Marketing

2021 another challenging year for brewers

The continued closure of hospitality venues domestically and in key international markets resulted in another challenging year for Irish brewers in 2021 according to a new report just released by Drinks Ireland|Beer.

 

Brewers are now focused on driving recovery in the sector but face a range of external pressures like inflation which has increased business costs.

Brewers are now focused on driving recovery in the sector but face a range of external pressures like inflation which has increased business costs.

But there were some signs of early recovery in the second half of the year, primarily driven by the easing of restrictions in the hospitality sector in H2.

Its annual Irish Beer Market Report shows that following a 13% fall in production in 2020, the pandemic resulted in a 46% fall in production of Ireland’s most popular alcoholic beverage between 2020 and 2021.

With sales down by 1.2% and per capita consumption down by 2.3%, overall alcohol consumption continues to decline dramatically in Ireland.

Alcohol consumption continues to fall

Data from Revenue shows that alcohol consumption fell by 4.7% between 2020 and 2021. Consumption also fell by 9.6% between 2019 and 2021. However, consumption has continued to decline on a longer-term basis too. It’s now at its lowest level in 20 years, down by about 30% since the peak of 2001.

Non-alcoholic beer is also becoming increasingly popular, with its market share up from 1.1% in 2020 to 1.4% in 2021. Non-alcoholic beer’s market share was 0.4% in 2017.

Exports

The value of beer exports fell by 3% last year too but were still significant at €246 million. Accounting for €91 million Great Britain was the most popular destination for Irish beer, with the US in second place at €49 million and France in third at €26 million.

At €15m and €9m respectively, The Netherlands and Germany took fourth and fifth places.

Beer & market share

According to the report, beer’s share of the Irish alcohol market increased 1.3% from 38.9% in 2020 to 40.2% in 2021.

“Beer’s market share before the pandemic was steady at 45%,” states the report.

Spirits’ market share rose by 2.7% to 24.7%. Cider’s share of the alcohol consumption market declined by 1.1% to 5.8% and wine’s share dropped by 2.9% to 29.3%.

Beer recovered considerable market share in the on-trade in 2021 going from a 29.7% share in 2020 to a 46.4% share last year as the off-trade channel for beer fell to 53.6% from a high of 70.3% in 2020.

Beer types

Stout sales were heavily hit by the pandemic, falling from a 43.3% on-trade share to 38.6%, as stout is mostly consumed in the on-trade. Prior to Covid, around 30% of beer consumed in Ireland was stout. This fell to 25.3% in 2020, but rose by 6.9% to 32.2% last year.

Lager, which was more popular during Covid as it was consumed at home, saw its market share fall last year by just over 8.3% to 61.2%, with ale’s market share up by 1% to 5%.

“Lager’s market share fell from 69.5% in 2020 to 61.2% in 2021,” according to the report.

Focus on driving recovery

Producers are now focused on driving recovery in the sector but face a range of external pressures like inflation which has increased business costs.

To support recovery and manage these significant pressures Drinks Ireland|Beer has called on the government to reduce alcohol excise in this year’s budget as Irish beer drinkers continue to pay the second-highest rate of excise on beer in the EU with 55 cents-worth going to the Exchequer from each pint of Lager.

“Prior to Covid just over 60% of beer sales were in Ireland’s pubs, restaurants and hotels,” said Peter Mosley, Managing Director of the Porterhouse Brewing Company and Chair of Drinks Ireland|Beer, “In 2020 an estimated 29% of beer sales were from the hospitality sector, but this rose to 46% in 2021.

“Irish brewers are now working to return to growth, driven by strong innovation in the sector from established and emerging players. We’ve seen some interesting trends in recent years like the growth of non-alcoholic beer, which we expect to continue.”

Jonathan McDade, Director of Drinks Ireland|Beer added, “Following two of the most challenging years for the brewing sector and the ongoing issue of spiralling business costs, we’re calling for an excise reduction in this year’s Budget. This would enable more investment and innovation within the sector. It would also benefit hard-pressed consumers, facing rising cost-of-living pressures.”

 

 

Sign up for Drinks Industry Ireland

Get a free weekly update on Drinks Industry trade news, direct to your inbox. Sign up now, it's Free