Alcohol sales in Europe lower than pre-pandemic

Data analyst IRI has reported a €2.4 billion (US$2.6bn) decline in off-trade alcohol sales throughout Europe during 2022, meaning sales are now lower than before the pandemic.

The drop in sales represents a 4% decline in sales of beer, wine and spirits across all European retailers: supermarkets, discounters, convenience stores and off-licences. Total sales for the year ended at €66bn (US$71.9bn).

IRI analysed the impact of the pandemic, inflation and the cost-of-living crisis on more than 230 FMCG (fast-moving consumer goods) categories, 2,000-plus product segments, and more than one-million SKUs sold to consumers in the biggest European markets (France, Italy, Germany, Spain, the Netherlands and the UK).

Ananda Roy, global senior vice-president, strategic growth insights, IRI, said: “It is increasingly evident that underlying demand has changed in response to post-pandemic trends with new consumption patterns and choices impacting how the category grows over the next few years.”

In 2020, alcohol sales increased by 12.6% in value terms, driven by consumer demand during the first year of the pandemic. This added €7.5bn (US$8.2bn) to the off-trade alcohol sector, totalling €67.3bn.

In 2021, as lockdown restrictions eased, value sales rose by 0.7%, adding €500 million (US$544.8m) to the category in Europe.

Low-and-no on the rise

Prices for beers, wines and spirits are expected to rise in 2023, bolstering consumption of low- and no-alcohol products.

In the UK, low- and no-alcohol sales are growing and now account for 1% of beer, wine and spirits sales.

Retailers have also upped their promotions on alcohol, IRI said, particularly in the UK. This has been attributed to a change in advertising rules, meaning alcohol promotions have replaced sweets and sugary snacks on end-of-aisle offers.

UK retailers’ own-label alcohol brands now account for 16.4%, or €11bn (US$12bn) of value sales for the category.

“Alcohol brands are caught in a perfect storm with no end in sight,” Roy added. “Alcohol sales tend to peak during a recession as consumers eat in instead of out.

“However, this recession is fuelled by a perfect storm of exceptionally high food and energy prices, record interest-rate rises and anaemic wage growth.

“Households are having to make trade-offs to moderate its impact on their available income, prioritising food staples and small indulgent treats over discretionary items like alcohol.

“Alcohol sales are now lower than pre-pandemic levels.”

Earlier this month, new data from the Irish Whiskey Association showed Irish whiskey exports exceeded €1bn (US$1.07bn) for the first time in 2022.