The pandemic has had an undeniable impact on the sale of consumer goods, particularly within the beer wine and spirits category.
The forced closure of pubs and bars moved many drinking occasions into the home, triggering unprecedented growth in the beer category. Beer sales rose 29% year on year across the total Off-Trade in 2020, with the Impulse channel growing ahead of the total market.
We have seen sustained demand so far this year, with beer category sales growing by 37% YOY and an additional £211.1m spent vs the same period in 2019 (Nielsen).
“We’re forecasting that 2021 will be another huge year for beer, with the total category growing by double digit and the convenience channel set to grow ahead of the market compared to the last year of regular trading in 2019,” comments Jessica Markowski, Wholesale Sales Director at Budweiser Brewing Group. “As lockdown restrictions are set to be lifted in stages, we are predicting particularly strong uplifts for Q1 and Q2 as the Off-Trade continues to benefit from increased at-home occasions.”
Whilst premiumisation has been a trend the UK has been experiencing for years, it accelerated in 2020. During the first lockdown of 2020, almost two thirds of shoppers claimed to be treating themselves at home. Alcohol was one area where they chose to splash out with 52% willing to pay extra for quality when buying alcoholic drinks to have at home.
“Last year, premium lager and world beer contributed the most absolute value growth to the overall beer category, so wholesalers should ensure both segments are well represented in their depots,” suggests Markowski. “Offering a strong range of premium beers, such as Stella Artois, Budweiser and Corona, will help stores cater to this trend towards premiumisation.”
Beer has become a new staple at mealtimes, with three out of five beers now consumed with food (Kantar). As the average consumer is increasing their purchase repertoire for moments at home (Kantar) and we are seeing the trend towards consumers shopping locally continue, independents can appeal to a new audience through food and drink pairings.
“Wholesalers can advise customers to create ready-made bundles, such as beer and pizza meal deals which proved popular last year, helping wholesalers boost sales,” adds Markowski.
The return of international sport this summer will be a strong driver of at-home occasions this year. The rescheduled Euros will result in a big summer for beer in the off-trade, and the Budweiser family will play a major part in this. Bud Light is the official sponsor of the England Men’s Football team and given that 55% of shoppers are more likely to opt for ‘official sponsor’ brands over their usual beer choices, this presents a unique sales opportunity for wholesalers.
Kevin Fawell, Off-Trade Sales Director at Molson Coors Beverage Company, comments: “Nearly half (46%) of shoppers are more inclined to trade-up to premium food and drink options when dining at home and, as a result, premium brands are gaining more and more traction. Covid has accelerated this, with world beer, super premium cider and premium ale all growing ahead of the core category.”
The Aspall Cyder range chimes in with this trend. It has been produced at the original Aspall Cyder House for almost three hundred years – a point of difference which really resonates with consumers. The packaging is sleek and sophisticated, giving it a more premium feel that appeals to those looking for something a bit different and special to enjoy at home.
In beer, continental-style pilsners are becoming increasingly popular, providing a more crisp and hoppy flavour than traditional lagers. Brands like Staropramen, which is in growth by 40% in the off-trade (Nielsen), bring new options to a retailer’s lager range to give people a chance to experiment and explore new tastes.
Consumers have been recreating more special occasions at home, such as creating their own ‘at-home menus’ for more sophisticated meals at home while their favourite venues have been closed, and are looking for more premium drinks options to accompany these. Cobra, for example, has a distinctive character and smoothness that make it an ideal accompaniment for a range of different cuisines and a host of different occasions.
The demand for more premium options comes hand-in-hand with a desire to try new and interesting flavour combinations. Particularly with cider, shoppers are becoming more adventurous and looking for flavours that are exciting and different.
“A key category driver in premium fruit cider is inspiring consumers who want new and interesting tastes from their drinks, particularly as the warm weather approaches,” adds Fawell. “Retailers should make sure they pay attention to their cider range this summer, balancing the classic favourites with new variations like our newly launched Rekorderlig Pink Lemon cider, to catch the eye of customers looking to try something different.”
The Rekorderlig Botanicals range, including recent addition Raspberry-Hibiscus and Rose, also offer a complex, distinctive flavour profile and are a great option for anyone looking for an alternative to a gin-style serve.
It is still important to note that core lager remains the engine room of the category. It accounts 31% of total lager sales and remains in growth (Nielsen).
“Carling remains the number one lager brand in Great Britain (Nielsen), with its perfect balance of sweetness and bitterness making it a staple choice that can be enjoyed across a host of different occasions,” says Fawell. “Therefore, it is important to strike a balance between inspiring shoppers with a wide selection of more exciting premium options alongside best-selling core lines.”
Coors became the sixth best-selling lager brand in the UK in 2019 (Nielsen), and, to build on this momentum, it has undertaken a full brand refresh – including switching from Coors Light to ‘Coors’ – as part of a multimillion-pound investment in the brand. This will help to drive ongoing growth in the premium 4% beer category, supported by a new ad campaign, packaging and point-of-sale material to help retailers continue to grow sales.
Low-and no-alcohol options remain a small part of the overall beer and cider category, but one that’s in huge growth, with sales increasing in volume by 26% (Nielsen).
“In recent years and months, there has been a huge increase in variety and flavour options in the category, which appeal to a much broader set of consumers,” adds Fawell. “The range available has never been better, and with so much diversity, more and more consumers are starting to take notice.”
Molson Coors recently expanded its low and no alcohol portfolio with the launch of Doom Bar Zero, the UK’s first widely available 0.0% ABV amber ale.
Molson Coors now offers drinkers alcohol-free options in lager (Cobra Zero and Bavaria 0.0%), Cider (Rekorderlig Alcohol Free) and ale.
In March Molson Coors rolled out Rekorderlig Pink Lemon cider to tap into the growing demand for new flavour variation in the cider category. Citrus ciders stormed the off-trade in 2020 and have already taken 6% of the premium fruit cider volume share, contributing to 22% of value growth to the category (Nielsen).
“While the Coronavirus pandemic has been an extraordinarily challenging period for wholesalers, retailers and suppliers alike, the cider category has shown itself to be remarkably resilient, with premiumisation and crafted ciders driving record growth in the off-trade now worth £1.3bn”, says Darryl Hinksman, Head of Business Development at Westons Cider.
“This has, in part, been driven by the enforced closure of the on-trade. With fewer people able to visit pubs, bars and restaurants across the UK, we have seen consumers redirect some of their spend towards high quality, crafted ciders, in a bid to recreate the ‘perfect serve’ from home.”
Consequently, the average price per litre has risen to £2.40 in the convenience channel, ahead of the total market (£2.31). This has been driven by the unwavering demand for crafted ciders – a subsector which reached triple digit growth – with independents seeing huge volume growth of +153.4% (IRI/Kantar). Crafted ciders continue to propel category growth and, within this, the top ten crafted brands represent 82% of crafted category value – led by Henry Westons.
In 2020, the category attracted almost a million more shoppers and cloudy and rosé ciders experienced explosive respective growth rates of 104.1% and 481.3% – far outpacing the overall category (IRI/Kantar). As such, these subsectors are important considerations for wholesalers looking to maximise sales.
“The figures suggest that stocking premium, branded lines – with provenance and heritage – which play into these subsectors will be wholesalers’ ticket to maximising sales,” adds Hinksman. “This is where our bestselling Henry Westons brand – worth £63.1M in total retail up +37.8% YOY – comes in.”
The Henry Westons brand is by far the largest glass bottled apple cider in the UK (IRI) and its continued popularity highlights the growing appetite for premium, traditional ciders. That’s why, last year, the brand was expanded to include three new variants: Henry Westons Vintage Rosé, Henry Westons Cloudy Vintage, and Henry Westons Organic Cider.
“By continuing to diversify our offerings we’re providing wholesalers with authentic, premium and high-quality choices within popular cider subcategories which will help them boost overall value sales,” comments Hinksman. “We’re always looking at what we can do to drive excitement, and sales, for wholesalers and their retail partners – watch this space!”
“The initial surge in demand in the off-trade channel following the Coronavirus crisis meant that production of priority, bestselling SKUs had to be ramped up significantly in order to help wholesalers and their retail customers avoid out of stocks,” says Hinksman. “However, the outlook for the off-trade cider category is no doubt a positive one, as it has yet again shown itself to be buoyant and in high demand.”
There have been clear changes to shopper behaviour as consumers have adapted in the wake of the pandemic. For example, initially shoppers reverted to fewer, higher spend shops and, as a result, larger packs are performing particularly strongly – ten packs have increased +40% YOY and the Stowford Press ten pack grew by 540% last year (IRI).
“In addition, convenience stores have become even more integral to British society as shoppers stayed local,” Hinksman continues. “For the cider category specifically, convenience sales grew +19.0% – ahead of the +17.9% growth seen in the total grocery market – which presents wholesalers with a crucial opportunity to drive sales by flexing their ranges according to changing consumer behaviour.”
“Cider is showing significant growth across multiple channels, including convenience, meaning there’s a clear opportunity for wholesalers to grab their share of the huge sales opportunity which the cider category presents,” Hinksman suggests. “In the current climate, this means making the bestsellers the biggest priority, as these are the products which are going to sell-through and drive value growth. Wholesalers should look to Henry Westons Vintage, worth £56.5 million and growing +30.7% year-on-year (IRI) to drive sales.”
Premiumisation continues to be the driving force for growth across the off-trade with half of cider drinkers saying that small price differences between premium and standard cider make it worth trading up (Mintel). However, compared to other categories – such as lager and spirits – cider has not yet seen the same level of premiumisation, signalling there’s more room for value growth.
“To make the most of this opportunity, and drive higher value sales, wholesalers should ensure they are maintaining supply of the bestselling, premium ranges throughout the year,” Hinksman recommends.
Crafted cider remains an important consideration, as the price per litre is significantly higher than the market average (£3.23/L versus £2.31/L). These higher-value, traditional ciders continue to drive trade-up, and have become especially important over the past year as consumers looked to authentic, heritage brands for products they could count on to deliver a high-quality serve at home.
“In general, wholesalers would do well to weight stock in line with the cider market to maximise sales,” Hinksman adds.
The latest data shows that apple and fruit ciders continue to dominate, accounting for 60% and 35% of total off-trade sales respectively – with pear ciders now accounting for just 5% of sales.
“Therefore, apple and fruit ciders should take priority in the cider fixture, and bestsellers like Henry Westons Vintage should be paramount,” Hinksman suggests. “As fruit ciders account for a third of overall sales, they should take up approximately one third of the shelf space in-depot.”
Furthermore, no and low alternatives have grown by +32.6%, thanks to an influx of new shoppers into the category. These products attract a more affluent shopper, and 3.2% of cider buyers ONLY purchase no/low alcohol cider – demonstrating the incremental value these products are adding to the overall category.
“Consider stocking these next to your premium bottled and canned ciders for the best ROI,” Hinksman advises.
When looking at formats, canned offerings continue to prove attractive to shoppers who like this lightweight and recyclable format. Cans now make up more than half (59%) of cider sales and this format is still in growth (+31.7%).
Glass has a 29% share and is relatively static, but the biggest loser is plastic bottles, sales of which have tumbled following the introduction of Minimum Unit Pricing in Scotland and now Wales, and the fall in popularity of plastic amongst shoppers.
“Plastic formats now account for just 10% of off-trade cider sales in the convenience channel, so wholesalers should think carefully about how much space they dedicate to this in-depot,” Hinksman concludes. “To capitalise on the cider opportunity, wholesalers should adapt their ranges in line with the most popular products and formats.”
Chris Milton, Off Trade and Export Sales Director, Thatchers Cider, comments: “Trading up to premium has been evident throughout 2020, and that momentum will continue with shoppers prepared to pay more for quality.”
The total cider and perry category saw sales rise by 24.1% by value in the last year (IRI).
In 2020, Thatchers attracted some 800,000 new shoppers to the brand, while Thatchers Gold saw value sales growing by +61.6% (IRI).
“Cider shoppers love experimenting. So retailers are looking to refresh and review their cider selection with new, innovative ciders,” adds Milton. “Keep your cider range vibrant and on trend by stocking the ciders that everyone is talking about. Thatchers Rosé is on everyone’s lips! Beautifully pink, sweet and sparkling, and available now. And add some Zing to your range with the amazing success of Thatchers Cloudy Lemon, to give your customers a clear choice of fruit flavours.”
There’s definitely room for both cans and bottles in store. Well over half of all cider purchases in Convenience are now in can. Thatchers uses lightweight cans to reduce its carbon footprint, and its recyclable cardboard outers mean that there are no plastic rings on its 4-can packs.
Larger pack formats have worked well in the last year and up-selling on core lines, Gold and Haze 10 packs will be important for social gatherings as restrictions lift.
Thatchers is seeing clear growth in bottled cider, particularly with the over-45s. The brand’s No 1 performing bottle cider is Thatchers Katy.
All of Thatchers’ ciders are suitable for vegetarians, vegans and are gluten free.
Thatchers has unveiled a new marketing campaign for 2021, British Cider Time, that will kick off as the British public has its eyes on warmer weather, meeting up with friends and family, and the start of a summer of UK holidays. The multi-media campaign will be seen nationally, throughout Spring and Summer, leading with Thatchers, The Family Cider Makers TV ad, whilst giving each cider brand a chance to shine and resonate with their target audiences.
Norbert Jozsa, Head of Category and Insight – Europe, at Accolade Wines, comments: “We think people will be prioritising family and friends, as well as putting more emphasis on making social occasions special where possible. Single serve and can formats will continue to grow in popularity – these have been particularly successful in the convenience channel indicating that health, moderation, and sustainability (with reduced chance of waste from small formats) remain a priority for consumers.”
Accolade expects to see a growth in wine of tap (bag in box) options, driven by the combination of increased demand and the wider and more rounded choice available to shoppers.
Rosé will continue its evolution with further growth expected, whilst Accolade also expects that both Sauvignon Blanc and Malbec will continue to be strong throughout next year.
“At-home occasions are sure to become much more relevant as majority of companies plan to continue operating remotely and the household becomes a multiverse, serving a wider purpose than ever before,” adds Jozsa.
Hardys remains the number one brand in the channel and has grown by 16.8% in the past 12 months, driven by a full packaging update and the ‘Certainty’ campaign that ran from March 2020 onwards. This built on the brand’s celebrated reputation of 165+ years of wine making and over 9,000 global awards, providing consumers with certainty in their wine choice, every time.
Echo Falls is the third biggest brand in this channel, growing 7.4% year on year. It has been an exciting year for Echo Falls with a full redesign across its entire portfolio, alongside new brand positioning which intends to recruit younger shoppers and expand the category.
Looking at varietal performance, Sauvignon Blanc, Pinot Grigio and Chardonnay are the best performing white wine varietals in the sector, therefore must-stocks for wholesaler. For red wine, Malbec has continued its accelerated growth in recent months and has seen the highest value growth (Nielsen) and is a must stock for 2021.
Having seen phenomenal success since its first Shiraz SKU launched in 2017, last year saw the launch of Jam Shed’s Malbec variant to widen its portfolio and capture a new audience. Jam Shed is UK’s fastest growing top-50 wine brand (Nielsen) and the new Malbec variant taps into the growing consumer demand for Argentinian Malbec, the third most popular red varietal in the UK. The Malbec category is worth over £277m and is growing at a rate of 19.3% – faster than any other variety within the top 20.
“Merlot, Shiraz and Cabernet Sauvignon also should be part of a wholesaler’s red wine range, as these are well-known varietals that continue to grow,” suggests Jozsa.
It has also been a strong year for rosé wine as well, which has seen the biggest value growth versus last year’s performance, as new drinkers into the wine category continue to search for sweet and simple styles. Therefore, Accolade introduced the new Echo Falls Rosé Seltzers last year. Available in three flavours; Blueberry & Hibiscus, Strawberry & Pink Pepper, and Raspberry, Lychee & Rose varieties, the seltzers are intended to appeal to consumers looking to moderate their alcohol consumption.
Rosé will continue its evolution with further growth expected, whilst Accolade also expects that both Sauvignon Blanc and Malbec will continue to be strong throughout next year.
Following the hugely successful launch of its first ever neck flag promotion, Jam Shed unveiled the new Jam Shed Malbec variety in August 2020 and is already worth £3.2m – making it the 8th biggest Argentinean Malbec within the last six months. Jam-packed with rich, opulent plum and blackberry flavours and rounded off with a hint of cocoa and vanilla, the new Jam Shed Malbec is aimed at casual wine drinkers and is positioned as an accessible version to introduce new consumers to the category. It can be enjoyed at room temperature or served slightly chilled as a great accompaniment to barbeque, steak, or hard cheese courses.
As a result of the increased demand for Seltzers, Echo Falls launched its first ever Rosé Seltzers in August 2020, intended to appeal to consumers looking to moderate their alcohol consumption and to capitalise on the category’s continued growth. Available in three on-trend fruit fusion flavours: Blueberry and Hibiscus, Strawberry and Pink Pepper and Raspberry, Lychee & Rose, these 250ml cans are ideal for out of home consumption for those looking for a lighter option to enjoy with friends and they are easy to recycle, catering to the sustainability conscious.
Already the UK’s number one fruit fusion and flavoured wine brand, the Rosé Seltzers are aimed at those cutting back and cutting out.
Lockdown has seen many drinking occasions shift back into our homes, with needs changing and as a result, there have been +7m additional off-trade occasions (Nielsen). During this period, we have seen wine benefit more than other categories, due to its heartland occasions, such as staying in as a couple or as an everyday drink, naturally becoming more important during lockdown.
“We expect to see the No/Low alcohol category entering the second stage of evolution in 2021 with new entrants offering innovative products and flavours, replacing some of the originally listed lines,” Jozsa continues. “Offering an alternative option where full strength wine or alcohol is not always a choice, opportunities to target new consumers will continue to increase.”
In 2021, financial concerns will continue to be high for many following a difficult year so value is important, but what we’re also seeing is a focus on consumers enjoying more of the small pleasures.
“Therefore, it’s important for wholesalers to stock a variety of tiers, with easy drinking entry level wines but also trade up options such as New Zealand Sauvignon Blanc and Argentinian Malbec,” adds Jozsa. “Big brands will be key, as consumers will be looking for confidence and reliability in the products they do choose to spend their money on.”
Hannah Dawson, Head of Category Development, Off-Trade at Diageo, comments: “Wines and spirits category in the off-trade remains highly popular amongst consumers and tapping into this will be crucial for retailers in the months ahead as the category continues to present significant trading opportunities.”
Across the UK, beer is ranked as the number one category within beers, wines and spirits (Nielsen). Its versatility and breadth of styles and formats caters to a range of consumers and occasions and it successfully taps into a number of key trends such as balanced choices, taste discovery and premiumisation.
“The ongoing popularity of beer makes it a must-stock for retailers and ensuring the range remains updated and relevant in line with launches and current trends will be the best way to continue driving sales,” says Dawson.
“When planning a beer range, it is worth offering a selection of much-loved, recognisable brands, such as Guinness, so that consumers can navigate their choices, and feel confident in tried and tested quality experiences,” suggests Dawson.
Retailers can help consumers recreate the Guinness ‘on draught’ experience at home with the Guinness Draught in Can 4pack and 10pack.
“Within spirits, there are a number of key trends for retailers to keep in mind in order to attract customers and maximise sales,” adds Dawson.
Gin is a key player and is driving the biggest growth in spirits with flavoured variants making up 45.8% of total value share MAT (Nielsen) and Diageo expects this momentum to continue. People are looking for quality drinks they can enjoy at home and gin forms the base of many popular mixed drinks such as G&Ts and Spritz serves. Pink gin has been one of the driving forces behind the category’s growth, offering a sweeter taste profile and encouraging customers to trial different options within the wider category. This has been led by products such as Gordon’s Premium Pink Gin (37.5% ABV) which was the biggest spirits launch in the last decade (Nielsen). Since then, exploration has continued, with popular flavour profiles such as citrus being introduced with Gordon’s Sicilian Lemon (37.5% ABV). There is still more growth potential through innovation and providing new taste profiles to consumers – as current performance shows that gin variants have contributed to +29.5m worth of value sales vs YA since March (Nielsen).
“Alongside gin, retailers should ensure plenty of shelf space for RTDs as consumers are continuing to seek out convenient options which can be served quickly and don’t compromise on quality or taste,” Dawson continues. “New data has found that the RTD category is growing slightly ahead of the current off-trade BWS market at 22.5% (Nielsen) and in light of this, we strongly recommend stocking a wide range of RTDs. From best-sellers, such as the classic London Dry, to more recent innovation such as Gordon’s Pink Martini (5%) and Smirnoff Passionfruit Martini (5%), retailers should incorporate a wide variety of RTD options at different price points and taste profiles to generate excitement over a beers, wines and spirits range and maximise profitability.”
“When it comes to beers, wines and spirits, the choice is vast and retailers need to ensure that they are regularly communicating with their shoppers to stock their favourite liquids,” suggests Dawson. “By placing well-known brands together on shelf and blocking sub-categories together, retailers can help to ease the customer journey and make navigating the sheer range of brands a smoother process. Clear signposting and POS will also allow beers, wines and spirits ranges to stand out instore and retailers can look to cross-merchandise spirits with quality mixers and beers with snacks and treats to educate consumers on serve suggestions and encourage bigger basket spend.”