Gin ‘star performer’ in Western Europe
The firm analyzed six key markets: the UK, the Netherlands, France, Germany, Italy and Spain.
Gin was a ‘star performer’ in Western Europe in 2017: with double digit growth in Germany (+39%), Italy (+10%) France (+17%) and the UK (+24% YoY).
Beer grew across the six markets with one surprising exception – Germany - as a decrease in the traditional Pilsner left the category in the country flat year-on-year.
“Beer growth in other countries is influenced by premiumization and the trend towards craft. In spirits, there is a notable trend toward more modern spirits, particularly gin,” said Olly Abotorabi, senior regional insights manager, IRI.
“It’s no surprise that the likes of gin are proving very popular in many countries driven by an increasing number of small and niche batch distillers, celebrity culture and enhanced in-store exposure via displays during key seasonal events. Spirits in general are seeing good growth across most markets.
“Notably the move towards premiumization, flavor innovations and an increased appetite for beers and ciders with crafty credentials provide a huge opportunity for brands in this category.”
Winners and losers in European beverage market
Winners: beer, spirits, mineral water
Losers: squash/drink dilutes, colas
The overall alcohol category was one of the top performing FMCG categories, coming behind chilled and fresh and ambient at €62.4bn.
Mineral water outperforms cola across Europe
Meanwhile, in non-alcoholic beverages, bottled mineral water volumes are growing ahead of colas across key European markets, according to data from IRI: mirroring trends seen in the US.
The firm recorded 3.3% growth in bottled water but a 3.4% decline in cola year-on-year across the six markets.
Mineral water (unflavored, sparkling and still) has been growing in the UK (6.7%), Germany (0.5%), France (4.2%), Italy (4.7%), Spain (5.6%) and the Netherlands (8.9%).
Meanwhile, cola is in decline in the UK, France, Italy and Spain.
Total bottled water overtook soft drinks in North American for the first time ever in 2016, according to research from Beverage Marketing Corporation.
“Bottled mineral water volumes are now growing ahead of colas across the six countries, suggesting that more consumers are opting to re-hydrate, detox and consider their general wellbeing,” says IRI.
“Concerns regarding high sugar content linked to health issues like obesity and diabetes are playing an influential role. This decline in fizzy drink sales could be compounded further in the UK with the impending introduction of a soft drinks tax (April 6) and proposed further hikes in France where a levy has been in place since 2013.”
Growth in bottled water provides future opportunities: but an intensifying focus on protecting the environment should also serve as a wake-up call for companies, says IRI.
Therefore, the next challenge for category players will be to focus on sustainable production of plastics while return deposit programs and similar initiatives can be expected to grow.
The focus on sustainability is only expected to increase as public awareness grows.
“Celebrities are looking to jump on the bandwagon and highlight the need to cut plastic use in favor of less harmful and re-usable materials.”
