As we saw with shopper habits during the pandemic, consumers tend to be brand loyal within beer and consumers claim to have traded down brands less in alcohol vs other categories (Shopmium), seeing it as a treat when they might be cutting back in alternative areas of their lives.
As pressure on household expenses continues, consumers are compromising on out of home spend, as a first approach, with 89% of British consumers saying they will save money by eating out differently (IGD). This could mean that shoppers will look to get that treat in the home, as they did during the pandemic.
Miriam Thompson, Off-Trade Category Development Manager, BrewDog PLC, comments: “We know Taste (66%), Quality (50%) and Range (45%) are the top drivers to purchasing BrewDog, with Well-Priced at 29%. We expect these to remain a priority as consumer behaviour changes and they cut back in other areas of their lives, reducing overall store spend in-store.
“In order to maintain their brand loyalty, what we can expect to see is shoppers looking for alternative more cost-effective formats. In the long-term where shoppers are looking for value, larger pack sizes and formats i.e., 6-10-pack, can be a key way to appeal to shoppers that are feeling the strain, often delivering more value for money than smaller packs or single cans.”
However, in the short-term, if a shopper is trying to reduce their basket spend and only has say £10 left in their budget, a larger multipack of beer that exceeds £10 could be regarded as a big-ticket item they can’t afford in that shop on the day. So, alternatively they will stay loyal to the brand, but trade down to a smaller pack, albeit a higher price per litre (Kantar).
“To succeed during this time, the focus needs to be on format,” adds Thompson. “At BrewDog, we have a full range of pack sizes from 4-packs through to 12-packs, enabling us to meet all shoppers’ needs and fit all budgets.
“Where needed we’re concentrating on a streamlined range of superhero brands, which each have a key role to play in and provide genuine growth, whilst ensuring that any innovation really adds value to the category.”
BrewDog accounts for 50% of value share in Craft Beer and has some of the leading brands, with Punk IPA the number one (worth £55.5m), Hazy Jane at number 2 (£26.3m) and Lost Lager at number 3 (£24.2m, Nielsen).
“Multipacks are a key growth driver for the category, and we’ve placed our focus on mid-size multi-packs, as they become more common place within the consumer repertoire, particularly for summer socialising,” says Thompson. “BrewDog Punk IPA is the number one craft beer brand (Nielsen), and therefore acts as a signpost for the category – available in multiple formats, including single cans, 4-pack, 8-pack and 12-pack, making it accessible for shoppers in all channels.”
BrewDog Mixed Packs have also been an important recruitment tool for the category. The company’s research shows that 50% of first-time purchases come from multi-packs, and larger mixed formats significantly over index with first time buyers. By working with customers to increase distribution of these formats, the brand has been able to engage more shoppers to trade up in weight of purchase and encourage them to return to the category.
However, the 4-can pack remains the most important craft beer format throughout the year with 47.4% share (Nielsen), so it is important to have a mix of formats available to meet different shopper needs.
Calli O’Brien, Head of Marketing at Aston Manor Cider, comments: “It’s been well documented that as a nation, we’re already facing challenging times due to the cost-of-living crisis. Consumer confidence in the UK is currently at a record low (GfK), even lower than the 2008 global financial crisis. This paints a grim picture of the UK public’s mood and as a result, decision making around expenditure is being heavily impacted.”
Therefore, it is no surprise that 72% of UK households are now impacted by the rising costs of food and drink (Levercliff). 1.3m households are at risk of falling below the poverty line, as analysts report that household costs for families with two children have risen by £400 a month (The Guardian).
The reality is we are all making savings to varying extents. Not just to make ends meet, but to also be able to afford the things we value most.
While this year has caused many to pay more attention to what they are spending their hard-earned money on, it is worth remembering that the average consumer was feeling the pinch even before 2022. Since Covid hit, the number of financially constrained consumers has risen from 23% to 59% (Nielsen).
“Wholesalers therefore need to continue working with brands that deliver more bang for their buck,” adds O’Brien. “Aston Manor’s ethos is all around affordability. We are here for shoppers, helping them to save with our affordable cider, allowing them to focus their spend on what really matters. Our range provides shoppers with an affordable solution, without trading down on quality, so they can be assured they are not compromising when needing to spend a little less cash on cider.”
Larger multi-packs are also important and ensure consumers can keep their supply stocked up to enjoy with friends and family. Product packs such as the pint cans in the Crumpton Oaks four-pack, are a popular option to enable consumers to enjoy hygienic single-serve options.
While sustainability remains a priority for many people (49% think that recyclable / reusable packaging is important, Dohler), single-serve options such as cider in cans and bottles continue to play a role for those who are more aware of hygiene when sharing a drink with friends and family.
“A third of shoppers only ever buy cider in cans so it is important wholesalers stock both bottles and cans in order for retailers to provide choice to consumers,” says O’Brien. “Frosty Jack’s and Crumpton Oaks Cider come in both pack formats and we recommend wholesalers dual stock plastic bottled products alongside cans, to help attract more customers into stores.”
Crumpton Oaks, launched a four-pack pint can to broaden the brand’s consumer base, attract new shoppers to the category, and reinforce its quality and value proposition.
Aston Manor’s state-of-the-art production facilities means shoppers can get their hands on award-winning, great quality cider that doesn’t cost the earth.
Tim Dunlop, Brand Director at Hammonds, comments: “The summer months are a prime opportunity for alcohol purchases and cocktails at home is a trend that is set to continue strongly. Consumers want products that are ready-to-drink, portable and convenient while still meeting their flavour and taste expectations. BuzzBallz Cocktails ticks all these boxes, offers something unique and innovative to consumers, and brings excitement to drinking occasions.”
They are a different, no-mess solution with a strong visual appeal and the unique ball shape is perfect for posting on social media. At 13.5% ABV BuzzBallz are one of the few bar-strength cocktail options in the RTD and premixed cocktail market.
“There are huge opportunities for depots and their customers to drive drinks sales in the run up to the summer season,” adds Dunlop. “To maximise sales, wholesalers should stock a range of contemporary, eye-catching premixed drinks options, highlighting ABVs, price points and quality, to demonstrate the breadth of options available.”
Pre-mixed cocktails are expected to increase share of the RTD market so BuzzBallz Cocktails present a significant opportunity for wholesalers and their customers.
RTDs are a fast-growing category, yet the market is crying out for more innovation and excitement and BuzzBallz Cocktails is the coming together of indisputable fun and quality.
“We’ve created a real buzz in the USA and we know the UK has every potential to follow in its footsteps, with the right brand proposition and quality credentials,” says Dunlop. “Summer 2023 will be key as there will be so many opportunities to tap into once the good weather kicks in. We’ve also got sporting events such as the Women’s World Cup, and the men’s Rugby World Cup which will bring people together and the round ball shape really ties in to the sporting theme. We’d advise depots to stock up early to be ready for the bumper summer season.”
Made with premium spirits, and bursting with real fruit juice, natural flavours and ingredients, BuzzBallz Cocktails are unique and the fun packaging aims to give great shelf impact to drives impulse purchase.
BuzzBallz Cocktails are fully recyclable and use 15% recycled plastic in their construction. Plus, extensive branded POS materials are available including display units, counter and chiller racks, and eye-catching signage to add appeal and create a buzz in depots.
Six SKUs are available to wholesalers via exclusive distributor, Hammonds of Knutsford: Choc Tease, Tequila ‘Rita, Strawberry ‘Rita, Lotta Colada, Chili Mango and Espresso Martini.
All 200ml ballz are 13.5 per cent ABV with an RRP of £3.85 each.
The UK launch strategy is to target 25 to 40 year olds, living in urban areas, who enjoy socialising with friends while on the go, in the home, garden or park, and on their way to events and festivals.
Alexander Wilson, Category & Commercial Strategy Director at Heineken, comments: “Beer has continued to buck a wider retail alcohol category decline trend over the past six months with shares up 0.2% in the last quarter alone (Nielsen). Contribution from both premium and No and Low beers has bolstered the value growth as consumers seek better quality in-home drinking experiences from well-known and trusted brands during the cost-of-living crisis and move from wine and spirits into beer (Nielsen).”
Off-trade beer sales over the last six months have also shown the category withstood a wider retail alcohol sales dip following the pandemic as consumers continued to re-enter the on-trade. Within this, Heineken UK’s portfolio of brands remains a key player in the UK beer market and is driving growth across the category with its extensive portfolio, offering a range of beverages for all occasions.
One key trend occurring since the cost of living crisis is the growth of smaller packs. We are seeing smaller multipacks – such as small and mid-packs growing their share of spend and expect this trend to continue over the coming months as many look to continue shopping but with a more restricted budget.
“Since shoppers started reverting to these habits of making smaller, but more frequent shops, retailers should be looking to supply customers with choice and offering a range of beer multipack sizes to help cater to a variety of consumer occasions,” adds Wilson. “It is also interesting to note that beer won the battle for share of total alcohol spend at Christmas in 2022 for the first time in a number of years – perhaps in part driven by the lower ticket spend of purchasing beer over spirits and sparkling wine.”
In moments of crisis, consumers also look to brands they know and trust, and one of Heineken’s heartland brands that this applies to is Fosters, currently no.2 in the classic lager category. This year the brand is benefitting from a £4m investment campaign, which includes TV and digital advertising, strategic partnerships, and on-pack promotion.
Premium offerings are growing despite the cost-of-living crisis. While shoppers are attempting to make savings across large expenditures, such as household bills or eating out, smaller purchases like alcohol are one area where consumers are happy to spend a little more. Premium lager has grown +10.6% in the last quarter, with huge growth in penetration as consumers want better quality products (Nielsen).
“This trend has been consistent over the past two to three years and the key brand that is driving this growth is Birra Moretti which has grown an incredible 42% since 2016 (Nielsen) and is now the leading premium brand in both the on and the off trade,” says Wilson. “We expect premium lager and Birra Moretti growth to continue in 2023 and have already seen this in January and February of 2023. In terms of what it means for the category, expect more advertising, activation and innovation from brands in premium. For Birra Moretti, we’re increasing our advertising on the brand to over £15m support. This will come to life for consumers with our new ‘Live Italian’ tie up on Amazon Prime, a glassware promotion celebrating the regions of Italy and increased availability of our different pack formats.”
John Price, Head of Marketing at KBE Drinks, comments: “Obviously it can depend on geographical location, but in general terms, the cost-of-living crisis doesn’t seem to have impacted on consumers’ choices with our latest data showing standard lager sales in the off-trade down by 17% (Nielsen), whereas world lager sales are only down by 5% (Nielsen).”
The ‘drinking less but better’ trend is therefore still very much prevalent, which has seen consumers increasingly willing to spend more to treat themselves to premium and super premium lager brands, which is in turn driving increased value in-store.
“These premium world lagers, such as our very own Kingfisher and Sagres, are a great option for wholesalers and convenience retailers to stock, as they are bang on trend and can typically be charged at a minimum of 30% more than other more mainstream options,” says Price. “And if anything, the cost-of-living crisis should probably present an opportunity for off-trade retailers to exploit, as having less disposable income in their pockets may well mean consumers make less visits to pubs, bars and restaurants and probably more eating and drinking at home.”
“I think wholesalers and retailers should stock a range of formats to ensure they don’t miss out on any sales opportunities,” adds Price. “A good selection of four packs is important, as well as some larger pack formats to appeal to those people who are perhaps looking to save money, enjoy a ‘big night in’ or are attending an outdoor event or summer party.”
“I think pairing beers and ciders with food is possibly an under-explored opportunity for convenience retailers to consider when trying to drive incremental sales,” Price continues. “With an increasing number of consumers making less visits to pubs, bars and restaurants at the moment due to on-going financial pressures, this almost certainly means more eating and drinking at home, where they will still want to make home meals as authentic as possible, which means matching their beer choice to cuisine. So, for example, if they are eating Indian food, then pairing it with the only authentic Indian beer brand, Kingfisher, is a great idea, or perhaps if they are eating a Nandos-inspired meal, then pairing it with an authentic Portuguese lager like Sagres. Retailers should respond to this trend with clearly sign-posted meal deals and inspirational ideas for pairing beers with food.”
KBE Drinks recently announced a new addition to its portfolio with the signing of a three-year distribution agreement for their packaged products with Japanese giant Sapporo Breweries Limited. KBE had been searching for the right super-premium lager to complete its range, and in Sapporo, it now has the perfect brand to enter this emerging sub-category. With an ABV of 5.0%, Sapporo Premium Beer is available now in 650ml cans.
“I think wholesalers should stock a variety of standard and premium brands in a range of formats to ensure they don’t miss out on any sales opportunities” Price adds. “We also know the no and low alcohol beers are continuing to grow in popularity so ensure you have some credible options on offer. One such option could be our Sagres 0.0% which comes in packs of 24 x 330ml cans or bottles and is suitable for both vegans and vegetarians. It’s warm and golden in colour and comes with a taste profile which is mild and fruity with a slightly bitter edge.”
Jo Taylorson, head of marketing and product management, Kingsland Drinks, comments: “We’re expecting a bumper summer season for alcohol purchases and the opportunities for wholesalers are there to be tapped into for wine, spirits, RTDs, cocktails, and beer. As the cost-of-living crisis continues, it’s important for wholesalers to offer a range of wines to suit all budgets, and to cater for both everyday occasions as well as premium options. We anticipate there may be more socialising in the home this summer, so value and quality are the order of the day.”
By offering a selection of established of wine brands (across all price brackets) and championing new and trending drinks options, wholesalers can help local retailers establish themselves as a go-to destination for alcohol purchases.
“The key is for wholesalers to really understand how different drinkers are approaching drinking occasions and ensure that they are offering their customers that breadth and depth of choice to put in front of consumers,” adds Taylorson.
Some consumer groups will be looking for a premium wine to trade up to something special for a dinner or summer gathering, while others will be shopping for beers, pale ales and ciders to experiment with new brands and flavours.
Shoppers will also be looking for new innovations such as fun RTD cocktails and canned wines, which offer contemporary flavours and tastes that have been missing from shelves until recently. Kingsland’s best-selling products over summer tend to be traditionally popular wines such as The Hidden Sea Chardonnay or Rosé, as well as those that have good recognition for the brand or the varietal for an easy decision at fixture.
“Andrew Peace Chardonnay and Shiraz is one of those,” says Taylorson. “It’s such great quality wine at a really good price point and consumers know they can rely on it as an easy-going red that guests will enjoy.” There is also significant growth in the canned wine and RTD categories with products such as Mix Up RTDs proving very popular. Canned wine and RTDs are set to be a big growth area this year as brands compete for shelf space.
“The beauty of these products is that the single serve measures encourage trial and experimentation,” Taylorson continues. “It is an extremely cost-effective way for consumers to try new flavours, products and brands, plus they’re portable for shoppers so depots should ensure that they stock a selection of canned alcoholic drinks to maximise sales.”
“The smaller format of canned RTDs, their environmental credentials and their appeal across a spectrum of alcohol consumers, occasions and experiences, make canned wines one to watch,” adds Taylorson. “They account for lots of the NPD we’re seeing, and we expect the category to come into its own as canned wines establish themselves among consumers.”
Elise Hockridge, Customer Marketing Manager, Kopparberg, comments: “With a host of NPD, and more consumers continuing to trade into the category, Alcohol Free continues to be one of the top performing categories in BWS.”
What is becoming increasingly evident, is that not all alcohol-free shoppers buy into the category purely because they don’t drink alcohol; with many customers being transient and switching into the category when they plan on drinking less (as opposed to not drinking at all).
As such, many alcohol-free occasions happen alongside full-strength ones. Where we had previously seen Dry January and Sober October dominate the alcohol-free space, we now see a year-round affinity with these products through various occasions.
As we see an increasing number of consumers choosing not to drink at all and a growing base who are actively moderating, the need for a strong alcohol-free range throughout the year for all possible occasions, is more important than ever.
Taste and trust are key drivers for consumers as they look to mirror the experience they have known from alcohol brands. In 2022 Kopparberg were voted the most loved and best tasting brand for their alcoholic drinks offering (Savanta) as well as the UK’s most loved alcohol-free brand (Savanta). Hosting a range of products in their portfolio, Kopparberg’s evolving alcohol-free range showcases crowd-pleasing cider flavours such as Strawberry and Lime, the bestselling alcohol-free fruit cider (Kantar), as well as Mixed Fruit Tropical which provides a commitment to bringing excitement to the category.
Additionally, pre-mixed Cocktails in the RTD category resonate well with the shopper. Whilst they have been around for a while, COVID and subsequent On Trade closures led to greater need for easy cocktail drinking at home and on the go, and the category exploded. From a pure value point of view, Cocktails are currently worth £78m in the Off Trade, seeing healthy growth at 9.6% YoY (IRI). This growth peaked during summer at 28.3% (IRI), where on-the-go missions, encouraged by warmer weather, drove new consumers into the category.
Over the last two years cocktail cans have added over £27.5million (IRI) to the RTD market. Synonymous with fruity flavours, in 2022 Kopparberg introduced modern twists on classic cocktails to their sparkling RTD range, an ongoing commitment to newness and excitement in the category. Kopparberg’s Strawberry Cosmo and Cherry Storm complement the existing Strawberry & Lime Gin with Lemonade and Rum & Cola slimline cans which have become a staple for on-the-go drinking occasions.
“To capitalise on the importance of at-home occasions this year, a solid stock holding of 500ml bottles, 4packs and multipacks are key,” adds Hockridge. “A 500ml bottle offers the perfect entry price point for trial and impulsive purchases, encouraging consumers to test out new flavours. The newness that Kopparberg is bringing to this format this year will be key to driving excitement and engagement in the range. Similarly, the accessibility of a 4-pack price point provides a great trade up format solution for on-the-go and social gatherings which we expect to see a lot of this year at Easter and the Coronation through to the Summer bank holidays. Larger packs are a staple to the range too, given the rising importance of at-home occasions and the previously mentioned seasonal events.”
Jonathan Nixon, commercial director, Thatchers Cider, comments: “Thatchers Cider continues to outperform the cider market. It has grown more volume than all other top 10 cider makers combined in the last 3 years (IRI).”
Premium ciders retain their popularity with shoppers, with Thatchers, the UK’s #2 cider maker, continuing to outperform the cider market.
“Demonstrating the popularity of Thatchers brands, and consumer love for these premium ciders, 1 in 7 ciders sold in the UK off trade is from Thatchers,” adds Nixon. “As a brand we’re seeing premiumisation above all other trends, driving both value and volume.”
Thatchers Gold has more shoppers than any other apple cider (Kantar) and with the largest value growth of any cider in the last three years, is #1 for growth (IRI).
When it comes to pack-size, Thatchers Gold is the best-selling premium mainstream cider 4-Pack with more shoppers than any other 4-pack branded cider in major mults (IRI).
And in mid pack, Thatchers Gold is the best performing apple cider 10 pack by value across the off trade (IRI).
Alongside Gold as a Top 5 apple cider is Thatchers Haze. It’s the UK’s #1 cloudy apple cider (IRI) and has 60% share of the cloudy apple cider segment (IRI).
“Within fruit, and launched last year, Thatchers Blood Orange, continues to perform fantastically well, and we’re delighted it attracted more shoppers than any other innovation within the BWS category, making it the most successful BWS launch of the year (Kantar),” says Nixon.
Leaping into the top 4 fruit ciders in the UK, Thatchers Blood Orange added more value to the category in 2022 than all other new cider launches combined (IRI).
A new price-marked pack has been launched by Thatchers Cider for its 4x500ml can pack of Thatchers Gold Cider.
Marked at £5.49, the price-marked pack will be available exclusively for the convenience and independent channel on the family cider maker’s best-selling cider, Thatchers Gold.
Price-marked packs are in demand by retailers and shoppers alike, as they help communicate confidence in the pack’s value for money.
Nixon explains, “By stocking the price-marked pack, retailers can communicate value for money to shoppers.
“This new pack for Thatchers Gold – our most popular cider which attracts more shoppers than any other apple cider – means we’re able to further support retailers and help boost sales by adding an extra incentive for shoppers to purchase.
“We’re committed to supporting our customers with this growth opportunity across the convenience channel.”
Thatchers Gold has demonstrated its retail appeal with the largest value growth of any cider in the last three years.
Nixon continues, “The Gold 4x440ml can pack is the top selling branded apple cider 4-pack in the major multiples so this new price-marked pack of 500ml cans provides a strong opportunity for convenience and independent stores to offer a point of difference. It will drive sales and demonstrate to shoppers they are seeing value for money.
“As shoppers continue to feel the pinch this spring and summer, they will be looking to get extra value in their basket. The PMP for Thatchers Gold is therefore this season’s Must Stock.”
Premium ciders retain their popularity with shoppers, with Thatchers, the UK’s #2 cider maker, continuing to outperform the cider market, in fact being almost a third up on pre-Covid levels. Demonstrating the popularity of Thatchers brands, and consumer love for these premium ciders, 1 in 7 ciders sold in the UK off trade is from Thatchers.
Thatchers has grown more volume than all other top 10 cider makers combined in the last 3 years.
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