Beer: Inc Impact of COVID-19 - UK - November 2020

OVERVIEW
Key issues covered in this Report
COVID-19: Market Context
Economic and other assumptions
Products covered in this Report
EXECUTIVE SUMMARY
Impact of COVID-19 on beer
Figure 1: Short-, medium- and long-term impact of COVID-19 on beer, 24 November 2020
The market
Beer sales hit hard by the closure of pubs and bars
Beer volumes will take time to recover to pre-COVID levels
Figure 2: Forecast of UK value sales of beer, 2015-25 (prepared 24 November)
Lager extends its market dominance
Focus on health expected to endure
Over-55s warrant attention
Companies and brands
Continental lagers shine 
Figure 3: UK retail value sales of the leading lager brands, 2019/20*
Guinness and BrewDog grow in off-trade
Figure 4: UK retail value sales of the leading ale and stout brands, 2019/20*
Low and no alcohol space continues to attract NPD
Various brands move to strengthen sustainability 
Adspend sees dramatic drop
Low loyalty, low willingness to pay more for mainstream brands
The consumer 
Beer usage falls sharply in 2020
Figure 5: Frequency of drinking beer, October 2019 and September 2020
Seven in 10 beer drinkers drink lager
Figure 6: Types of beer drunk in the last 3 months, September 2020
Craft varieties drunk by four in 10 beer drinkers
Fruit-flavoured beers are on the menu for one in four
Low-/non-alcoholic beer warrants attention
Figure 7: Varieties of beer drunk in the last 3 months, September 2020
Supermarkets are the main source of purchase; a quarter shop online
Special offers most likely to encourage purchase
Figure 8: Factors most likely to prompt buying of new beer, September 2020
New launches are needed to retain engagement
Quality over quantity preferred by six in 10
Beer is go-to evening-in drink for half of drinkers
Figure 9: Behaviours related to beer, September 2020
Strong interest in brands supporting local pubs
Direct-to-consumer sales an opportunity
Figure 10: Attitudes towards beer, September 2020
ISSUES AND INSIGHTS
COVID-19 puts bigger emphasis on drinking beer at home
Consumers slow to return to buying beer at pubs/bars
Beer is go-to evening-in drink for half of beer drinkers
Brands can tap into remote socialising
Big opportunity for more brand extensions in beer
New launches important for beer brands
Flavour development helps to drive sales
Fruit-flavoured beers are on the menu for one in four
Dual approach needed to combat alcohol moderation trend
COVID-19 puts a spotlight on health
Low-/non-alcoholic beers gaining ground
Quality over quantity preferred by six in 10
Half see craft as worth paying more for
Emphasis on localness and community will help to support sales
Local beers have strong appeal
Strong interest in brands supporting local pubs
Direct-to-consumer sales an opportunity
THE MARKET – KEY TAKEAWAYS
Beer sales hit hard by the closure of pubs and bars
Beer volumes will take time to recover to pre-COVID levels
Lager extends its market dominance
Focus on health expected to endure; over-55s warrant attention
MARKET SIZE AND FORECAST
Beer sales hit hard by the closure of pubs and bars
Figure 11: Short-, medium- and long-term impact of COVID-19 on beer, 24 November 2020
Value sales of beer estimated to fall by a quarter in 2020
Figure 12: Total value and volume sales of beer, 2015-25 (prepared 24 November)
Beer volumes will take time to recover to pre-COVID levels
Figure 13: Forecast of UK value sales of beer, 2015-25 (prepared 24 November)
Figure 14: Forecast of UK volume sales of beer, 2015-25 (prepared 24 November)
Market drivers and assumptions
Figure 15: Key drivers affecting Mintel’s market forecast, 2015-24 (prepared on 27 October 2020)
Learnings from the last recession
Figure 16: Growth in value and volume sales of beer, 2009-13
Forecast methodology
MARKET SEGMENTATION
Lager dominates the UK beer market
Figure 17: UK value and volume sales of beer, by type, 2018-20
Move to premium but declining volume sales in ales/bitter
Retail sales boost not enough to make up for lost pub sales in stout
CHANNELS TO MARKET
Collapse in on-trade beer sales during COVID-19 outbreak
Sales of beer through retail set to increase by nearly 31%
Figure 18: Value and volume sales of beer, by channel, 2015-20
MARKET DRIVERS
Number of factors hitting volume consumption of beer
Alcohol moderation trend poses threat to beer sales
COVID-19 pandemic means fewer people drinking beer
Focus on health and saving money likely to increase
Figure 19: Reasons for limiting/reducing alcohol usage, April 2019
Beer duties unchanged since 2017 but duty system under review
Figure 20: UK excise duty rates for beer, 2009-19
Rising costs likely to push up beer prices
End of Brexit transition period should have small impact on beer
Government looks to support the economy and health
VAT cut and Eat Out to Help Out aimed to support foodservice
Government’s health push puts a spotlight on obesity
Most people’s financial position still healthy or OK
Figure 21: Trends in how consumers describe their financial situation, December 2014-October 2020
35-44s an important group to target for beer brands
Figure 22: Trends in the age structure of the UK population, 2015-25
COMPANIES AND BRANDS – KEY TAKEAWAYS
Continental lagers shine, Guinness and BrewDog grow in off-trade 
Low and no alcohol space and sustainable continue to attract NPD
Adspend sees dramatic drop, campaigns touch on COVID-19
Low loyalty, low willingness to pay more for mainstream brands
MARKET SHARE
Majority of lager brands see double-digit increases in retail sales
Stella retains position as number one lager brand
Strong performances for continental lagers
Figure 23: UK retail value and volume sales of the leading lager brands, 2018/19-2019/20
Guinness and BrewDog make big gains in off-trade 
Figure 24: UK retail value and volume sales of the leading ale and stout brands, 2018/19-2019/20
LAUNCH ACTIVITY AND INNOVATION
Major players continue to expand low and no alcohol offerings…
Guinness launches 0.0 beer
Tennent’s Zero moves into the off-trade
Stella Artois joins low &amp; no beer market
Sharp’s creates the most widely available alcohol-free amber ale
…while craft beer pushes innovation in the space
The Alcohol Free Brewing Company makes its debut
Big Drop pushes boundaries of alcohol-free flavour
Beavertown introduces low-/no-alcohol craft beer range
Figure 25: Examples of low-alcohol and alcohol-free beer launches, 2020
New product development gets fruity
Figure 26: Examples of beer launches with fruit and fruit products as an ingredient in the UK beer market, 2020
Limited edition launches are far from limited
Harvest Hells returns
Beavertown promises a new beer every month
Campervan Brewery launches Limited Edition range
Beer brands come out in support for NHS and community
Camden Town Hells rebranded for NHS heroes
Freedom Brewery brings neighbours together
NPD continues to explore sustainability 
Cardboard packaging becoming more commonplace
Tennent’s to capture carbon emissions
BrewDog goes carbon negative
Surplus food continues to provide inspiration
Major players refresh core brands
Coors Original heading to the UK
Budweiser Budvar range reveals new packaging
Budweiser Prohibition axed for Bud Zero
Grolsch relaunches in the UK
ADVERTISING AND MARKETING ACTIVITY
Adspend sees dramatic drop
Figure 27: Total above-the-line, online display and direct mail advertising expenditure on beer, by month, 2019 - September 2020
Heineken recruits James Bond for Dry January
Figure 28: Total above-the-line, online display and direct mail advertising expenditure on beer, by top 20 advertisers in 2019 and January-September 2020
Molson Coors
Carling continues to focus on localism
Pravha launches first UK campaign
Coors Light debuts first new campaign in six years
Figure 29: Total above-the-line, online display and direct mail advertising expenditure on beer, by top 20 brands in 2019 and January-September 2020
Guinness doesn’t want people to toast
Carlsberg leads spending
Budweiser revives classic ad to highlight togetherness
Corona Extra wants to help people rediscover paradise
Asahi Super Dry launches first global campaign
Peroni focuses on the small things
BrewDog opens virtual bar…
…and various other breweries host online pub quizzes
Nielsen Ad Intel coverage
BRAND RESEARCH
Brand map
Figure 30: Attitudes towards and usage of selected brands, November 2020
Key brand metrics
Figure 31: Key metrics for selected brands, November 2020
Brand attitudes: Guinness stands out as consistently high quality
Figure 32: Attitudes, by brand, November 2020
Brand personality: BrewDog seen as more fun than others
Figure 33: Brand personality – macro image, November 2020
Guinness stands out as the most traditional brand
Figure 34: Brand personality – micro image, November 2020
Brand analysis
Peroni seen as more sophisticated than other brands
Figure 35: User profile of Peroni, November 2020
BrewDog seen as the most innovative brand
Figure 36: User profile of BrewDog, November 2020
Guinness stands out on authenticity
Figure 37: User profile of Guinness, November 2020
Stella Artois has strong associations with quality
Figure 38: User profile of Stella Artois, November 2020
Budweiser failing to stand out from other lager brands
Figure 39: User profile of Budweiser, November 2020
Being refreshing and good value Heineken’s strongest points
Figure 40: User profile of Heineken, November 2020
Carling has lowest level of satisfaction
Figure 41: User profile of Carling, November 2020
THE CONSUMER – KEY TAKEAWAYS
Beer usage falls sharply in 2020
Supermarkets are the main source of purchase, a quarter shop online
Low-/non-alcoholic beer warrants attention, but so does ‘less but better’
New launches are needed to retain engagement
Beer is go-to evening-in drink for half of drinkers
Strong interest in brands supporting local pubs
IMPACT OF COVID-19 ON CONSUMER BEHAVIOUR
Confidence about visiting restaurants/bars was slowly returning
Figure 42: Concerns about going to restaurants/bars indoors, 10-19 November 2020
Four in 10 try to limit time in-store; a boost to online shopping
Figure 43: Selected behaviour changes since the COVID-19/coronavirus outbreak, 10-19 November 2020
COVID-19 pandemic expected to heighten focus on sustainability
Figure 44: Changes in the environment being seen as a priority since the COVID-19 outbreak, by gender and age, 8-19 October 2020
Greater focus on eating healthily likely to feed through to drinking
Figure 45: Changes in eating healthily being seen as a priority since the COVID-19 outbreak, by gender and age, 8-19 October 2020
USAGE OF BEER
63% drink beer; 38% at least weekly
Figure 46: Frequency of drinking beer, October 2019 and September 2020
25-44 males are core beer drinkers
Figure 47: Drinking beer once a week or more often, by gender and age, September 2020
CHANGES TO BEER DRINKING SINCE COVID-19 OUTBREAK
59% of drinkers are drinking the same amount of beer; equal numbers report drinking more and less
Figure 48: Changes to amount of beer drunk since the COVID-19/coronavirus outbreak, September 2020
TYPES OF BEER DRUNK
Seven in 10 beer drinkers drink lager
Figure 49: Types of beer drunk in the last 3 months, September 2020
Small repertoire of types of beer drunk by most beer drinkers
Figure 50: Number of different types of beer drunk in the last 3 months, September 2020
VARIETIES OF BEER DRUNK
Craft varieties drunk by four in 10 beer drinkers
Fruit-flavoured beers are on the menu for one in four
Figure 51: Varieties of beer drunk in the last 3 months, September 2020
A quarter of beer drinkers drink low-/non-alcoholic beer
More large brands enter the segment
Figure 52: Usage of low-/non-alcoholic beer, by age, September 2020
WHERE BEER IS PURCHASED
Supermarkets main source of purchase
One in five buys beer at discounters
Figure 53: Where beer is bought, September 2020
Nearly a quarter bought beer online 
Consumers slow to return to buying beer at pubs/bars
FACTORS MOST INFLUENCING CHOICE OF NEW BEER
Special offers most likely to encourage purchase
Figure 54: Factors most likely to prompt buying of new beer, September 2020
Flavour development helps to drive sales
Local beers have strong appeal
BEER BEHAVIOURS
New launches important for beer brands
Figure 55: Behaviours related to beer, September 2020
Low- and non-alcoholic beers gaining ground
Quality over quantity preferred by six in 10
Half see craft as worth paying more for
Beer is go-to evening-in drink for half of beer drinkers
Brands can tap into remote socialising
ATTITUDES TOWARDS BEER
Strong interest in brands supporting local pubs
Figure 56: Attitudes towards beer, September 2020
Direct-to-consumer sales an opportunity
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology
APPENDIX – MARKET SHARE
Figure 57: UK retail value and volume sales of the leading lager manufacturers, 2018/19-2019/20
Figure 58: UK retail value and volume sales of the leading ale and stout manufacturers, 2018/19-2019/20
APPENDIX – ADVERTISING AND MARKETING ACTIVITY
Figure 59: Total above-the-line, online display and direct mail advertising expenditure on beer, by month, by media type, 2019 and January-September 2020