Since its outbreak in March 2020, COVID-19 has put in motion a series of unprecedented challenges for the drinks industry. While lockdown restrictions have dramatically reduced drinking occasions and thus sales through on-premise venues, they have also opened up new opportunities for at-home consumption. Even as we move out of lockdown, however, the economic after-effects of the virus will continue to create challenges as consumers cut down on non-essential spending.

As with the 2008/09 recession, economic uncertainty will tend to favour own-labels, which have significantly increased their offering over the last decade and gained market share across different drink categories. Hence, it will be crucial for brands to invest in launches and campaigns designed to highlight their heritage and unique features to persuade consumers to prioritise value over price alone.

However, the post-coronavirus world will also provide opportunities. The pandemic has led to new drinking habits which will continue in the ‘next normal’, and has strengthened green sentiments as well as associations between overall health and nutritional choices. Brands that adapt their recipes and marketing strategies to take into consideration post-lockdown habits and changes in consumer priorities can maintain and grow their position in the market.

• The impact of COVID-19 on consumer behaviour and how it will influence what consumers are looking for from brands.

• How leading drink brands score on metrics like usage, trust, satisfaction, likely recommendation and perceived differentiation.

• The top-scoring brands for particular personality traits, including innovation, value, quality, ethics and taste.

• The leading brands on hot topics in the drinks sector – lifestyles, health and wellness.

Since October 2017, Mintel has conducted brand research on over 80 brands operating in drinks markets. As well as consumers’ attitudes towards brands, we investigate how many people have used those brands, how positive their experience of the brand was and whether they would recommend that brand.

Research is run at a brand level, rather than based on a particular product. So rather than asking specifically about people’s perception of Tropicana’s orange juice or of Bacardi’s white rum, for example, we ask about their overall perception of the Tropicana and Bacardi brands.

Data in this Report is drawn from fieldwork conducted between October 2017 and April 2020. Many brands have been covered on multiple occasions and, unless otherwise stated, Mintel’s data refers to the most recent wave of research in which a given brand featured. Please refer to the Report Appendix for details of the Reports from which the brand data has been taken.

This update on the impact that COVID-19 is having on the drinks industry was prepared on 17 July 2020.

The first COVID-19 cases were confirmed in the UK at the end of January, with a small number of cases in February. The government focused on the ‘contain’ stage of its strategy, with the country continuing to operate much as normal. As the case level rose, the government ordered the closure of non-essential stores on 20 March.

A wider lockdown requiring people to stay at home except for essential shopping, exercise and work ‘if absolutely necessary’ followed on 23rd March. Initially, a three-week timeframe was put on the measures, which was extended in mid-April for another three weeks.

On 10 May 2020, the Prime Minister announced revised guidance, recommending that people who could not work from home should return to the workplace, and giving people more scope to spend time out of the home. Further relaxations to lockdown rules were announced in the week of 23rd May, including gradual reopening of non-essential retailers, and increased opportunities for social interaction across households. Non-essential retailers were allowed to reopen from 20 June, while restaurants and pubs were allowed to reopen on 4 July, provided they followed certain social distancing protocols.

Our economic assumptions are based on the illustrative scenario included in the Bank of England's Monetary Policy Report, released on 7th May 2020. The scenario suggests that UK GDP could fall by 14% in 2020, recovering by 15% in 2021, and that unemployment will reach 8% by the end of the year, easing slightly to 7% by the end of 2021. The current uncertainty means that there is wide variation on the range of forecasts, however.

We are working on the assumption that a vaccine will be available by mid-2021, but that there will be continued disruption to both domestic and global markets for some time after that.

As long as there is not a second wave of infections, social distancing measures should be gradually relaxed over the course of 2020, but we don't expect industries such as spectator sports, tourism or foodservice to return to any kind of normality until a vaccine is introduced. In the meantime, the economic disruption will mean that many operators will be forced out of the market, hitting capacity. In markets which were already in decline, we expect this reduction in capacity to be permanent.