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Alcohol trends
- 1. Alcohol trends A lookat some key trends impacting the alcohol market including, developments in craft drinks, low and no alcohol options and consideration of whether attitudes to drinking are changing Emily Beardshaw, Consumer Insight Analyst, AHDB July 2018 AHDB Retail and Consumer Insight Snapshot 1
- 2. Key alcohol marketfacts The Grocer reports that people are trading up for their alcohol purchases, buying a lower volume of top brands overall, but spending more £13.2 billion was spent on alcohol in GB grocery retail in the year ending 15 July 2018 according to Kantar Worldpanel. Spend up 4.6% in value terms YOY According to Mintel, beer remained the largest segment of the alcohol market in the UK in 2017 82% of UK adults say that they had drunk alcoholic drinks in the 3 months ending November 2017. (Mintel) Sources: Mintel, Alcoholic drinks review 2018; Kantar Worldpanel, 52 w/e 15 Jul 2018,
- 3. Alcohol free –a tiny but growing part of the market Are young people’s attitudes toward alcohol changing? According to research by the Foresight Factory: • GB teetotallers are more likely to be female • Younger people are more likely to be teetotal than older generations. • Young people (16-24) were found to be less inclined to drink regularly, however, when they do drink they are more likely to binge drink. …And the market is growing Although a small part of the beer, spirits and wine grocery retail market (approx. 0.2% spend), Kantar Worldpanel data shows that non-alcoholic beer has seen a dramatic increase in volume sold through GB retail of 43% in the last year. This has contributed to a total spend of over £25 million in the 52 week period to Jul 18. Sources: Foresight Factory; Kantar Worldpanel, 52 w/e 15 Jul 2018, Low and no alcohol options are expanding… • Retailers have begun to create low and no alcohol areas and aisles in store (Foresight Factory) • Major brands have released new lines to meet this need across beer, wine and spirits
- 4. Craft alcohols havegrown in popularity Sources: The Grocer What is a craft beer or cider? Craft isn’t a specialist term and there isn’t a widely accepted definition. Generally it seems craft drinks are produced for maximum flavour. They can’t really be defined by production method, packaging type or business size because these all vary. In the US the Brewers’ Association define craft brewers as small, independent and traditional. In the UK, SIBA the Society of Independent Brewers represent craft brewers run an ‘Assured British craft brewer’ initiative, which brewers that meet certain conditions and size thresholds can be a part of. As craft beers, ciders and spirits have become more popular, retailers have responded by adapting their alcohol ranges in store. This trend is driving premiumisation of products. For example, in July 2018 the convenience retailer Costcutter introduced 30 craft beers and ciders into their stocked ranges
- 5. Craft examples –new brands, innovations and new flavours are appearing across cider, beer and spirits Sources: The Grocer,Toast ale website Toast ale launched in the UK in 2016 – an ale brewed using surplus fresh bread from sandwich makers and bakeries along with malted barley, hops, yeast and water. The wasted bread used replaces one third of the malting barley which would have otherwise been used. Mainstream alcohol brands are also tapping into the trend They are doing this by launching limited edition and new taste lines of key brands or investing in successful craft companies. Heineken bought a significant stake in North London brewery Beavertown this summer and are investing £40m into a new brewery for it. Camden Town Brewery was sold to AB InBev in 2015 Brewdog – started in Scotland in 2007. They now own and operate two eco-friendly breweries, one in Ellon, Scotland and one in Columbus, Ohio. According to the Grocer it is the UK’s biggest craft beer brand and also the 13th largest UK beer brand generally Spirits brands Smirnoff and Jack Daniel’s have both successfully entered the cider market.
- 6. “Gin-novations” Gin has experienceda huge resurgence in popularity in recent years and in 2017 gin re-entered the ONS UK inflation basket. There has also been an explosion of craft gins hitting the market at high price points and a range of innovations featuring gin – everything from gin advent calendars and Christmas tree decorations through to different coloured gins. Further bolstered by the increasing popularity of premium tonic brand Fever-Tree, gin has seen a revival of core brands and an explosion of new flavour combinations and its appeal doesn’t appear to be showing signs of slowing yet.
- 7. Alcohol is consumedat many different occasions and retailers are looking for new ways to engage with their shoppers Everyday dinners Lidl in Germany have released a virtual chat bot named Margot to help consumers find the perfect wine pairing for their meal (Foresight Factory). Weddings Aldi have this year launched a wedding wines service to help consumers choose wines that suit their tastes and budget Sporting Events The early part of this year’s world cup competition coincided with a CO2 shortage in the UK which spread fear of a lack of availability for some drinks across the country. Despite this, the Grocer reports that early indications from retail data suggest that the World Cup has accompanied boosted alcohol sales. It may, of course, also have been impacted by the warm weather. Sources: Foresight Factory 2018, The Grocer
- 8. Summary: Alcohol trends Attitudesto drinking • Overall levels of self reported regular drinking have remained relatively static over the past decade • Young people are more likely to be teetotal than older generations, perhaps due to being more conscious of the impacts of heavy alcohol consumption, and increasing interest in leading a healthy lifestyle Innovation Opportunities • Low and no ABV options are expanding and appetite for these is also growing. • It is still a very small segment of the market but has been in growth over the past couple of years. • Likely to appeal to those moderating alcohol intake or choosing to restrict consumption completely. Category innovations • While craft drinks have been growing in popularity, there has been a wealth of new flavour combinations introduced by longstanding brands too. • Innovation and NPD are important in any category to drive growth and so far these appear to have capitalised on consumer willingness to pay more for a new or premium product The trend to low and no ABV
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