Winner and losers in the UK alcoholic beverage industry

By Rachel Arthur contact

- Last updated on GMT

Prosecco: putting the fizz in the UK alcoholic beverage industry. Pic: iStock/manuta
Prosecco: putting the fizz in the UK alcoholic beverage industry. Pic: iStock/manuta

Related tags: Alcoholic beverage

Prosecco’s rise shows no signs of slowing down, but is the future less rosy for rosé wine? Mintel picks out the winners and losers in the UK’s alcoholic beverage industry in 2016. 

British consumers are growing tired of austerity. While they may be drinking less often, they’re looking for better quality when they do so – the rise of craft beer being the perfect example.  

Mintel predicts that there will be little overall volume growth in the UK alcoholic beverage market, but values will continue to rise steadily to reach £47.9bn ($69bn) by 2020.

Winners: Prosecco, beer, and flavoured cider

Prosecco

Value sales of the sparkling Italian wine have now passed that of Champagne in the UK. Mintel says that Prosecco’s rise over the last five years shows no signs of slowing down.

“While Champagne did bounce back in 2015, Prosecco’s performance was far stronger, with the segment continuing to cater for celebratory drinking occasions but often at a lower price point.”

Meanwhile, English sparkling wine’s reputation is growing, particularly as it picks up industry awards. It is well placed to enjoy another strong year, says Mintel.

Beer

This year is going to be a big year for beer, with good news for both small craft brewers and large multinational companies.

Three high-profile sporting events – the Rugby Six Nations, Olympic Games and the Euro 2016 football tournament – are expected to boost volume sales in both the on and off trade.

“While these events will mainly benefit mass-market brands (many of whom are sponsors), craft beer should continue to thrive,”​ says Mintel. “With new breweries emerging on a weekly basis and many retailers expanding their craft ranges, this segment should continue to grow for many years yet.”

Flavored cider

Over the past decade, cider has been one of the best-performing drinks categories. However, a dip in volume sales in 2014 was followed by a larger 20m liter decline in 2015 (values declined for the first time in a decade as well).

The bright spot in the cider category is flavored cider, but how long will this last?

“Flavored cider continues to perform well in an otherwise stagnating cider category. While some apple cider brands are performing well, the category’s overall performance is being propped up by the growth of brands such as Kopparberg, Rekorderlig and Old Mout. However, it is expected that the segment will again see a slowdown in this rate of growth as many flavored cider launches are adding little which is new to the market.”

Losers: White rum, RTDs and rosé

White rum

Dark/spiced/golden rum has been thriving, but white rum has found recent years more challenging.

“White rum is expected to continue losing out to darker rums and other white spirits,” ​says Mintel.

RTDs

‘Alcopops’ are well past their heyday, and RTD alcoholic beverages continue to suffer as a result.

“RTDs such as WKD and Bacardi have been in long-term decline, suffering from their associations with the unfavorable alcopops term. These drinks have also been directly affected by the rise of flavored ciders, which are also resonating strongly with under-35s in particular.

“Despite regular innovation from brands such as WKD, the segment is expected to continue falling in 2016 and beyond.”

Rosé wine

Rosé was a huge success story for the UK – so what’s changed?

Flavored cider and flavored wines are challenging the category’s future, says Mintel.

“Rosé wine appears to be on a downward curve after experiencing growth in the post-recession years. The segment’s core consumers of women and under 35s are likely to be increasingly won over by flavored ciders but also the growing flavored wines segment, pioneered by Echo Falls’ Fruit Fusions.”

Related topics: Markets, Beer, Wine, Spirits, Cider

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