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Alcoholic Drinks in the United Kingdom
Euromonitor International, Feb 2010
The Alcoholic Drinks in the United Kingdom market report offers a comprehensive guide to the size and shape of the market at a national level. It provides the latest retail sales data, allowing you to identify the sectors driving growth. It identifies the leading companies, the leading brands and offers strategic analysis of key factors influencing the market - be they new product developments, packaging innovations, economic/lifestyle influences, distribution or pricing issues. Forecasts illustrate how the market is set to change.
Why buy this report
- Get insight into trends in market performance
- Pinpoint growth sectors and identify factors driving change
- Identify market and brand leaders and understand the competitive environment
Product coverage: Beer; Cider/Perry; RTDs/High-Strength Premixes; Spirits; Wine
Executive summary
Financial instability trickles through
The impact of the credit crunch and the consequent decline in consumer confidence, failing banks and falling house prices, rising unemployment and the spectre of recession all had a severe impact on the alcoholic drinks market in 2009. Beer sales both in the on-trade and off-trade showed decline, according to the British Beer and Pub Association (BBPA). Consumers are still economising by foregoing nights out in the on-trade and trading down in the off-trade. The latest sales volumes indicate that consumers are even starting to drink less on the whole.
Positive growth for beer and RTDs
The UK alcoholic drinks market continued to struggle in 2009, with declining sales being recorded, albeit at a slower rate than in the previous year. The dynamic and rapid growth of cider sales and the launch of premixed drinks catering to convenience helped slow down the sales decline in the overall alcoholic drinks market.
However certain categories – especially those growing from a low base put in a better performance in 2009. As a result, Weissbier, low alcohol and imported economy beer showed some of the most dynamic growth in 2009. At the same time, wine volumes remained stable with just a 0.2% decline, indicating that wine drinkers remained loyal to their tipple despite the economic crisis.
Joint acquisition of Scottish & Newcastle
2009 was not a good year for acquisitions; mergers can be very taxing on management, so only the desperate or those with serious financial and operational capacity considered a merger or acquisition. The most notable deal was the joint acquisition of Scottish & Newcastle by Heineken and Carlsberg completed on 29 April. Through this deal the company Heineken gained a 50-year licence to Kronenbourg and Scottish & Newcastle’s assets and Carlsberg expanded its product portfolio with a number of brands, including Mythos from Greece, Russian brand Baltika and Grimbergen from Belgium, earlier this year.
Distribution heavyweights
Off-trade sales are heavily concentrated through the mainstream grocery giants with the likes of Sainsbury’s and Tesco. With a vast product portfolio, these chains are able to better position products at their most competitive prices and, in some cases, even pare them to a 0% margin for retailers. The scale and width of the offer carried by these retailers means they dominate the majority of price positions in alcohol, with the exception of super-premium products.
Future sales to benefit from hosting the Olympics
The market for alcoholic drinks is expected to experience a year-on-year decline of almost 2% CAGR constant value terms during the forecast period 2009-2014. The 2010 Football World Cup is expected to drive sales in the alcoholic drinks market, in particular beer, during 2010-2011. Although the event is being held in South Africa, the fact that the host country is two hours ahead of the UK means that kick-off times will fit well with UK drinking patterns. The 2012 London Olympics are also expected to increase tourism in London and bolster demand for alcohol during that period. Positive growth for the industry is not expected to take place until 2012, once economic stability has been re-established.
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