On-trade up again in 2017
Sales of food, soft drinks, alcohol and other items in the on-trade rose 3.6% in volume in 2017 while off-trade volumes fell by 2.0%, but despite there being an on-trade volume increase over the past three years, on-trade volumes are running at just three-quarters of the pre-crash 2007 volumes while the off-licence’s volume share of the overall alcohol consumption market now stands at around 59%.
The figures are contained in a new report, The Drinks Market Performance 2017, authored by Dublin City University economist Anthony Foley and commissioned by the Drinks Industry Group of Ireland. It has been published ahead of the launch of DIGI’s 2018 ‘Support Your Local’ campaign.
The report found that alcohol consumption decreased slightly (by 0.1%) last year and now stands at 41.95 million litres of pure alcohol. This is down 10% from the figure 10 years previously when total alcohol consumption volumes stood at 46.61 million lpa.
The average per adult alcohol consumption figure in 2017 was 11.08 lpa, down 1.4% on the 2016 figure of 11.24 lpa. This is a 23% decrease on the 14.44 lpa figure in 2001 and a 17.9% decrease on the 13.488 lpa figure in the 10 years since 2007.
Beer remains the nation’s most popular drink, making up 44.8% of the alcohol market last year. However, the volume consumed was down 2.1% on 2016 – the only alcohol category witnessing a decline in consumption volume.
Wine made up 27.7% of the market, the second most popular drinks category, with volume up 0.4% on the previous year. Back in 2001, wine held only 14.3% of the market so it has almost doubled in 16 years.
Spirits made up 19.8% of the alcohol market in 2017, a 3.6% increase compared to the previous year.
Cider volumes were up 1.5% to give cider a 7.6% share of the overall alcohol market.
The value of the alcohol market overall rose by 0.3% to €6.84 billion in 2017 but when excise and VAT of €2.45 billion are subtracted from this total the resultant net market value stands at €4.39 billion.
The report demonstrates the “diversity of the Irish drinks market” stated Donal O’Keeffe, DIGI Secretary and Chief Executive of the Licensed Vintners Association.
“The Irish drinks market is highly competitive and constantly evolving in line with consumer preferences and tastes. What we’ve witnessed over the last decade – but particularly over the last five years – is the growth of a nationwide network of businesses flexible and eager to serve shifts in consumer taste and develop new, innovative products and services.”
However he warned that while the Irish drinks industry is robust, it faces a number of challenges that could plateau or even reverse its upwards growth.
“The drinks industry is integral to Ireland’s economic health,” he pointed out, “92,000 people work in the drinks industry alone and the combined hospitality sector (which includes pubs, hotels, restaurants, breweries, distilleries, retailers, manufacturers and distributors), employs almost 210,000 people across the country. That’s 10% of all jobs or €1.25 billion-worth of exports a year.
“‘Uncertainty’ is the word of the day,” he continued, “Brexit makes it harder for exporters to plan for the future. If it’s harder to trade with Great Britain or Northern Ireland and Sterling remains weak, revenues will decline due to trade barriers and a decrease in overseas visitors.
“Considering its contribution to the economy, we hope that the Government continues to work with the Irish drinks industry and wider hospitality sector to help deliver the best possible Brexit and to allow for the conditions necessary to make the domestic drinks market as productive and profitable as possible.”