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UK Alcoholic Drinks Review Inc Impact of COVID-19 market report

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Providing the most comprehensive and up-to-date information and analysis of the Alcoholic Drinks Review: Inc Impact of COVID-19 market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Covered in this report

The outlook for the alcoholic drinks market in 2020 is fraught with uncertainty due to the rapidly changing situation surrounding the COVID-19 outbreak. The immediate impact of the lockdown will be a significant hit to drinks sales through the on-trade, while in the medium term the impact on the economy and consumer incomes will be inescapable. Alcoholic drinks are a discretionary category in the line of fire as people economise.

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Expert analysis from a specialist in the field

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

At the same time as facing the immediate upheaval brought about by the COVID-19 outbreak, the industry must also look ahead and respond to widespread consumer concerns about the healthiness of alcoholic drinks and the alcohol moderation trend, which the increased focus on health resulting from the outbreak will elevate. Promisingly for the industry stalwarts, low-/non-alcoholic versions from favourite drinks brands appeal widely, giving them a strong footing to explore this space Angharad Goode
Food & Drink Analyst

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What's included

What's included

Table of contents

Table of contents

  1. Overview

    • What you need to know
      • Key issues covered in this Report
        • Products covered in this Report
        • Executive Summary

            • Impact of COVID-19 on the Alcoholic Drinks Market
              • Figure 1: Forecast of UK value sales of alcoholic drinks (adjusted for COVID-19), 2014-24
              • Figure 2: Expected impact of COVID-19 on the alcoholic drinks market, short, medium and long-term, 27 April 2020
            • The market
              • Lager supports market volume growth
                • Figure 3: Total UK value sales of alcoholic drinks, by segment, 2014 and 2019
              • Alcohol duties frozen in 2020 Budget
                • Action on Sugar calls for the ‘sugar tax’ to be extended to RTDs
                  • Lower prices drive switch towards off-trade
                    • Companies and brands
                      • Many beer brands feel the absence of 2018 boost
                        • Figure 4: UK retail value sales of the top alcoholic drink brands, 2018/19*
                      • Low-alcohol trend gains momentum in NPD
                        • Continued rise in vegan launches
                          • Diageo remains top spender
                            • Heritage and provenance are key themes in marketing
                              • The consumer
                                • Around one in five doesn’t drink alcohol
                                  • Figure 5: Types of alcoholic beverages drunk by category, November 2019
                                • Low price and familiar brand are top priorities for buyers
                                  • Figure 6: Important factors when buying alcoholic drinks in supermarkets, November 2019
                                • Strong concerns about healthiness of alcohol
                                  • Figure 7: Behaviours related to alcoholic beverages, November 2019
                                • Refreshment appeals across occasions
                                  • Figure 8: Interest in relaxing, refreshing, comforting and good for slow sipping drinks for selected occasions, November 2019
                                • Weak association with refreshment poses a challenge to spirits
                                  • Figure 9: Selected attributes associated with alcoholic beverages, November 2019
                                • What we think
                                • The Impact of COVID-19 on the Alcoholic Drinks Market

                                  • Short, medium and long-term impact on the industry
                                    • Figure 10: Expected impact of COVID-19 on the alcoholic drinks market, short, medium and long-term, 27 April 2020
                                  • Opportunities and Threats
                                    • Lockdown will lead to a sharp fall in drinks volumes
                                      • Health-focus prompted by COVID-19 will strengthen moderation trend
                                        • Big conglomerates will weather the disruption, small players can tap community spirit
                                          • Online channel will gain a lasting boost
                                            • Impact on the alcoholic drinks market
                                              • COVID-19 has created huge disruption to the drinks industry
                                                • Figure 11: Changes in spending habits on alcoholic drinks for drinking in the home, 26th March-23rd April 2020
                                              • Overall volumes to be hit in 2020
                                                • Figure 12: Forecast of UK value sales of alcoholic drinks (adjusted for COVID-19), 2014-24
                                              • Lockdown drives online sales
                                                • Figure 13: Selected behaviour changes since the COVID-19/coronavirus outbreak, 16th April-23rd April 2020
                                              • Independent drinks makers are most exposed to closure of on-premise
                                                • Shifts in consumer behaviour
                                                  • Moderation trend will continue, but there are opportunities for drinks brands
                                                    • Support for local producers holds potential
                                                      • Figure 14: Selected behaviour changes since the COVID-19/coronavirus outbreak, 16th April-23rd April 2020
                                                    • Impact on key consumer segments
                                                      • 18-24s emerge as a moderate drinkers
                                                        • Over-55s offer a safe haven for brands
                                                          • How a COVID-19 recession will reshape the alcoholic drinks market
                                                            • Alcoholic drinks as discretionary are in the line of fire in downturn
                                                              • ‘Savvy luxuries’ will steal a march
                                                                • Impact on the marketing mix
                                                                  • Online channel will enjoy a lasting boost
                                                                    • Big players scrutinise ad spend in lockdown, innovative brands inform and entertain
                                                                      • COVID-19: Market context
                                                                      • Issues and Insights

                                                                        • Strong concerns about alcohol and health
                                                                          • The facts
                                                                            • The implications
                                                                              • Potential for stalwarts to explore low/no-alcohol variants
                                                                                • The facts
                                                                                  • The implications
                                                                                  • The Market – What You Need to Know

                                                                                    • Lager supports market volume growth
                                                                                      • Significant volume loss expected in 2020
                                                                                        • Alcohol duties frozen in 2020 Budget
                                                                                          • Action on Sugar calls for the ‘sugar tax’ to be extended to RTDs
                                                                                            • Lower prices drive switch towards off-trade
                                                                                            • Market Size and Forecast

                                                                                              • 2019 sees sales growth ebb
                                                                                                • Figure 15: Total UK value and volume sales of alcoholic drinks, 2014-19
                                                                                              • Outlook in light of COVID-19
                                                                                                • COVID-19 has created huge disruption to the drinks industry
                                                                                                  • Significant volume loss expected in 2020
                                                                                                    • Modest volume growth predicted from 2022
                                                                                                      • Figure 16: Forecast of UK value sales of alcoholic drinks (adjusted for COVID-19), 2014-24
                                                                                                      • Figure 17: Forecast of UK volume sales of alcoholic drinks (adjusted for COVID-19), 2014-24
                                                                                                      • Figure 18: Total UK value and volume sales of alcoholic drinks (adjusted for COVID-19), 2014-24
                                                                                                    • Pre-COVID-19 forecast highlights the impact that the crisis will have on sales
                                                                                                      • Figure 19: Total UK value and volume sales of alcoholic drinks (pre-COVID-19 forecast), 2014-24
                                                                                                      • Figure 20: Forecast of UK value sales of alcoholic drinks (pre-COVID-19 forecast), 2014-24
                                                                                                      • Figure 21: Forecast of UK volume sales of alcoholic drinks (pre-COVID-19 forecast), 2014-24
                                                                                                    • Forecast methodology
                                                                                                    • Market Segmentation

                                                                                                      • Cider sales ebb following 2018 boost
                                                                                                        • Beer sales bolstered by lager
                                                                                                          • Dark spirits sales continue to fall
                                                                                                            • White spirits growth to slow
                                                                                                              • Wine vulnerable to exchange rate fluctuations
                                                                                                                • Figure 22: Total UK value sales of alcoholic drinks, by segment, 2014-19
                                                                                                                • Figure 23: Total UK volume sales of alcoholic drinks, by segment, 2014-19
                                                                                                            • Channels to Market

                                                                                                              • Lower prices continued to boost the appeal of off-trade in 2019
                                                                                                                • Figure 24: UK value sales of alcoholic drinks, by channel, 2017-19
                                                                                                                • Figure 25: UK volume sales of alcoholic drinks, by channel, 2017-19
                                                                                                            • Market Drivers

                                                                                                              • Alcohol duty cuts linked to increase in alcohol related deaths
                                                                                                                • Figure 26: UK excise duty rates for alcoholic drinks, 2009-19
                                                                                                              • Minimum unit price introduced in Wales in March 2020
                                                                                                                • Rising real incomes fail to bring good news for on-trade
                                                                                                                  • Figure 27: CPI vs average weekly earnings, 2016-19
                                                                                                                • Aging population will benefit wine and ale/stout
                                                                                                                  • Figure 28: Trends in the age structure of the UK population, 2014-19 and 2019-24
                                                                                                                • Number of pubs rises in 2019 for the first time in over a decade
                                                                                                                  • Figure 29: Number of public houses and bars in the UK, by size, 2015-19
                                                                                                                • BBPA encourages ingredient and calorie labelling in beer
                                                                                                                  • Action on Sugar calls for the ‘sugar tax’ to be extended to RTDs
                                                                                                                    • Sector Deal for Tourism to boost pubs
                                                                                                                    • Companies and Brands – What You Need to Know

                                                                                                                      • Many beer brands feel the absence of 2018 boost
                                                                                                                        • Low-alcohol trend gains momentum in NPD
                                                                                                                          • Continued rise in vegan launches
                                                                                                                            • Diageo remains top spender
                                                                                                                              • Heritage and provenance are key themes; sport sponsorships continue
                                                                                                                              • Market Share

                                                                                                                                • Mixed fortunes for leading beer brands
                                                                                                                                  • Figure 30: UK retail value sales of the top alcoholic drink brands, 2016/17-2018/19
                                                                                                                              • Launch Activity and Innovation

                                                                                                                                • Low-alcohol trend gains momentum
                                                                                                                                  • Figure 31: Share of launches with an ABV less than 1.21% of all wine, beer and cider launches in the UK, 2015-19
                                                                                                                                • Beer and wine fuel much of 2019 activity
                                                                                                                                  • Low-alcohol drinks build additional health cues
                                                                                                                                    • Figure 32: Examples of low-alcohol launches with additional health claims, 20119
                                                                                                                                  • Gluten-free claims grow
                                                                                                                                    • Figure 33: Share of launches making gluten-free claims of all UK alcoholic drinks launches, 2015-19
                                                                                                                                  • Continued rise in vegan launches
                                                                                                                                    • Figure 34: Share of launches making vegetarian and vegan/no animal ingredient claims of all UK alcoholic drinks launches, 2015-19
                                                                                                                                  • Can trend drives increase in aluminium packaging
                                                                                                                                    • Slimline format drives can launches in RTDs and wine
                                                                                                                                      • Figure 35: Alcoholic drinks launches by packaging material, 2015-19
                                                                                                                                    • Environmental credentials of cans warrant spelling out
                                                                                                                                      • Figure 36: Examples of drinks packaging highlighting environmental credentials, 2019
                                                                                                                                    • Highlighting eco credentials of production remains rare
                                                                                                                                      • Figure 37: Share of launches with an environmental claim in alcoholic drinks, by type, 2015-19
                                                                                                                                    • Sustainability initiatives range from waste food to edible straws
                                                                                                                                      • Figure 38: Examples of drinks with sustainability claims, 2019
                                                                                                                                    • Better-for-you drinks attract limited launches
                                                                                                                                      • ‘Diet’ alcoholic beverage launches are niche but growing
                                                                                                                                        • Figure 39: Share of launches with a diet/light claim in alcoholic beverages, 2015-19
                                                                                                                                        • Figure 40: Examples of drinks calling out lower-calorie proposition, 2019
                                                                                                                                      • Hard seltzer makes inroads into the UK
                                                                                                                                        • Figure 41: Examples of hard seltzer and spritz pre-mixed drinks, 2019
                                                                                                                                      • Alcoholic kombucha comes to market
                                                                                                                                        • Figure 42: Examples of kombucha drinks containing alcohol, 2019
                                                                                                                                      • Have your cake and drink it
                                                                                                                                        • Figure 43: Examples of bakery inspired alcoholic drinks, 2018-20
                                                                                                                                    • Advertising and Marketing Activity

                                                                                                                                      • Diageo remains top spender
                                                                                                                                        • Figure 44: Total above-the-line, online display and direct mail advertising expenditure on alcoholic drinks, by advertiser, 2019
                                                                                                                                      • Guinness champions women’s rugby
                                                                                                                                        • Bombay Sapphire pushes creativity
                                                                                                                                          • Smirnoff releases first global campaign in 25 years
                                                                                                                                            • Tanqueray continues to emphasise unchanging quality in global campaign
                                                                                                                                              • Thatchers leads spending in cider
                                                                                                                                                • Football remains Budweiser’s focus
                                                                                                                                                  • Heineken brings attention to low- or no-alcohol portfolio
                                                                                                                                                    • Amstel releases second UK TV ad
                                                                                                                                                      • Birra Moretti spotlights Italian heritage
                                                                                                                                                        • Strongbow partners with new ad agency
                                                                                                                                                          • Carling promotes local production
                                                                                                                                                            • Figure 45: Total advertising expenditure on alcoholic drinks, by media type, 2015-19 (sorted by 2019)
                                                                                                                                                          • BrewDog opens first alcohol-free beer bar
                                                                                                                                                            • Michelob pushes associations with running
                                                                                                                                                              • Nielsen Ad Intel coverage
                                                                                                                                                              • The Consumer – What You Need to Know

                                                                                                                                                                • Around one in five doesn’t drink alcohol
                                                                                                                                                                  • Low price and familiar brand are top priorities for buyers
                                                                                                                                                                    • Added value can win over half of drinks buyers
                                                                                                                                                                      • Strong concerns about healthiness of alcohol
                                                                                                                                                                        • Potential for low-/non-alcoholic versions
                                                                                                                                                                          • Refreshment appeals across occasions
                                                                                                                                                                            • Weak association with refreshment poses a challenge to spirits
                                                                                                                                                                            • Types of Alcoholic Beverages Drunk

                                                                                                                                                                              • Four in five adults drink alcohol
                                                                                                                                                                                • Figure 46: Types of alcoholic beverages drunk by category, November 2019
                                                                                                                                                                              • 17% of drinkers only drink once a month or less
                                                                                                                                                                                • Figure 47: Frequency of drinking alcoholic drinks, November 2019
                                                                                                                                                                              • Still wine most consumed alcoholic beverage
                                                                                                                                                                                • Figure 48: Types of alcoholic beverages drunk, November 2019
                                                                                                                                                                              • One in five sticks to one drink
                                                                                                                                                                                • Figure 49: Repertoire of alcoholic beverages drunk, November 2019
                                                                                                                                                                            • Important Factors When Buying Alcoholic Drinks in Supermarkets

                                                                                                                                                                              • Top factors demonstrate risk aversion among consumers
                                                                                                                                                                                • Low price is joint top priority
                                                                                                                                                                                  • Figure 50: Important factors when buying alcoholic drinks in supermarkets, November 2019
                                                                                                                                                                                • Added value can win over half of drinks buyers
                                                                                                                                                                                  • Half of drinks buyers seek tried and tested brands
                                                                                                                                                                                    • Flavour profiles influence purchase behaviour for 27%
                                                                                                                                                                                      • Figure 51: Examples of alcoholic drinks with unusual on-pack flavour descriptions, December2018
                                                                                                                                                                                  • Behaviours Related to Alcoholic Beverages

                                                                                                                                                                                    • Strong concerns about alcohol and health
                                                                                                                                                                                      • Need for better-for-you variants to ensure engagement
                                                                                                                                                                                        • Figure 52: Behaviours related to alcoholic beverages, November 2019
                                                                                                                                                                                      • Potential for brand extension…
                                                                                                                                                                                        • …or encouraging moderation
                                                                                                                                                                                        • Qualities Sought for in Alcoholic Beverages by Occasion

                                                                                                                                                                                          • Refreshment appeals across occasions
                                                                                                                                                                                            • Figure 53: Desired qualities of alcoholic beverages for different occasions, November 2019
                                                                                                                                                                                          • Drinks for enjoying with time appeal to one in four
                                                                                                                                                                                            • Presentation matters more to younger drinkers
                                                                                                                                                                                            • Qualities Associated with Alcoholic Beverages

                                                                                                                                                                                              • Sipping in an age of moderation
                                                                                                                                                                                                • Beer and cider struggle to associate with slow sipping
                                                                                                                                                                                                  • Wine takes the lead as a sipping drink
                                                                                                                                                                                                    • Figure 54: Attributes associated with alcoholic beverages, November 2019
                                                                                                                                                                                                  • Spirits need a refresh…
                                                                                                                                                                                                    • … while beer and cider keep their cool
                                                                                                                                                                                                    • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                                                                        • Abbreviations
                                                                                                                                                                                                          • Consumer research methodology
                                                                                                                                                                                                          • Appendix – Advertising and Marketing Activity

                                                                                                                                                                                                            • Spirits & liqueurs drive adspend
                                                                                                                                                                                                              • Figure 55: Total above-the line, online display and direct mail advertising expenditure on alcoholic drinks, by product category, 2019
                                                                                                                                                                                                          • Appendix – Market Size and Forecast

                                                                                                                                                                                                            • Forecast methodology
                                                                                                                                                                                                                • Figure 56: UK value sales of alcoholic drinks, best- and worst-case forecast (pre COVID-19), 2019-24
                                                                                                                                                                                                                • Figure 57: UK volume sales of alcoholic drinks, best- and worst-case forecast (pre COVID-19), 2019-24

                                                                                                                                                                                                            About the report

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                                                                                                                                                                                                            • The Consumer

                                                                                                                                                                                                              What They Want. Why They Want It.

                                                                                                                                                                                                            • The Competitors

                                                                                                                                                                                                              Who’s Winning. How To Stay Ahead.

                                                                                                                                                                                                            • The Market

                                                                                                                                                                                                              Size, Segments, Shares And Forecasts: How It All Adds Up.

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                                                                                                                                                                                                              Where The White Space Is. How To Make It Yours.

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                                                                                                                                                                                                              What’s Shaping Demand – Today And Tomorrow.

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