Winners and losers in the alcoholic drinks market: Mintel
The popular ‘foodie trend’ is echoed in alcoholic drinks, observes Mintel; and a growing connoisseur spirit is further fueling the craft movement, with consumers keen to learn more about products and how they are made.
Meanwhile, consumers are seeking to limit or reduce their alcohol intake. Coupled with the interest in craft and premium products, this is encouraging a ‘quality over quantity’ attitude across alcoholic beverage categories.
This opens the door for smaller packaging formats, which allow consumers to enjoy a premium product in moderation, as well as giving manufacturers an alternative to raising prices.
"The ‘less is more’ ethos is alive and well among UK consumers when it comes to their alcohol drinking habits, with both alcohol moderation and avoidance widespread,” observes Emma Clifford, senior food and drink analyst, Mintel. “This is fostering a “quality over quantity” mindset which is driving a strong premiumisation trend."
The ale/bitter category has benefited from the craft craze in the beer market, with craft underpinning growth in recent years. Golden/light ale has, in particular, grown in popularity.
“The taste is not as strong as that of darker ales, or as hoppy as APAs and IPAs, making them a good option for people entering the category,” observes Mintel.
Premium craft brands work well for smaller beer formats, and these are driving growth in 330ml formats. These are positioned as drinks to be savored rather than devoured, thus falling in line with the ‘quality not quantity’ ethos.
Mintel sees gin’s resurgence continue, with volume and value retail sales up 35% in 2015 and 20% in 2016. And the trend is expected to continue over 2016-21, although the pace of growth is predicted to slow slightly.
Gin sales in the UK rose 20% in 2016
“The craft movement has provided some positive PR, serving to re-energize the segment,” says Mintel. “Brands such as Sipsmith have innovated with unusual flavors, breathing new life into the segment. However, the leading mainstream brands are also performing strongly, with all brands in growth.”
Dark spirits and liqueurs
Volume and value retail sales of dark spirits and liqueurs increased by 4% and 2% respectively in 2016. Growth has been seen across each of the four segments: whisky, brandy, rum and liqueurs.
“The rising popularity of bourbon and other imported whiskies has underpinned the strong performance of the whisk(e)y market in 2016, with sales of Jack Daniel’s growing rapidly,” reports Mintel.
“The rise of this brand fits in with a wider trend towards American brands, which is being driven by the younger generation.”
“The strong appeal of rum among young consumers is fuelling growth in this category.
"Market leader, Captain Morgan is helping to raise the profile of rum, and small, premium brand, The Kraken, is a rising star in the category.”
Again, consumers’ interest in quality over quantity should further fuel the rise of premium brands in this category, predicts Mintel.
RTDs continue to lose share in both value and volume terms within the wider white spirits and RTDs category. Negative associations with underage and binge drinking mean that the category has failed to return to the popularity it enjoyed in the late 1990s and early 2000s.
The category has also faced mounting pressure from flavored ciders.
Mintel expects RTDs to continue declining over the next five years, although to a lesser extent than that seen in 2011-16, propped up by the now more established presence of the canned RTD segment.
White rum continues to post a ‘lackluster performance’, with volume and value sales remaining flat in 2016 against a backdrop of growing retail sales of white spirits. The rise of dark/spiced rum has impacted white rum.
Mintel predicts that the market will struggle to attract new customers, with volumes expected to remain flat over 2016-21. An added challenge is that rum is imported, and so particularly exposed to exchange rates.