Demonstrating how the closure of the hospitality sector in response to the COVID-19 outbreak has spurred people to seek to replicate the pub/bar experience at home, 38% of white spirits/RTDs drinkers/buyers report to have started making or to be making more homemade cocktails since the outbreak. Similarly, as a result of the on-trade closures coupled with the hot summer, 60% of white spirits/RTDs users/buyers bought pre-mixed alcoholic drinks to drink when socialising outdoors in the six months to October 2020.

The COVID-19 outbreak brought about a sharp shift in drinking occasions to in-home, driving strong growth in retail volume sales, which nudged the overall white spirits and RTDs category into modest volume growth in 2020. However, this shift to the lower priced off-trade meant that value sales plunged dramatically. With the hospitality sector set to be closed for most of the first half of 2021 as a result of the lockdowns that began in January, this will slow the recovery of on-trade sales while continuing to buoy up retail sales.

The alcohol moderation trend, given extra momentum by the COVID-19 outbreak, poses a challenge to the market. However, it also allows scope for further NPD in lower-calorie, low-/non-alcoholic versions. The wider health trend that this is related to will fuel opportunities for lower sugar RTDs.

Offering cocktail recipe suggestions would allow companies to tap into the home cocktail making trend, with cocktail-making kits another promising avenue for companies to explore on this front. White spirits with historical recipes can also help companies to respond to the homemade cocktails trend through promoting recipes recreating mixed drinks/cocktails from the era the spirits’ recipes are based on. These variants’ particular appeal to over-35s, meaning they can also help companies to retain users in the category for longer.

Key issues covered in this report

  • The impact of COVID-19 on the white spirits and RTDs category and the outlook for the category.

  • Launch activity in 2020 and future product development opportunities.

  • Changes in purchase patterns and channels.

  • Consumer views of white spirits’ health credentials and qualities, including associations with particular occasions.

COVID-19: Market context

The first COVID-19 cases were confirmed in the UK at the end of January 2020, with a small number of cases in February. Rapidly rising case numbers led to the first national lockdown, starting 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 month-long lockdown from 5 November, and Scotland introducing a new five-level system of coronavirus restrictions. 

Despite these restrictions, however, case numbers continued to increase. All four UK nations tightened restrictions in January 2021, effectively leading to a full UK-wide lockdown.

On 22 February, Boris Johnson announced the roadmap to an easing of restrictions in England, starting with the re-opening of schools on 8 March, followed by easing of restrictions on outdoor gatherings on 29 March, and with a hoped end to all restrictions by 21 June. The Welsh and Scottish governments also gave more details on their plans to ease restrictions, with both nations taking a slightly more cautious approach to the one planned for England.

The UK’s vaccination programme started on 8 December 2020, and the Pfizer-BioTech, Moderna and Oxford-AstraZeneca vaccines are all licenced for use in the UK. The government aims to offer a first dose of the vaccine to 32 million people by mid-April.

Economic and other assumptions

Mintel’s economic assumptions are based on the Office for Budget Responsibility’s central scenario included in its March 2021 Fiscal Sustainability Report. After the fall of 9.9% over the course of 2020, the scenario suggests that UK GDP will grow by 4% in 2021, and 7.3% in 2022.

GDP isn’t expected to return to pre-COVID levels until the second quarter of 2022, although this is six months earlier than the OBR forecast in November 2020, mainly because of the faster than expected rollout of vaccines.

Unemployment is expected to peak at 6.5% in the fourth quarter of 2021. As with GDP, this is more positive than the OBR’s November forecast, but the OBR does raise the prospect of long-term scarring on employment, especially in the more exposed retail and hospitality sectors.

Products covered in this Report

For the purposes of this Report, Mintel has used the following definitions:

Vodka is a clear, colourless, almost odourless spirit made from the distillation of potatoes, and sometime from corn, rye, wheat, sugar beet molasses or other agricultural matter. The European Union requires that vodka must have a minimum ABV (Alcohol by Volume) of 37.5%. Flavoured vodkas such as Smirnoff Infusions, which are simple flavoured versions of the base spirit, are included in this Report.

Gin predominantly derives its flavour from juniper berries and falls into two distinct categories: distilled gin is made from re-distilling the neutral spirit of agricultural origin with juniper berries and other botanicals, while compound gin is made by flavouring the neutral spirit with flavourings without re-distilling it and is hence typically considered inferior in quality.

White rum is produced from sugarcane juice and molasses. Unlike dark rum, it is aged in plain oak casks or stainless steel tanks. Bacardi and Malibu are the two best-known brands in this segment.

Tequila is a distilled beverage made from the blue agave plant, primarily in the area surrounding the city of the same name in Mexico. Tequila is most often made at 38-40% ABV but can also be produced at 31-55%. Mezcal is made from Maguey, a type of agave plant, although it remains niche in the UK.

RTDs is a trade term used to describe any drink featuring an alcoholic drink and a mixer sold pre-mixed typically either in bottles or cans. They include fruit-, herb-, soda- or water-based, still or carbonated drinks combined with at least one base spirit, and usually have an ABV of 4-6%. Mintel uses the terms RTDs and pre-mixed drinks interchangeably in this Report.

Not all RTDs are made from white spirits (eg Jack Daniel’s & Coke in a can), although white spirits have traditionally been the base spirit for this category. This Report will analyse the whole RTD market, not just those products with white spirits as a base.

The market size includes both on-trade and off-trade sales.

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