The UK beverage alcohol market is undergoing significant changes, with recent data from IWSR highlighting a shift in consumer preferences and market dynamics. Total beverage alcohol volumes in the UK witnessed a 2% decline between 2022 and 2023, continuing a downward trend seen from 2018 to 2023 with a compound annual growth rate (CAGR) of -1%. Despite these challenges, the UK remains the world’s third most valuable market for premium alcohol.

In contrast, the no- and low-alcohol segment is experiencing a remarkable surge. This segment saw a striking 47% growth in volume from 2022 to 2023, and it is forecasted to continue growing at a 19% CAGR from 2023 to 2028. This expansion is partly propelled by a consumer shift towards moderation and changes in excise duty regulations. Low-alcohol beer, in particular, is leading this trend, with sales nearly doubling in 2023.

Patrick Fisher, Senior Market Analyst at IWSR, noted that rising prices and the cost-of-living crisis have tightened disposable incomes, influencing consumer spending habits. The trend of moderation, coupled with reduced on-trade operations, is shaping a new landscape for the alcohol market. The upper market remains resilient, while the mainstream sector increasingly relies on promotions to drive sales.

Long-term forecasts indicate a gradual decline in beer and wine volumes, with premium lagers and non-alcoholic beers being the key growth areas in beer. Meanwhile, sparkling wines like English sparkling wine and Crémant are gaining traction, despite overall declines in traditional favourites like champagne and prosecco.

Spirits are expected to experience modest declines, with gin facing more pronounced losses. However, rum and agave-based spirits are set for modest growth, focusing on spiced, flavoured, and niche variants.

On a positive note, ready-to-drink (RTD) beverages are bucking the trend, with consumption expected to rise between 2023 and 2028. The popularity of premium cocktails and a growing variety of bottled RTD options are fuelling this growth.

Innovation in no-alcohol products is also expanding beyond gin alternatives, with a wider array of zero-proof options now available. This proliferation reflects a growing consumer base for no-alcohol beverages, which saw a 17% increase in 2023, projected to continue at a 4% CAGR.

As the UK beverage alcohol market navigates these evolving trends, it is clear that consumer preferences are shifting towards moderation and innovation, promising a dynamic future for the industry.

Source: Food Processing