As shoppers get smart with spending, demonstrating value & quality will be key. ONS market research data reveals that UK households saved an average of £7,000 during the pandemic, saving almost one-quarter of their incomes, up from the usual average of 6%. Whilst it was hoped these cash reserves would be splashed out this year, retail sales data shows that consumers are starting to cut back to offset rising prices and bills. Retail sales fell 1.1% annually in May, with big-ticket items like furniture and electronics taking the biggest hit, as we would expect. With pent up savings and fewer big-ticket purchases, this means some households should have a savings buffer to cope with rising prices and continue treating on their everyday luxuries – which could include the alcohol category. PROOF’s drinks market research shows that the vast majority of alcohol drinkers have not changed their behaviour in the last 3 months and 93% have remained in the alcohol category. Around a third (37%) are purchasing more on promotions, 34% have reduced visits to the on-trade and 32% have been drinking in lower quantities in the home: but generally alcohol spending has the stayed the same. Winning in these moments has never been more important for brands. Source: PROOF Insight POURTRAITS research May 2022, BDO, The Times, KPMG, The British Retail Consortium, Propel |
London ‘Enterprise Zone’ boost for night-time economy. Following a successful pilot which increased post 6pm footfall by 22%, Mayor Sadiq Khan has announced the creation of more ‘Night-Time Enterprise Zones’ across London. The programme will select local authorities to work with night-time businesses and communities to improve and re-purpose their high streets; making them more attractive, inclusive and accessible at night by introducing measures such as extended opening hours, special events & focusing on women’s safety. The ‘night-time economy’ covers a wide range of activity and businesses from hospitality & events to retail, operating in town and city centres from 6pm-6am, combining to create an economy distinct from that of the daytime. In 2019, the UK’s night-time economy was estimated as its fifth-biggest industry, accounting for at least 8% of employment and annual revenues of £66bn. The drive to return to pre-pandemic levels has focused on increasing the profile of the Night Time Industries Association (NTIA) and the creation of ‘Night Czars’ in Manchester, Bristol & Aberdeen and planned appointments for Glasgow & Edinburgh. Amy Lamé, London’s Night Czar from 2016 said of the zones: “We want to help reimagine our high streets with innovative ideas and help councils, communities and businesses to pioneer better ways of living, working and doing business.”
PROOF’s recent drinks industry survey into nightclubs, a night-time sector hit hardest by the pandemic, shows some positive signs of recovery; 45% of 18-34s state they have been to a nightclub in the last 3 months, as well as 22% of 35-44s. Almost 1 in 3 18-24s are visiting a nightclub at least once a fortnight, demonstrating the potential of the night-time sector to reach pre-pandemic levels with the support of enterprise zones. Source: PROOF Insight POURTRAITS research May 2022, Propel, NTIA, Local.Gov.UK, BBC |
UK sales of No/Lo beers almost double in five years. Research group IWSR have cited reduced alcohol consumption rates by younger drinkers and market proliferation of No/Lo versions of existing lines by brewers, as contributing to the rise in sales of low and no alcohol beers in the UK. From £191m in 2016 to £361m in 2021, the category now accounts for 3.1 per cent of the UK’s beer market, compared with 2.7 per cent globally. IWSR project No/Lo lines to continue to grow, but with overall sales to plateau at around 6% of the total beer market. Emily Neill, head of research, has said “What you’ve seen in markets such as the UK and US is consumers becoming much more conscious of their health” coupled with “a push from the companies to meet their ESG targets, to actually do something about the issues around responsible drinking.” The combination of consumer drinks trends and corporate objectives have resulted in the commercial decisions of small to large global brewers to develop and promote No/Lo lines. AB InBev stated in 2015 that No/Lo would make up to a fifth of sales by 2025, the group’s Chief Financial Officer, Fernando Tennenbaum, said “Until five years ago no one was investing seriously in low and no alcohol, we learned that it is better to have extensions of mainstream brands as opposed to developing new brands.” The company have recorded double-digit annual growth of their no/lo brand range including Budweiser, Corona, Becks and Leffe in the UK. Source: Financial Times, Propel, IWSR |
Investments, Mergers & Acquisitions:
Sources: Big Hospitality, Propel, The Times, Langton Capital, BBC |
Product Launches & Campaigns:
Sources: The Morning Advertiser, The Drinks Business, The Spirits Business, Beverage Daily |