This week we delved into the top-ten craft beer markets as beer consumption in continues to decline in major countries, looked at vodka’s potential in India as Ukrainian vodka distiller Nemiroff signed a distribution deal and eyed cider makers’ spend on advertising amid a copycat spat between Thatchers and Aldi.
Two out of top-four craft beer markets in decline
Craft beer* consumption is declining in two out of the top-four markets, including the US, its largest market.
Of the top-ten craft beer markets, consumption is in decline in the UK, US and Poland, analysis from GlobalData, Just Drinks’ parent company, shows.
This week, UK non-alcoholic beer maker Mash Gang told Just Drinks declining sales of alcoholic beer provided an opportunity for the low-and-no category.
“We’re at a time in the market where there is underused capacity in brewing; a lot of very well-established breweries are not necessarily seeing the demand they were once upon a time,” co-founder and CEO James Loveday said.
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He added: “I think contracting and particularly introducing things like low alcohol out to the mainstream brewing industry could be seen as taking away market share. But it’s one of those great challenges in brewing that a lot of brewers are interested in working on because it’s something they haven’t necessarily done before.
“It means that they also get a bit of market share from customers that maybe would look elsewhere to one of the macros (the Heinekens, the Budweisers), for a non-alc beer.”
*GlobalData defines craft beer makers as those with a perception of being small scale and independent (even if not), a portfolio of beers that encompasses different styles and a relatively short history. “Craft is largely about perception and there will therefore always be a degree of subjectivity in defining beers as craft. However, [these] are [the] attributes that we believe mark beers out as craft,” GlobalData said.
China leads charge in falling global wine consumption
Wine consumption in China dropped by 103.3m nine-litre cases between 2015 and 2023, the largest decline of the world’s top-ten largest consuming countries, data suggests.
France, Germany and Argentina also saw declines over the five-year period, with seven out of the top ten falling between 2020 and 2022, according to research by Silicon Valley Bank.
Rob McMillan, executive vice president and founder of SVB’s wine division, said: “Total world consumption hinted at a downward slope in 2014 before becoming obvious in 2017. Except for a slight reprieve in 2020 during COVID, that downtrend has continued, and vine acres are being pulled in many countries.
“The world’s wine-producing countries had high hopes that the growth of Chinese consumption might help business, but a crack-down on displays of wealth in the early 2010s began a decade-long decline that continues today. Maybe India will become the next hope?”
This week SVB released its annual US wine-industry report, which predicted sales of wine in the US were set to decline again in 2024 in volume terms amid “bulging” inventories.
The bank’s estimates show total US wine sales decreased by between 2% and 4% in 2023 and will “remain negative” in 2024.
SVB put decreasing demand down to consumers drinking less, swapping for alternatives like RTDs and cannabis products, and increased numbers of “abstainers”.
It added: “The anti-alcohol lobby led by the World Health Organization is having success with its message – truthful or not – that ‘there is no safe amount of alcohol to drink’.”
Traditional-method sparkling-wine gives fizz to Chapel Down
UK winery Chapel Down’s traditional-method sparkling wine led the company’s sales growth in 2023 while sales of still wine and spirits fell.
While the company saw total net-sales growth of 14%, its core range grew 25% - followed by its “gently carbonated” range, A Touch Of Sparkle. Its flagship traditional-method sparkling wines (brut and rosé) also increased volume sales 12% to 887,000 bottles.
“It's been a brilliant year,” CEO Andrew Carter told Just Drinks this week. “We've delivered against the expectations and our plans.”
Declining spirits sales at the Kent-based company were unsurprising as it is exiting the category.
For still wine, however, Carter put declines down to a “competitive market for still wines” combined with the UK’s alcohol-duty reforms and some distribution changes. Net sales revenue for still wines reduced by 7% to £2.6m compared to 2022.
Carter is looking to cap the recommended retail price for Chapel Down’s namesake still-wine range at £15 ($19.06) this year following falling sales in 2023. He said £15 was a “very important threshold” to help English wine stay competitive.
India’s vodka market to hit $2bn next year
India’s booming vodka market could be worth $2bn by 2025, data suggests.
Worth an estimated $1.7bn in 2023, sales could continue climbing to $2.3bn by 2027, according to analysis by GlobalData.
It comes as this week Ukrainian vodka distiller Nemiroff announced it had signed a distribution deal in India with Amistad Spirits.
A spokesperson for Nemiroff told Just Drinks: “The increase in consumption and changing lifestyle patterns across will represent the key drivers as the vodka category is expected to continue on a growth momentum in the coming years driven by the premium category.”
The company said it opted to partner with Delhi-based Amistad Spirits to help navigate India’s “high tariffs, protectionist policies, price sensitivity and route-to-market challenge”.
UK cider makers cut advertising spend
UK cider manufacturers are spending less on marketing and advertising than ten years ago, data suggests.
In its annual cider report, Westons Cider said the category’s advertising declined from £19.8m in 2013 to £15.9m in 2022.
Despite bouncing back to pre-pandemic levels in 2022, the Somerset-based cidery said it saw a “definite downward trend”.
It added: “However, in 2022 category spend recovered sufficiently to reach higher than pre-pandemic levels and the four years prior.
“Perhaps we are seeing a resurgence of cider brands investing in advertising.”
This week, Thatchers, the UK’s second-largest cider maker by sales after Heineken, lost a trademark case against supermarket chain Aldi over an alleged copycat of its lemon cloudy cider.
Thatchers claimed Aldi’s Taurus cloudy cider lemon “mimicked” its own variant and could cause confusion.
A judge ruled the overall appearance of the Taurus cloudy cider lemon can was “not detrimental” to Thatchers.
Fiona McBride, chair and trademark attorney at European intellectual property firm Withers & Rogers, said the Thatchers lawsuit judgement was “unsettling for brand owners”.
She warned: “This is unlikely to be the last case of its kind... Aldi should expect further infringement claims of this nature from disgruntled brand owners if it continues to develop ‘exclusive’ products that have some similarity to others in the marketplace.”