Volume sales have declined by nearly one-quarter or 23 per cent over this six-year period, states Mintel.
As might be expected, off-trade alcohol sales have shown growth during this time in tandem with the increase in at-home drinking.
But despite beer’s increased share of the off-trade market, unlike volumes in wine and spirits sales, off-trade beer volumes declined 5.4 per cent in 2010.
“The economic downturn and rising differential between on- and off-trade beer and alcohol prices has hit the pub trade heavily and led to more UK consumers migrating to in-home drinking,” commented Jonny Forsyth, Senior Drinks Analyst with Mintel, “Beer has been particularly badly hit – it suffers from being perceived as less suited than its competitors for in-home drinking. This is because its male user bias makes it less of a compromise choice for couples than wine or spirits and it is less associated with food matching or relaxing occasions than either of those drinks categories. The reason why beer is reliant on pubs is that it remains a core drink for young men – almost a rite of passage – and many choose it because in pubs, the size and price of a pint seem so much better value than most other drink options.”
Lager dominates the overall beer category and has therefore seen a greater loss of actual revenue over the past six years than ale and stout. Lager sales are down 10 per cent from £12.7 billion in 2006 to £11.4 million in 2011 – which looks a lot better than it is, due to above-inflation price increases. In 2011, the value of the ale sector had declined to £3.3 billion and stout to £855 million. However, within the market, all beer types are struggling, reports Mintel.
The UK population has been drinking proportionately less alcohol since 2004 (89 per cent of Brits claimed to consume beer in 2004 – dropping to 82 per cent in 2011). Indeed the price gap between on- and off-trade is so huge that for many, drinking out is now a luxury rather than a standard night out. Today more than two in five (44 per cent) on-trade drinkers see drinking out of home as too expensive which has meant that a once regular night out occasion has become more of an occasional luxury.
Punitive duty increases have made alcohol increasingly expensive. However, this does not explain why beer has seen a 13 per cent value decline while wine has seen a value sales increase over the past five years (+15 per cent to 2011).
“The beer sector has not helped itself by being slow to respond to the decline of the market – and for too long thinking (or hoping) that falling numbers were just a blip,” added Jonny Forsyth.
He continued, “Lager can undoubtedly innovate its way out of its current slump. If ever there was doubt about the importance of innovation in driving sales this can be dispelled by the value which flavoured vodkas plus pear and other fruit-flavoured ciders have added to their respective youth-orientated categories.”
Mintel’s research finds plenty of appetite among younger consumers for innovation in lager. Some 28 per cent of UK lager drinkers are interested in sweet-tasting lagers – this rises to 57 per cent of those aged 18 to 24. Indeed, while older consumers view lager in quite a traditional way, younger drinkers see it as more of a ‘blank canvas’ with a further opportunity for low calorie versions as 54 per cent of 18 to 24 year-olds feel beer is too calorific, compared to 35 per cent overall. The major area for NPD is flavour, but also low calorie beers.
“The beer market has been trying to appeal to a broader audience, more recently to females with products such as lite beers. Beer is also belatedly catching on to the importance of flavour innovation – particularly sweeter variants which are proving hugely popular among younger consumers in the cider and vodka categories and the increasing importance of drinks categories positioning themselves as relevant to in-home drinking occasions such as mealtimes, plus relaxing, social and sharing occasions,” he concluded.