Sales of flavoured alcoholic beverages (FABs) have halved in value in the past five years as drinkers’ enthusiasm for alcopops has waned, according to Leatherhead Food Research (LFR).
The FAB market, which peaked in the mid to late 1990s, was the worst performing sector of the entire UK food and drink market over the 2004-2008 period, said LFR. The category is dominated by brands such as WKD, Smirnoff ice, Bacardi Breezer, Red Square and VK. It had suffered through its overexposure to the on trade, which accounted for the bulk of sales, said LFR.
“In 2008, the UK FAB market was valued at an estimated £650M, having suffered a decline of more than 9% from the previous year. Since 2004, market value has decreased by almost 46%, although the rate of decline has slowed within the last couple of years. By volume, sales were worth an estimated 120M litres, compared to 250M litres in 2004 - a drop of almost 53%.”
Wine - which until relatively recently had been one of the sector’s start performers, was also struggling, said Brockman.
According to LFR, UK wine sales grew sharply in 2004-5 but then declined by almost 8% between 2005 and 2008. Volumes dropped by almost 15% to 1.16bn litres during 2005-2008, he said. “Until a few years ago, the wine market was one of the fastest growing sectors of the UK alcoholic beverages category. However, the UK wine market has now started to decline, caused by factors such as the cooler summers as well concerns over binge drinking, rising excise duties and stiffer competition from other sectors of the alcoholic beverages market, such as cider and premixed spirits.”
The picture for beer was mixed, with value sales up 9% by value over the period 2004-2008, but volumes down by 4.8%. But there was better news for spirits, which saw their market value rise by almost 11% between 2004 and 2008, while volumes were up by more than 5% over the same period.
However, the star performer in the UK beverage market was cider, which saw value sales rise by 42% and volume sales up 40% (2004-2008), said LFR. “At almost 12 litres, the UK now has one of Europe’s highest per capita consumption rates for cider.
“Although apple-based varieties continue to dominate the market, accounting for a value share of almost 93%, the major growth area within the last year has been pear cider, sales of which have risen by more than 50% within the last year, aided by the success of brands such as Kopparberg.”
With a value share of around 31%, the alcoholic beverages sector is the UK food and drinks market’s largest sector, ahead of soft drinks at 11%.
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