drive purchasing
    • The wisdom of the crowd matters for half of drinks buyers
    • Food and drink pairings can chime in the premium space
  17. Appendix – Data Sources, Abbreviations and Supporting Information

    • Abbreviations
    • Consumer research methodology

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This market report provides in-depth analysis and insight supported by a range of data. At the same time, introductory and top-level content is provided to give you an overview of the issues covered.

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