Sales of beer, wine and spirits fell 4% across the European retail channel last year, according to IRI, as consumers cut discretionary purchases to moderate the impact of inflation.
According to IRI, total alcohol category sales value in the European supermarket, discounter, convenience store and off-licence sectors totalled €66 billion in 2022, down €2.7 billion year-on-year.
The data was revealed in IRI's FMCG Demand Signals report, which covers some 230 FMCG categories, 2,000 product segments and more than 100 million SKUs.
New Consumption Patterns
“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,” commented Ananda Roy, Global SVP, Strategic Growth Insights, IRI.
In 2020, alcohol sales had a bumper year, rising €7.5 billion to €67.3 billion, due to consumers being confined to their homes due to COVID-19. The following year also saw an increase, of 0.7%, ahead of the 2022 drop in sales.
'A Perfect Storm'
Currently, according to Roy, alcohol brands are caught in a "perfect storm" at present, given the cost-of-living crisis facing many households.
“Alcohol sales tend to peak during a recession as consumers eat in instead of out," he said. "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 tradeoffs to moderate its impact on their available income."
Looking ahead to the coming year, IRI anticipates that alcohol sales – whether at-home or out-of-home – are unlikely to grow without investment in new drinks products tailored to customer needs and consumption moments.
The zero- and low-alcohol category is likely to accelerate, however, as the price of alcoholic beverages continues to rise, while Champagne, Prosecco and the ready-to-drink categories are likely to show some degree of resistance to recessionary decline.
© 2023 European Supermarket Magazine – your source for the latest drinks news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.