Offering some good news for beer during a time of limited social occasions, 42% of people who drink and buy beer enjoy drinking it while remote socialising with friends/family, making this a key occasion for brands to target. Putting a spotlight on the shared sensory experience of enjoying the same drink could tap into the demand for a connection beyond the virtual.

Beer sales are estimated to fall by 9% by volume and 26% by value in 2020, to 4 billion litres and £14.1 billion. The temporary closures of pubs, bars and restaurants due to COVID-19, and restrictions on these venues when they’ve been able to operate, are estimated to see beer sales through the on-trade halve. Some of this has shifted to retail, but many occasions have been lost.

The alcohol moderation trend is a threat to sales of beer. An increase in product choice in low-/non-alcoholic beers over the last few years encouraged 25% of beer drinkers to drink these in the 3 months to September 2020. Among these drinkers, 56% claim to be drinking more low- and non-alcoholic beers since the COVID-19 outbreak, showing they are gaining ground to help support beer sales.

Brand extension, including flavour development, is an opportunity for brands, given that 65% of people who buy and drink beer like to try new beers from their favourite brands and illustrates the importance to brands of new launches to keep existing brand users engaged and buying. Learnings from cider and white spirits underline the potential for more fruit-flavoured variants, for example.

• The impact of COVID-19 on the drinking and buying of beer.

• Types and variants of beer drunk, and where beer purchased.

• New launch activity in beer, and factors most likely to prompt the buying of a new beer.

• Perceptions and usage of brands in the beer market.

• Behaviours and attitudes related to the drinking and buying of beer.

The first COVID-19 cases were confirmed in the UK at the end of January, with a small number of cases in February. 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 23 March. It wasn't until 15 June that non-essential stores were allowed to re-open, followed by pubs, restaurants, hotels and hairdressers on 4 July, and many beauty businesses on 13 July.

By September, it had become clear that the UK was at the start of a second wave, and social distancing measures were intensified. Continued increases in infection numbers led to Wales implementing a two-week national lockdown from 19 October, England announcing a full month-long lockdown from 5 November, and Scotland introducing a new five-level system of coronavirus restrictions. 

If case numbers remain high, it can be expected that the lockdown will be extended in England, but even if the second national lockdown does end as planned on 2 December, the current plan is to return to the regional tiered approach that was in force before the lockdown, meaning that large parts of the country may still effectively be locked down. 

Mintel’s economic assumptions are based on the Office for Budget Responsibility’s central scenario included in its July 2020 Fiscal Sustainability Report. The scenario suggests that UK GDP could fall by 12.4% in 2020, recovering by 8.7% in 2021, and that unemployment will reach 11.9% by the end of 2020, falling to 8.8% by the end of 2021.

The current uncertainty means that there is wide variation on the range of forecasts, however, and this is reflected in the OBR’s own scenarios. In its upside scenario, economic activity returns to pre-COVID-19 levels by Q1 2021. Its more negative scenario, by contrast, would mean that GDP doesn’t recover until Q3 2024.

The Welsh and English lockdowns will inevitably have an impact on GDP and consumer finances, potentially shifting the UK closer to the OBR’s downside scenario. The market forecasts in this Report reflect this new reality.

From the start of the outbreak, we have made the assumption that an effective vaccine would not be widely available until well into 2021. On 9 November, Pfizer and BioNTech announced highly encouraging results from trials of their vaccine, followed by similarly positive results from Moderna.

This means that a vaccination programme may be brought forward, but a full rollout will take many months, meaning that Mintel is still making the assumption that we will be living with COVID for some time to come.

This Report looks at the UK (United Kingdom) market for beer sold in both the on-trade, ie out-of-home outlets such as pubs, restaurants and clubs where the drink is consumed on the premises, and the off-trade market, eg supermarkets, online, off-licences and convenience stores.

The beer market is divided into three main segments:

• Lager can broadly be described as a light/amber, clear, carbonated beer brewed with pale-kilned malts which, after fermentation, is filtered, pasteurised and conditioned before being packaged in cans, bottles or kegs for sale. Spirit- and fruit-flavoured beers are also included within lager in this Report.

• Ale refers to top-fermented beers including bitter and mild, pale, export and brown ales, barley wine and strong ales, as well as Indian and American pale ales, among others. These beers are so-called because the yeast floats to the surface during fermentation, as opposed to lagers, which are bottom-fermented. Barley wine is simply a beer with a very high ABV (alcohol by volume).

• Cask ales are pulled by hand pump and oxidised in an aerobic environment once opened, which demands quick throughput to maintain optimum condition and means they are served from a cask without additional carbon dioxide or nitrogen pressure. Cask ales go through a process of ‘secondary fermentation’ while being stored in pubs, meaning that each barrel often has a unique taste. They are sometimes referred to by consumers and/or the trade as ‘real ale’. However, the definition of real ale also includes ales which are bottle conditioned.

• Alcoholic ginger beer and bitter are also included within ales in this Report.

• Stout is a derivative of porter, originally an 18th century brown mild ale. Stout is a black, dense beer, which is usually top-fermented, and made with dark roasted barley and an abundance of hops, which provide the characteristic flavour. Porter – a dark style of beer made from brown malt – is included within the definition of stout.