Europeans are priced off booze | WARC | The Feed
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Europeans are priced off booze
Sales of beer, wine and spirits through European retailers fell 4% last year and are now lower than before the pandemic as consumers cut discretionary purchases in the face of rising inflation.
That’s according to new figures from data and analytics firm IRI, which charts a decline in off-trade alcohol sales following a surge in 2020 during the first year of the pandemic. Then, value sales increased 12.6% because people were confined to their homes; but as lockdown restrictions eased during 2021, sales were flat, with only a 0.7% value increase. A €2.7bn slump in 2022 took total category sales for the year down to €66bn.
Why it matters
“Alcohol brands are caught in a perfect storm with no end in sight,” says IRI’s Ananda Roy.
Normally one would expect off-trade alcohol sales to rise during recession as people eat and drink at home rather than going out. But a combination of high food and energy prices, record interest rate rises and low-wage growth means households are having to prioritise spending and make tradeoffs – and alcohol brands are feeling the pinch. For the category to return to growth may require investment in new products tailored to changing consumer needs and consumption moments.
It’s not all gloomy
- In the UK, Zero/Low Alcohol sales are growing (+3.7% volume in 2022, +5.3% value) and now account for 1% of the beer, wine, spirits category total.
- IRI predicts consumption of Zero and Low Alcohol beverages to accelerate in 2023 as the price of alcoholic beverages continue to rise.
- Champagne, prosecco and ready-to-drink spirits appear resilient to recessionary decline as people remain willing to spend on celebrations after two years of lockdown restrictions.
“When it comes to alcohol, strong brand equity usually keeps shoppers buying their favourite beer, wine and spirit brands. However, as prices rise we could also expect to see more people switching to private-label brands as they do in other categories where they are perceived as good as national brands” – Ananda Roy, Global SVP, Strategic Growth Insights, IRI.
Sourced from IRI
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