Beer sector loses tenth of its value - Mintel

Beer sector loses tenth of its value - Mintel

The UK beer sector has lost around one tenth of its value in the last five years, hit by duty tax rises and a consumer shift to cider, wine and spirits.

Beer sales are set to hit GBP15.5bn (US$24.3bn) in calendar 2011, down by 12.4% on 2006, market research group Mintel said today (21 December). Volume sales have fallen almost twice as fast over the same period and are expected to total 3.2m litres this year.

Mintel's figures add to the bleak picture of the UK beer market, and particularly the on-trade, that has been espoused quarterly by the British Beer & Pub Association (BBPA) over the past few years. BBPA figures show total beer sales actually rose by 4% in the third quarter of 2011, but this is only the second quarterly increase in five years.        

Brewers' collective failure to innovate has pushed more consumers into other drinks categories, such as cider and vodka. Duty tax rises have also hit sales, while a shift from on- to off-trade has damaged the sector's value.

Mintel's senior drinks analyst, Jonny Forsyth, said that the shift to home drinking has damaged beer disproportionately. "Beer has been particularly badly hit - it suffers from being perceived as less suited than its competitors for in home drinking," he said. 

"This is because its male user bias makes it less of a compromise choice for couples than wine or spirits, and it is less associated with food matching or relaxing occasions." He added: "Lager sales are down from GBP12.7bn in 2006 to GBP11.4bn in 2011 – a 10% decrease which looks a lot better than it is, due to above-inflation price increases."

On a more positive note, Mintel believes that younger drinkers in the UK do have a thirst for innovation in beer. It highlighted market opportunities for sweeter beers and low-calorie beers.