A decline in alcohol consumption goes beyond Dry January amid the cost of living crisis, new research has suggested.
Alcohol value sales in grocery across Europe fell 4% in 2022, a loss of €2.7bn (£2.4bn) to €66bn (£58bn), according to the latest IRI ‘FMCG Demand Signals’ report.
The decline across all European retailers made it “increasingly evident that underlying demand has changed in response to post-pandemic trends, with new consumption patterns and choices impacting how the category grows over the next few years”, said Ananda Roy, IRI global senior vice president of strategic growth insights.
Makers of beer, wine and spirits brands were now “caught in a perfect storm with no end in sight”, he added. “Alcohol sales tend to peak during a recession as consumers eat in instead of out. However, this recession is fuelled by a perfect storm of exceptionally high food and energy prices, record interest rate rises and anaemic wage growth.
“Households are having to make trade-offs to moderate its impact on their available income, prioritising food staples and small indulgent treats over discretionary items like alcohol.”
As a result, alcohol sales were “now lower than pre-pandemic levels”, said Roy.
At the same time, low & no value sales have grown 3.7% year on year across Europe, IRI’s findings show.
In the UK, the category currently accounts for 1% of total beer, wine and spirit sales. Five million litres went through tills in 2022, as value grew 5.3% to £16m, according to IRI.
In response, the booze behemoths are busily innovating in low & no. Asahi, for instance, last month debuted an alcohol-free version of its Super Dry beer in the UK, as part of the global business’s wider ambition to make 20% of its portfolio alcohol-free by 2030.
“The low & no category is still quite small, but it is growing fast,” said Asahi UK marketing director Sam Rhodes.
“We have adopted a strategy where we effectively twin our alcohol products alongside our 0% variants in retailers. This is because it’s a complementary purchase; consumers may want alcohol on Friday and Saturday but a non-alcoholic variant during the week – and we are catering for that.”
Elliot Horner, founder & director of CBD beer brand Cannabrew, which offers a 0.5% abv Hops & Sunshine, said low & no was growing “at an astonishing rate”.
“We are seeing a rise in the conscious consumer, who is interested in positive social, environmental and health benefits. People are more conscious about what they are putting in their bodies and alcohol-free drinks are a great example of that.”
Indeed, a number of low & no players have reported surging sales in recent weeks. Alcohol-free beer brand Freestar has reported a 427% uplift in website sales during the first week of 2023, and Kylie Minogue’s 0% abv Sparkling Rosé sold more than 147,000 bottles in its first 12 weeks, according to Benchmark Drinks.
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