The own-label alcoholic drinks market has enjoyed steady growth in recent years, rising from £2.38 billion in 2008 to £2.66 billion in 2013, a 12% increase. However, this lags behind the 19% increase enjoyed by the wider own-label food and drink market, underlining the limited success of own-label alcoholic drinks. Wines have been the success story for own-label drinks, with a highly fragmented and poorly branded market enabling the own-labels to claim market-leading shares. Own-label spirits also perform well, enabling consumers to enjoy drinks such as vodka and brandy at lower prices.
However, own-label drinks remain a minority consideration in many other lucrative categories such as beer and cider. These are well-branded markets, and this has stifled the progress of own-label alternatives. Own-label brands in these markets have also been slow to react to trends such as flavoured drinks, further limiting the potential for growth.
Although the economy is in recovery, this has not yet translated to a significant increase in real disposable incomes. This means that there is still scope for own-brand drinks to increase their share of the market. However, as confidence improves, brands are likely to become more appealing to consumers looking to relieve recession fatigue. If own-label drinks are to remain part of consumers’ drinking repertoires in the coming years, then they will have to provide consistently high quality and innovative products.
Some 82% of adults have drunk branded alcoholic drinks in the six months to December 2013, compared to just 43% for own-label. Beer and still wine are the two most popular categories, with beer leading the way in terms of branded purchase, but falling to second place when it comes to the own-label segment.
Still wine is by far the most valuable own-label category and holds a 23% share of category sales, whereas beer is considerably smaller and holds only a 3% share. All other own-label alcoholic drinks are drunk by less than one in five adults, although this pool of users does help to drive own-label’s high share of sales in categories such as vodka and brandy/Cognac.
The global economic downturn benefited the own-label market as many consumers looked to rein in their spending and look for cheaper food and drink products.