UK spirits volumes fall 5% in 2023

Spirits volumes declined by 5% in the UK last year, with gin falling by double digits, data from IWSR Drinks Market Analysis revealed.

Data from IWSR revealed that total beverage alcohol (TBA) volumes in the UK dipped by 2% in 2023.

Between 2018 and 2023, volumes fell by a compound annual growth rate (CAGR) of 1%.

The TBA market in the UK is expected to see volume and value declines of 1% CAGR over the next five years (2023-2028).

Looking at 2023, spirits were hit the hardest with a 5% decline, while beer saw a 2% drop and wine fell by 4%.

Within spirits, gin experienced the biggest drop, down by 14% in 2023. The category has lost shelf space to segments such as Tequila in the past year, IWSR said.

Agave spirits had a more positive performance, rising by 4% in volume last year, however the IWSR has noticed that growth is slowing for the category. Volumes increased at a CAGR of 13% in the five years to 2023, but are forecast to grow by a CAGR of only 2% between 2023 and 2028.

Outside of agave spirits, a few other categories also registered growth, such as Bourbon, cream liqueurs, coffee liqueurs and spirit-based apéritifs, boosted by cocktails.

Most other spirits categories saw their volumes tumble as consumers converted to ‘better-value long drinks’, such as beer and wine.

Spirits are expected to register single-digit declines between 2023 and 2028, but gin will suffer heavier losses.

Rum is predicted to witness long-term growth, although modest and focused in spiced and flavoured variants, the IWSR noted.

Meanwhile, the ready-to-drink segment reported a 2% increase last year, driven by premium cocktails and a wider range of bottled ready-to-serve options.

No-and-low booms

The IWSR found that the no-and-low segment outperformed the alcohol market in the UK, due to the moderation trend and excise duty changes (drinks below 3.5% ABV are taxed at a lower rate).

The no- and low-alcohol segment soared by 47% last year, with forecast volume CAGR of 19% (2023-2028).

The low-and-no subcategory is expected to add value of £800 million (US$1 billion) gradually by 2028.

The latest Bevtrac consumer data from IWSR found that the no-alcohol market grew by 17% in 2023 and is estimated to grow at a 4% volume CAGR (2023-2028).

Volumes of non-alcoholic ‘spirits’ have now comfortably surpassed Tequila in the UK, the IWSR claimed.

“Whether reflected by reining in grocery spend, reducing the frequency of on-trade visits or switching to longer drinks, seeking out better value was the overwhelming priority for increasingly cash-strapped UK drinkers in 2023,” said Patrick Fisher, IWSR senior market analyst.

“Rising prices and the cost-of-living crisis have reduced disposable incomes for discretionary spending and, coupled with the enduring trend of moderation, as well as closures and reduced opening hours in the on-trade, this is having lasting effects on consumer behaviour.

“The upper end of the market remains more insulated, while mainstream-and-below retail sales became more dependent on promotions.”

The IWSR said there are now more alcohol-free dark spirit alternatives, and some Tequila substitutes, entering the market. It was previously dominated by ‘gin-style’ products.

Global alcohol sales declined by 1% in volume last year with spirits reporting its first drop in the US in nearly 30 years, the IWSR revealed earlier this month.

Total spirits sales also declined in Great Britain’s on-trade last year, falling by 4.6%, CGA data showed. Cream liqueurs were the only subcategory to grow in 2023, soaring by nearly a third.