In 2020 beer grew three times faster than total FMCG, with more at-home consumption than ever before (Kantar).
Premium beer has been driving this growth.
Last year premium lager and world beer contributed the most absolute value growth to the overall beer category (Nielsen), while super premium is currently increasing two times ahead of the total category (Nielsen).
“High consumer demand for premium lines is a trend we expect to continue throughout 2022 and beyond,” comments Sunny Mirpuri, Director for Wholesale & Convenience, Budweiser Brewing Group. “By 2025 we expect 70% of beer consumption to be of the premium and super-premium category, so retailers should ensure they are stocking up on a diverse portfolio of premium beers now.”
Another sub-category going from strength to strength is no-and-low alcohol. Driven by the continued consumer trend for moderation, no-and-low is now worth £101.6m, growing by 62% since 2019 (Nielsen). One in 10 beer drinkers now regularly opt for an alcohol-free alternative, a figure which has grown by 16% year-on-year (Kantar).
Sales of mid and large packs and decreases in smalls and singles are increasing (Nielsen), as a result of consumers shopping less frequently and spending more per shop. Generally there is greater demand for larger packs ahead of and during occasions where regular social gatherings take place, such as Christmas and summer parties (Nielsen).
“However, when considering stock strategies, retailers should also be aware of the growing popularity of pint cans,” says Mirpuri. “60% of consumers now only buy this format, and total sales of pint cans grew by £36m in 2020 alone, demonstrating their importance to the retail channel. Stocking both smaller and large pack sizes is therefore key to maximising sales.”
Value is hugely important for shoppers especially with anticipated rising inflation. Price-marked packs have as a result become increasingly popular as they provide reassurance to shoppers that they are being charged fairly. In a poll conducted last year, Budweiser Brewing Group found that 81% of consumers believe price-marked packs are less confusing and more transparent than their non-priced counterparts, while 63% feel they are fairer. BBG launched price-marked single cans of Budweiser and Stella Artois in 2021, a 10-pack of Stella Artois and a four-pack of Corona in response to this consumer demand.
BBG’s premium brands continue to perform strongly in the Off-Trade. Stella Artois remained the UK’s most valuable alcohol brand last year (Nielsen), while Budweiser was the second most valuable beer brand in convenience in 2021 (Nielsen). Super premium beer Corona has grown value sales at twice the pace of the category over L52W vs LY. This was driven by Corona 12pk 330ml bottles, which grew +20.1% vs LY in value, as well as the newly listed Corona cans (Nielsen).
“One way retailers can drive sales growth is by leveraging the mealtime occasion, an increasingly important opportunity for the Off-Trade,” suggests Mirpuri. “Three out of five beers are now consumed with food, and our most popular brand Stella Artois is actually now enjoyed by shoppers more often with food than as a standalone drink. Retailers should therefore consider cross-merchandising consumer beer favourites with snacks and meal deals.”
Alexander Wilson, Off Trade Category and Commercial Strategy Director at Heineken UK, comments: “Sales of Beer and Cider in the off-trade have been bolstered by evolving drinking habits in 2021, as many former pub-drinkers have stayed with the off-trade after periods of on-trade closures and continued to enjoy Beer & Cider for at-home occasions.”
There has been growing demand for premium Beer and Cider options for consumers to enjoy at home.
“Shoppers are increasingly looking for drinks they can purchase to elevate everyday drinking and dining occasions, something that only increased during lockdown and has remained in steady flow since,” says Wilson. “Whilst it’s essential to stock a strong range of staples in-store that shoppers can rely on, the value of having premium options on-shelf can’t be ignored.”
Another trend seeing growth year on year is the No & Low alcohol sector. Much of the driving force behind this increase is coming from Millennials and Gen Z consumers, as they seek to make more conscious choices when choosing drinks brands.
Similarly to this, young shoppers are looking for brands that align with their personal morals beyond just alcohol intake, with 66% of consumers aged 18-35 choosing to purchase products based on their “environmental friendliness” and over a quarter (28%) admitting they have switched brands because of a sustainability concern (Deloitte).
Heineken UK’s latest sustainable cider release – Inch’s – has proven this, with 60% of spend incremental to the cider category in 2021 (Kantar).
Heineken was the fastest growing major mainstream premium lager this year (Nielsen), following on from sponsorship of the UEFA EURO 2020 tournament, showing that shoppers look to it as their go-to beer that delivers on taste, whilst also being the number one beer associated with sporting occasions.
Heineken 0.0 has also done extremely well this year, seeing the largest growth of any non-alcoholic brand and remaining the #1 No & Low Alcohol Beer in the UK. This is mainly due to its taste credentials, something that’s increasingly important as consumers look to No & Low options they can trust, that not only delivers on a low ABV % but means they don’t have to compromise on quality either.
Birra Moretti is one of the fastest growing alcohol brands in the UK Off-trade, experiencing another year of double digit growth at +10.3% in 2021, largely due to its exceptional food-pairing credentials, especially when consumers are enjoying themselves at home.
Heineken UK has recently breathed new life into the Cider category by launching Inch’s – a brand-new, sustainable apple cider, with an exceptional taste consumers already love. Made from 100% British apples, grown and sourced within 40 miles of its mill in Herefordshire, Inch’s has the green credentials to appeal to consumers aged 18-34 who prefer to buy brands that have a social and environmental commitment.
Kevin Fawell, Off-Trade Sales Director at Molson Coors Beverage Company, comments: “Core lager can be overlooked among all the new innovations in the market, but it still accounts for 23% of total off trade lager sales (IRI). “Therefore, it is important to strike a balance between inspiring shoppers with a wide selection of exciting premium and flavoured options alongside best-selling core lines.”
As the number one lager brand in Great Britain (CGA), Carling is the ideal option to help retailers drive sales. Its balance of sweetness and bitterness make it a staple choice that can be enjoyed across a host of different occasions.
Coors is now worth almost £320million in the UK (CGA) and the brand has undertaken a full refresh – including switching from Coors Light to ‘Coors’ – as part of a multimillion-pound investment.
“Consumers will pay extra for a more premium choice when they’re socialising at home,” adds Fawell. “Covid has accelerated this, with world beer, super premium cider and premium ale all growing ahead of the core category.”
World beers continue to increase their volume share of the beer category (IRI), with consumers increasingly looking to expand their horizons beyond the more traditional options on the market. “Retailers’ ranges should cater for this and include options like Staropramen and Cobra,” suggests Fawell.
Volume sales of Staropramen are up more than 50% in retail (IRI), with its unique hoppy, malty flavour providing a point of difference that appeals to consumers. Due to its growing popularity, Molson Coors launched a new 6x330ml can multipack across the Staropramen range last year, tapping into increasing demand for multipack formats.
“People developed a taste for more sophisticated at-home dining during the pandemic and the taste for cooking more elevated meals themselves is here to stay,” says Fawell. “There is an opportunity for retailers to get creative and provide inspiration for shoppers looking to cook up a storm while driving incremental sales, by offering meal deals, recipe ideas and guidance on drinks pairings.”
Cobra – with its distinctive character and smoothness that is perfect alongside a curry – can be used as part of a meal deal for the perfect at-home curry night, alongside other favourites like poppadoms, onion bhajis and samosas.
The number of consumers moderating their alcohol intake has increased gradually over the past four years and, with more than one-third currently saying they are trying to moderate their drinking (Kantar), it is important to offer a balanced range that caters for this demand.
Increasingly consumers are switching between alcoholic and non-alcoholic options to moderate their alcohol intake, while still wanting an ‘adult’ beverage. Of those looking to moderate, the number turning to drinks with low-alcohol volume or non-alcoholic beer and wine is on the rise (Kantar) and Doom Bar Zero, the UK’s first zero-alcohol amber ale, is growing ahead of the category in terms of volume sales (IRI).
“Having a good balance of low-and no-alcoholic options is becoming increasingly important,” Fawell continues. “That’s why we’ve invested in our own offering and now have ‘no and low’ options for lager with Cobra Zero and Bavaria 0.0, cider with Rekorderlig Alcohol Free, and ale with Doom Bar Zero.”
Consumers have increasingly been creating their own mixed drinks to enjoy as they celebrate special occasions at home.
Molson Coors has launched Beverage Hub, a dedicated team to support the company’s growing portfolio of brands beyond beer and cider. The hub helps to connect retail customers with new brands in emerging categories, and has seen Molson Coors expand its offering into spirits and mixers.
Gin sales surpassed the £1 billion mark in UK retail for the first time in 2020, and to tap into this Molson Coors has partnered with Southwestern Distillery to increase distribution of their Tarquin’s craft gin range across the UK and Western Europe.
Southwestern Distillery is based near Padstow, close to Molson Coors-owned Sharp’s Brewery in Rock, and the two have already collaborated to develop the limited-edition Tarquin’s Hopster Gin, infused with aromatic hops.
Molson Coors has also joined forces with premium mixer brand Lixir Drinks to rollout their range in the UK off-trade. The eight-strong range of drinks are all made from natural ingredients, and includes Rhubarb & Ginger, Elderflower & Lemon, and Blood Orange & Cinnamon flavoured tonic waters for those looking to explore new and interesting flavour combinations.
Tom Smith, Marketing Director – Europe, at Accolade Wines, comments: “Whilst it has been an unpredictable year for the alcohol sector in the on-trade, lockdown understandably saw a rise in at-home drinking occasions and supported wine sales growth in-store and online.”
Throughout the last 18 months, brands have been key to attracting people to the category, offering familiarity and trust. Accolade Wines offers a variety of signpost brands for retailers, including the UK’s biggest selling wine (Nielsen), Hardys, as well as Mud House, Jam Shed and Echo Falls.
Accolade Wines Europe became the first major wine producer to be fully carbon neutral, as well as introducing brand innovations, including Jam Shed Malbec, Echo Falls Rosé Seltzers and Banrock Station’s market-first flat bottles.
“We’re always reviewing our brand portfolios to ensure that we have a range that meets consumer’s demands and can adapt to the changing alcohol landscape,” says Smith. “There is a growing appetite for sustainable wine especially for younger consumers, whilst the last year served as an opportunity for consumers to switch from soft drinks and opt for alternative low and no options. There is much more awareness now from consumers on low/no alcoholic options, which has been driven by NPD from big names in the industry.”
Hardys is not only the UK’s biggest selling wine (Nielsen), but also the number one Christmas wine in 2020 and is now worth £173m. Hardys will continue to capitalise on its Certainty campaign both in-store and through its marketing and social campaigns.
Echo Falls continues to be a key brand for the impulse channel and an important signpost for the category. It has been a year of refresh for Echo Falls having unveiled a brand-new look for its entire Fruit Fusions 5.5% and 9.0% portfolio earlier this year.
“New consumers who entered the wine category last year tended to be younger and less affluent, so it’s important to continue to appeal to this demographic,” adds Smith. “Fruit flavours and sparkling options are popular, especially at celebratory and social occasions.”
Having seen success since its first Shiraz SKU launched in 2017, last year saw the launch of Jam Shed’s Malbec variant to widen its portfolio and capture a new audience. Jam Shed is now worth £57.5m (Nielsen), growing 90% year on year following three years of triple digit growth.
The brand now includes five wines in its expanding portfolio: Shiraz, Malbec, Chardonnay, Rosé and the newly launched Chilean Merlot.
The New Zealand wine category continues to show strong performance in the UK, however we are starting to see the impact of a poorer vintage coming through in the market data. Last year, Mud House unveiled its new ‘Taste the Adventure’ marketing campaign as its looked to increase its share of the market. The brand is already the most recommended New Zealand wine in the UK (Wine Intelligence) and has seen strong year on year growth. Alongside this, Accolade also refreshed its packaging to reflect this ‘adventurous’ positioning and improve stand out on shelf. The Mud House brand has expanded into new origins with the launch of two new refreshing Chilean varietals, Sauvignon Blanc, and Rosé.
South Africa as a country of origin has underperformed in the past year, and as a result has contributed to sales declines, including for Kumala.
“As the number one brand in the South Africa category, we need to help educate consumers about the great wines from the region, as well as work with our retail customers to ensure that the South African category bounces back in-store,” says Smith. “A strong Kumala brand leads to a growing South African category, and we are refreshing the brand in 2022.”
Accolade’s core branded portfolio – including Hardys, Mud House, Jam Shed, Banrock Station, Echo Falls and Kumala – has been certified carbon neutral.
Lauren Priestly, Head of Category Development, Off Trade at Diageo, comments: “The at-home occasion is huge and this particularly grew last year as people discovered their inner mixologist – this trend may continue into 2022, therefore it remains important for retailers to stock a good stock of drinks brands.”
Vodka currently equates to 13.5% of total value share MAT in the off-trade (Nielsen) and is a spirit that lends itself to numerous occasions and moments. A versatile spirit, vodka is the base for many simple and classic serves that consumers can easily create at home.
Flavoured vodka is experiencing the fastest growth within the vodka category, having increased +30% vs LY , and recent innovations from Smirnoff, the world’s number one vodka brand (IWSR), cater perfectly to this trend. The new innovations include Smirnoff Raspberry Crush and Smirnoff Mango & Passionfruit Twist, and offer consumers the option to create simple but effective twists on classic serves. The latest launches are set to invigorate the vodka category, recruiting new drinkers through accessibility, great taste and ability to be enjoyed with friends as part of many delicious, simple and diverse serves.
Gin is a key player and is driving the biggest growth in spirits with flavoured variants making up 45.8% of total value share MAT and we expect this momentum to continue,” adds Priestly. “People are looking for quality drinks they can enjoy at home and gin forms the base of many popular mixed drinks such as G&Ts and Spritz serves.”
Pink gin has been one of the driving forces behind the category’s growth, offering a sweeter taste profile and encouraging customers to trial different options within the wider category. This has been led by products such as Gordon’s Premium Pink Gin (37.5% ABV) which was the biggest spirits launch in the last decade (Nielsen). Since then, exploration has continued, with popular flavour profiles such as citrus being introduced with Gordon’s Sicilian Lemon (37.5% ABV). There is still more growth potential through innovation and providing new taste profiles to consumers – as current performance shows that gin variants have contributed to +29.5m worth of value sales vs YA (Nielsen) since March.
Guinness accounted for 92% of total off-trade stout brand sales in the latest 52wks to the end of February 2021 (Nielsen). Guinness Draught in Can is available in both 4pack & 10pack formats which allows customers to recreate the Guinness ‘on tap’ experience from the comfort of their own homes.
“Inclusivity within a drinks range is also an important consideration, and we know that low & no beer options have been steadily growing for a number of years,” says Priestly. “The innovation, Guinness 0.0 taps into the increasing demand for high-quality and great tasting no and low alcohol options. Boasting the beautifully smooth taste, perfectly balanced flavour and unique dark colour that Guinness is known for, Guinness 0.0 offers Guinness with everything except alcohol. With evolving consumer expectations, it is vital to incorporate low and no alcohol options that deliver taste assurances.”
Across the off-trade, no and low spirits are the fastest growing no and low segment with volume sales at +251% (Nielsen). As a result, Diageo recommends placing recognisable category leaders on shelf to, such as Gordon’s 0.0% which launched in December 2020 and is already the top selling no and low spirit in the off-trade, and the newly launched Tanqueray 0.0%, to encourage people to trade-up.