Drinking Habits - UK - February 2008

Table of Contents

• Issues in the Market
• Definition
• Beer
• Cider
• Wine
• Spirits & liqueurs
• Consumer research
• Abbreviations
• Market in Brief
• Adrift on a sea of booze?
• Wine is more popular than beer
• Binge drinking hits the headlines
• Goodbye to the traditional pub
• Booze while you shop
• Living at a premium
• Back to the future
• Internal Market Environment
• Key points
• Less can be more
  • Figure 1: Per capita volume consumption of alcoholic drinks among the UK adult population (15+), by type, 2002-07
• UK not Europe' s booziest...but we try harder
  • Figure 2: Long-term trends in per capita alcohol consumption in Europe, 1970-2005
• Drinking is really a middle-aged habit
  • Figure 3: Alcohol consumption in last 12 months, by age, 2002-07
• A nation of softies
  • Figure 4: UK consumption and expenditure on soft drinks, 2002-06
• Alcohol, health and a changing climate
• The ' new war against alcohol'
• Binge drinking and social responsibility -- Government action
• Advertising restrictions?
• The price is right
• A licence to drink?
• No booze without smoke?
• Broader Market Environment
• Key points
• The Peter Pan effect
  • Figure 5: Structure of the UK population, by age and gender, 2002-12
• Favourable employment situation benefits sales
  • Figure 6: UK workforce and employment, by gender, 2002-12
• Binge-drinking is highest in less affluent regions...
  • Figure 7: Adult population trends, by socio-economic group, 2002-12
• ...but well-off areas have little to crow about
• Buoyant economy since 2002, but outlook is less rosy
• Who' s Innovating?
• Key points
• The UK tops new launches chart
  • Figure 8: New product launches in alcoholic drinks, by sector, by country, 2007
• Wine launches dip notably in 2006
  • Figure 9: Trends in new product launches in alcoholic drinks in the UK, by sector, 2002-07
• Increasing premiumisation
  • Figure 10: Trends in new premium product launches in alcoholic drinks, by country, 2002-07
• New product development -- lager
• Ales & stouts
• Cider
• Wine
• Spirits & liqueurs
• Market Size and Forecast
• Key points
• Market in volume and value decline
  • Figure 11: UK volume sales of alcoholic drinks, 2002-12
  • Figure 12: UK value sales of alcoholic drinks, at current and constant prices, 2002-12
• Beer still outselling all other drinks in volume terms
  • Figure 13: UK volume sales of alcoholic drinks, by type, 2002-12
• Premiumisation helps values
  • Figure 14: UK value sales of alcoholic drinks, by type, in sterling terms, 2002-12
• What the future holds
• Can ale reinvent itself as cider has?
• Cider -- a remarkable transformation
• Wine packaging is changing -- screw tops and boxes are more acceptable
• Infrequent spirits buying for in-home drinking concentrated at Christmas
• Forecast
  • Figure 15: UK volume sales of alcoholic drinks and per capita consumption (adults aged 15+), 2002-12
• Alcohol market has peaked
• Beer market continuing slow decline
• Wine demand set to peak in 2010
• Cider phenomenon to peak in 2008
• Spirits & liqueurs remains stagnant
• Factors used in the forecast
• Segment Performance
• Key points
• Beer
• The great depression
  • Figure 16: UK volume sales of beer, 2002-12
• Beer accounts for 44% of all alcohol expenditure, but sales are declining
  • Figure 17: UK value sales of beer, at current and constant prices, 2002-12
• Lower-alcohol variants ready for success
• Specialities benefit from brand awareness amongst the young
• Cider
• Sweet taste of success
  • Figure 18: UK volume sales of cider, 2002-12
• Magners revitalises the category
  • Figure 19: UK value sales of cider, at current and constant prices, 2002-12
• Cider sees a resurgence of product development
• Successfully attracting younger drinkers, and women
• Wine
• More accessible and greater choice
  • Figure 20: UK volume sales of wine, 2002-12
• Deep discounting affects value performance
  • Figure 21: UK value sales of wine, at current and constant prices, 2002-12
• Benefiting from the health aware? -- red wine takes over half the market
• Grocery multiples help shoppers to choose wines more easily
• Supermarkets bring champagne to the masses, but sales still peak at Christmas and New Year
• Fortified wine also in need of reinvention
• Spirits & liqueurs
• Changing drinking habits have an adverse effect on demand
  • Figure 22: UK volume sales of spirits and liqueurs, 2002-12
  • Figure 23: UK value sales of spirits and liqueurs, at current and constant prices, 2002-12
• White spirits form the largest sector -- due to popularity with younger drinkers
• Again, under-35s hold the key to success
• Cocktails also bringing younger consumers to spirits
• Market Share
• Key points
• Continued consolidation
• But local brands remain important
• Concentrated beer supply, but room for regionals
• Cider led by S&N with Magners in second place
• Wine is largely unbranded, but brands are making headway
• Spirits & liqueurs controlled by three multinationals
• Companies and Products
• Bacardi-Martini
• Constellation Brands
• Coors Brewers UK (CBL)
• Diageo
• InBev UK
• Pernod Ricard
• Scottish & Newcastle
• Brand Communication and Promotion
• Key points
• Italy and Germany see more drinks advertising than the UK
  • Figure 24: Main monitored media advertising expenditure on alcoholic drinks, by country, 2005-07
• Key multinationals invest the most in their brands
• Magners and Bulmer' s brands received most support in 2007
  • Figure 25: Main monitored media advertising expenditure on alcoholic drinks in the UK, Jan-Sept 2007
• Channels to Market
• Key points
• From pub to home
  • Figure 26: UK volume sales of alcoholic drinks, by sector, by distribution channel, 2002-07
• Food grows in importance to the on-trade
  • Figure 27: UK volume sales of alcoholic drinks, % share by distribution channel, by sector, 2007
• On-trade takes its largest share of volumes (and value) in beer
• Low prices attract consumers to the off-trade...
  • Figure 28: UK value sales of alcoholic drinks, by sector, by distribution channel, 2002-07
• ...but attract criticism
  • Figure 29: UK value sales of alcoholic drinks, % share by distribution channel, by sector, 2007
• The Consumer -- Pan-European Overview
• Key points
• 87% and steady
  • Figure 30: Alcohol consumption, by country, 2005-07
• Brits prefer to drink at home, perhaps with a takeaway
  • Figure 31: Indexed attitudes towards eating and drinking, by all adults, by country, 2007
• Special offers have led to expectations of low prices
  • Figure 32: Indexed attitudes towards shopping, brands and pricing, by all adults, by country, 2007
• The Consumer -- Alcohol Consumption in the UK
• Key points
• The young are not the biggest drinkers, the 35-54s are
• Affluence is linked to increased drinking -- due to lifestyles rather than prices
  • Figure 33: Alcohol consumption in last 12 months, by demographic sub-group, 2007
• Men prefer beer, women wine
• Wine needs to woo the young
• Most spirits weighted towards men, except liqueurs and mixables
• White spirits have youth appeal, dark spirits less so
  • Figure 34: Consumption of beer and wine, by type, by demographic sub-group, 2007
  • Figure 35: Consumption of spirits & liqueurs, by type, by demographic sub-group, 2007
• Increased frequency of drinking
  • Figure 36: Trends in frequency of drinking, 2002-07
  • Figure 37: Frequency of drinking alcohol, by choice of drink, 2007
• Beer gives way to wine and champagne becomes more popular than whisky
  • Figure 38: Trends in alcohol consumption, by type of drink, 2002-07
• Consumer Attitudes
• Key points
• Home sweet home
• Drinkers are open to new products, but wine drinkers are relatively conservative
  • Figure 39: Attitudes towards eating and drinking, by choice of alcoholic drink, 2007
• Room for alcohol within a healthy diet?
  • Figure 40: Attitudes towards alcohol and health, by choice of alcoholic drink, 2007
• Positive environment for premiumisation
• Aspirational sparkling wine, champagne and gin drinkers
  • Figure 41: Attitudes towards shopping, brands and pricing, by choice of alcoholic drink, 2007