When it comes to socialising, we know at-home drinking will continue as shoppers curb their spending and opt to spend time together in the home.
As long as retailers focus their efforts, read the room and understand changing consumer lifestyles and taste preferences, there are real opportunities for stores to capitalise on drinking occasions and continue to move the market in the right direction.
The challenge is to continue to capture imaginations with innovative and out of the ordinary drinking experiences, offer good value, good quality drinks, to drive trial and purchase, and to secure customer loyalty, to keep shoppers coming back and willing to spend on brands because of the added value they bring to the occasion.
Dark spirits have traditionally been the preserve of the winter months for warming drinks, but the category is becoming increasingly diverse with a pipeline of innovation driving consumers to experiment throughout the year, attracted by the different flavour profiles and expressions on the market.
Drams and sipping spirits, served neat or with ice, are now popular all year round and fit the after-dinner occasion, to enjoy while playing board games, consoles, watching box sets, or for putting the world to rights by the log fire.
“This is the moment for more nuanced, complex drinks, benefitting from consumers who have had time to experiment at home and are more in touch with what they like and how to make it, with lots of previous barriers such as lack of education around some categories being addressed by brands. For example, we know that historically, it has been challenging for Scotch and Irish whiskey to resonate with younger drinkers, who have been daunted by the complexity of the liquid and put off by the seriousness of it,” comments Tim Dunlop, European Commercial Director, Biggar and Leith.
“Shanky’s Whip Irish whiskey liqueur is the perfect antidote to address this challenge, bringing together a flavour-led modern brand proposition straddling two vibrant, buoyant categories, making the category more approachable and accessible and bringing a contemporary twist to traditional Irish tipples and classic cocktails. We expect brands with a strong and accessible proposition, playing in areas of growth, to play a critical role in driving alcohol sales in the retail sector.”
Shanky’s Whip, for example, has two popular flavour profiles up front, caramel and vanilla, which alongside being steadfast year-round, sit at the heart of cocktails that show no sign of waning in popularity – the Espresso Martini and the Old Fashioned – both of which are established in the home. The brand is also recommended with cola, ginger beer or passion fruit juice as a long spirit mixer drink, it sits in the sweet spot between two serious categories while remaining fun, simple and accessible.
David Relph, Country Manager UK and Ireland, BuzzBallz Cocktails, comments: “There are huge opportunities for retailers to drive sales of alcoholic drinks in the year ahead. Shoppers will be looking for drinks that offer more of an experience and appeal to their senses – think colourful cocktails, eye-catching packaging, popular and emerging flavour combinations and of course, the element of fun.”
Key trends to watch include even more socialising in the home and garden, as shoppers look to let loose at home, quality beverages including higher abv drinks, flavour exploration, convenience, value, ease of use, and versatile packaging formats. These pillars will shape how people shop on drinks fixtures and chillers in the year ahead.
“The shift to DIY drinking means retailers are more important than ever for getting products into consumers’ hands,” adds Relph. “Grab and go RTDs have proved their worth and they are here to stay, so with the right range, displays, price points and offers, retailers can establish themselves as the go-to destination for weekend supplies – and capitalise on a part of the category that is dynamic, lucrative and in demand.”
Whether opting for alcoholic drinks as a way to relax at the end of the week, or for higher tempo social gatherings in the home, shoppers will be seeking out good value for money and drinks that enhance the big night in occasion and bring an element of fun and excitement to the weekend.
Sofa socialising – whether among the household or with invited friends and family – is set to deepen as a trend in 2024 as it presents a way to spend time together.
This style of casual socialising calls for easy-to-prepare drinks, paired with bowls of sharing snacks and informal foods such as chips and dips, nachos, loaded fries, tacos and home delivery takeaways.
BuzzBallz Cocktails are premixed, single-serve cocktails ready to be enjoyed immediately, either on the go or in the home. Research shows that over 70 percent of people purchasing BuzzBallz Cocktails consume them within 20 minutes (BuzzBallz, USA, Dec 2023) so it’s definitely worth stocking them in the fridges and chillers for immediate consumption.
Calli O’Brien, Head of Marketing at Aston Manor Cider, comments: “While Beers, Wines and Spirit sales are down -7.5%, the cider category (-7.3%) is in fact outperforming both lagers (-7.6%) and ales (-10.7%, Mintel). Aston Manor expects this strong performance to continue throughout the next 12 months.”
Larger multi-packs are especially important to ensure shoppers can keep their home supply stocked up. Product packs, such as the pint cans in Crumpton Oaks four-pack, are a popular option to enable consumers to keep their supply stocked up with single-serve options.
“It’s also worth noting that a third of shoppers only ever buy cider in cans (Mintel), so it is important that retailers stock both bottles and cans to provide choice for consumers,” adds O’Brien. “Frosty Jack’s and Crumpton Oaks Cider come in both pack formats and we recommend retailers dual stock plastic bottled products alongside cans to help attract more customers into stores.”
It’s been well documented that as a nation, we’re already facing challenging times due to the cost-of-living crisis. Consumer confidence in the UK is currently at a record low (GfK), even lower than the 2008 global financial crisis. This paints a grim picture of the UK public’s mood and, as a result, decision making around expenditure is being heavily impacted.
Therefore, it is no surprise that 72% of UK households are now impacted by the rising costs of food and drink (Levercliff). 1.3m households are also at risk of falling below the poverty line, as analysts report that household costs for families with two children have risen by £400 a month (The Guardian).
The reality is we are all making savings to varying extents. Not just to make ends meet, but to also be able to afford the things we value most. As a result, 94% of consumers have stated they would consider switching to a cheaper alternative (Levercliff).
Aston Manor’s ethos is all around affordability. The brand is here for shoppers, helping them to save with its affordable cider, allowing them to focus their spend on what really matters. The range provides shoppers with an affordable solution, without trading down on quality, so they can be assured they are not compromising when needing to spend a little less cash on cider.
Stuart Harrison, UK Sales Director, BrewDog PLC, comments: “Craft Beer has been a growing category leading up to and throughout 2023, bucking the trend to out-perform the total beer market. And there are no signs of this slowing down as consumers prioritise more quality drinks over quantity. With Nielsen predicting that craft beer will continue to grow, reaching 8.1% of beer sales this Christmas (up from 7.8% this year and 7.5% in 2021, NielsenIQ), it is absolutely a key category to consider when reviewing beer ranges in the new year.”
In fact, Kantar reported that of 34 beer, wine & spirit categories, only seven saw penetration growth this year, and of those leading the growth, Low and No Alcohol (+1.3pp) and Craft Beer (+0.2), both welcomed new shoppers. These recruiting categories had a common theme of appealing to younger and more affluent shoppers, so attracting this consumer base with your product offering will be key to growth in 2024 (Kantar).
Over the last 12 months, the total beer category has returned to value growth at +1.4%, but is down in volume -4.8%, driven largely by inflationary price increases (NielsenIQ). Summer did see a slight value decline vs YA with beer sales down -0.6% L12w likely due to the wet British summer and lack of the usual summer event occasions. Despite this craft beer saw another strong summer up +3.3% vs YA L12w as shoppers continue to premiumise in the off trade, whilst mainstream lagers saw the largest decline at -3.8% vs YA (Nielsen).
Looking further at the key styles to watch in 2024, Stout saw one of the strongest uplifts this summer up +18.2% vs YA L12w, thanks in part to the launch of BrewDog Black Heart, which has driven excitement into the category to appeal to new drinkers. Craft Lager also achieved impressive growth over the summer, up +41.1% vs YA L12w and up 29.9% MAT. The brands driving this are BrewDog Lost Lager (+22.9 %), Camden Hells (+51.9%) and NPD from Brooklyn Pils (Nielsen).
Although still only worth 2.2% share of total beer sales, low and no alcohol is up +10.9% vs YA MAT and +9.0% over the summer. Traditionally, alcohol free sales are strongest at Christmas, but this also indicates the importance of offering choice during the summer months, as shoppers increasingly look for alternatives. Also, with more retailers incorporating alcohol-free into meal deals offers, this is helping to open even more usage occasions for the category, making it one to watch.
Multipacks are a key growth driver for the category, and BrewDog has placed its focus on mid-size multi-packs, as they become more common place within the consumer repertoire, particularly for summer socialising. BrewDog Punk IPA is the number one craft beer brand (Nielsen), and therefore acts as a signpost for the category – available in multiple formats, including single cans, 4-pack, 8-pack and 12-pack, making it accessible for shoppers in all channels.
“Our BrewDog Mixed Packs have also been an important recruitment tool,” adds Harrison. “Our research shows that 50% of first-time purchases come from multi-packs, and larger mixed formats significantly over index with first time buyers. By working with our customers to increase distribution of these formats, we have been able to engage more shoppers to trade up in weight of purchase and encourage them to return to the category.”
Neil Boyd, UK Managing Director, Ian Macleod, Edinburgh Gin, comments: “Due to the current economic situation, the performance of the beers, wines and spirits market is undergoing a transformation. Data shows that consumer spend on BWS is flat (+0.4%, Nielsen), falling behind both the total market (+6.6%, Nielsen) and the current rate of inflation (+4.7% as of Oct 23, Nielsen). These statistics not only reflect the competitive nature of the category but indicate the lingering effect of the rising cost of living, as many households cut back on their alcohol spend to prioritise essentials. However, although consumers are cutting back throughout the year, evidence points to shoppers having the ability to flex their budgets for the right seasonal event. For example, in the lead-up to the 2023 festive period, the BWS category showed growth of +3.3% as consumers stretch their budgets for distinct special occasions.”
With a growing focus on health and wellness, consumers are increasingly beginning to moderate their alcohol consumption. This is evident across all age groups, with 42.6% of adults desiring to reduce both their serves per occasion and occasions per drinker. Therefore, retailers have an opportunity to stock a greater breadth of no and low alcohol products, as well as refine the quality of spirits within the range, ensuring drinkers can enjoy high-quality products in the moments where they do choose to indulge.
Furthermore, retailers should be aware of the rising demand for canned cocktails which is being fuelled by consumers seeking a wider repertoire of serves, flavours and tastes which cocktail RTDs currently offer. Data shows that affordability is a big contributor to the rise in popularity of RTDs as consumers perceive more value in buying a single can compared to purchasing a whole bottle of wine or prosecco. Research reveals that 40% of RTD consumers believe that purchasing canned cocktails allows them to manage their weekly spend on alcohol more easily as they are able to enjoy the perfect serve in a single can.
“Edinburgh Gin remains a strong performer in its category and is one of the top 10 gin brands in the UK, with value sales close to £30m annually across both trade channels,” adds Boyd. “Our liqueur range continues to be a best-selling product, achieving the title of number one gin liqueur brand within the UK Off Trade. What makes our brand truly unique is its diverse offering. Edinburgh Gin is one of the few brands to offer shoppers choice across the London Dry, Full Strength Flavoured, Gin Liqueur and Gin Ready to Drink categories, and this versatility is essential in catering to a range of consumer preferences.”
Jemma Williams, Head of Grocery at Greene King, said: “The types of pack sizes that retailers should stock really differ seasonally and by beer category. Larger packs are great at supporting occasion-based shopping, especially during seasonal periods, as well as opening up feature and display options in store and online. Interestingly, the mid-sized pack range (8-15 units) is the only format to have grown volume share of beer in 2023, driven by gains across lager, ale, craft and stout and it’s worth watching this trend in 2024 (Nielsen Scantrack, Total Coverage, December 2023).”
Smaller packs and single cans/bottles are great for attracting new consumers and offer the opportunity to drive experimentation. Within craft beer, we’ve seen 440ml single cans taking the lion’s share of the single format (Source for 440ml is Nielsen Scantrack, Grocery Mults October 2023).
The no and low trend is forecast to continue into 2024 and beyond and will be a focus for both suppliers and retailers. Consumers are becoming more and more aware of the level of ABV they are drinking and moderating due to lifestyle changes.
In the beer category, stout has been making a resurgence for the last few years and more brewers are exploring opportunities here. Stout is a perfect choice for consumers during colder months, so more brewers will look to play in this area.
“In terms of category wide, it would be great to see how suppliers can tap into more cross-category collaborations to support consumer needs and offer more ease of shop,” adds Williams.
“Understanding regionality is an essential lever that retailers can pull to be more targeted in ranging and maximise on space. Our research on premium bottled ale suggests that over ¼ of brands have a high regional sales deviation, particularly focused in Scotland, Yorkshire, and the Southwest, so it’s key that retailers understand this balance.”
John Price, Head of Marketing at KBE Drinks, comments: “The beers, wines and spirits market is performing well and we’re seeing consumers are increasingly willing to spend more to treat themselves to better quality and authentic beer options, which in turn drives increased value in-store. So, despite the financial pressures faced, many consumers continue to view alcohol as an affordable luxury which is worth paying for.
That’s why premium world lagers like Kingfisher, Sapporo and Sagres are a great option for retailers to stock over the festive period, as they are bang on trend and can typically be charged at a minimum of 30% more than other more mainstream options.”
No and low alcohol beers are continuing to grow in popularity so grocery retailers should grasp this opportunity and ensure they are catering for the increasing number of consumers who are looking for moderation.
KBE Drinks recently announced the arrival of Kingfisher Zero, which embodies the quality and flavour of Kingfisher Premium, but without alcohol and, most importantly, without compromising on taste. Another option would be Sagres 0.0% which comes in packs of 24 x 330ml cans or bottles and is suitable for both vegans and vegetarians. It’s warm and golden in colour and comes with a taste profile which is mild and fruity with a slightly bitter edge.
“When it comes to beers, I think its important retailers stock a variety of standard and premium brands in a range of formats to ensure they don’t miss out on any potential sales opportunities,” adds Price. “A good selection of chilled brands is important, whether it’s single serves or four packs, as well as some larger pack formats to appeal to those people who are perhaps looking to save money, enjoy a ‘big night in’ or are perhaps hosting friends or a family event.”
Nowadays consumers enjoy discovering premium world lagers from all sorts of different places.
“Whilst there’ll always be demand for Mediterranean beers which of course remain popular, I’d encourage retailers to think beyond that and look further afield,” says Price. “I’ve already talked about the current interest in Japanese beers like Sapporo, but I’d also like to mention Indian beers like our very own Kingfisher, which has a crisp and easy-drinking taste that consumers love.”
“I think pairing beers and ciders with food is still an under-explored opportunity for retailers to consider when trying to drive incremental sales,” suggests Price. “With an increasing number of consumers making less visits to pubs, bars and restaurants at the moment due to on-going financial pressures, this almost certainly means more eating and drinking at home, where they will still want to make home meals as authentic as possible, which means matching their beer choice to cuisine. So, for example, if they are eating Indian food, then pairing it with the only authentic Indian beer brand, Kingfisher, is a great idea, or perhaps if they are eating a Nandos-inspired meal, then pairing it with an authentic Portuguese lager like Sagres. Retailers should respond to this trend with clearly signposted meal deals and inspirational ideas for pairing beers with food.”
“I think it’s important to ensure retailers are stocking brands at every price point, thereby ensuring they can maximise the margin from each individual customer, so from the standard lager brands right through to super-premium brands like our very own Sapporo,” Price continues. “Japanese lagers are growing steadily in popularity at the moment and Sapporo really is the product of precision craftsmanship, taking the very best traditional approaches and adding an innovative twist to brew an unmistakably crisp and balanced beer, with an ABV of 5.0% which is available to retailers in 650ml cans.”
Paul Callow, Senior Category and Insights Manager at Thatchers Cider, comments: “Retailers should be thinking now about which ciders to have on shelf in the Spring, focusing on best sellers and the brands consumers are seeking out. Get the selection right and watch your cider sales grow!”
There’s an opportunity for significant growth in cider sales in 2024, a category that has a total value of £1.11bn.
Premium apple cider always sells well as consumers opt for their high-quality favourites. Thatchers Gold 10-Pack is the priority format to stock, as it’s now the top selling apple cider Mid-Pack in the Major Mults (Circana). Thatchers Gold also provides the #1 4-Pack in the Major Mults (Circana), and for those wanting a PMP, the 4x500ml pack is proving extremely popular with retailers looking to communicate value for money.
Alcohol-free options are now part and parcel of a responsible cider selection. Whether for the designated driver, shoppers who are looking to moderate, or simply because it tastes great, Thatchers Zero is the alcohol-free cider to stock. It is a sector growing in importance as health and well-being remains a focus for British shoppers. The UK’s leading alcohol-free apple cider (Circana), Thatchers Zero is available in 500ml bottles.
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