Evolving Culture of European Alcoholic Beverage Industry

European alcoholic beverage industry is one of the largest industries in the world. A dynamic shift has been noticed in consumer behaviour in Europe now consumers are drinking fewer volumes of alcohol. In the last 15 years, per capita of alcohol consumption in some European reason saw a drastic change in 2015, such as the UK, Spain, Italy, Ireland, Switzerland, Denmark, Belgium and France since 2000. But in Sweden and the Czech Republic, the consumption of alcohol remained the same, while in Poland and Romania the consumption has increased in over those 15 years. Despite the decline in alcohol consumption, the shift in consumer behaviour has also observed consumers spending on alcohol have increased with time.

Market Size of the European Alcoholic Beverage Industry:

The European countries are the largest producer of the biggest alcoholic brands that are originally originated from the EU region. These alcohol producers have been carried down through successive generations and also it is attributed to the fact that drinking has been a cultural institution for these countries. The European alcoholic beverage industry trend is to consume less alcohol but a better quality or a premium one. Dutch wine consumers are willing to pay more for wines that are classified as special and they are more interested in specific grape varieties and discovering new wine regions. The European alcoholic beverage industry is extremely competitive.

The alcoholic retailers are striving for the attention of the places where people regularly sit over glasses of wine, such as the growing number of restaurants, bars hotels and other venues, etc. The European alcoholic beverage industry is expected to grow by 2.6% according to the compound annual growth rate (CAGR) over the period 2019–2023. The market value of the European alcoholic beverage was approximate €424 billion in 2018. In 2019, per person revenue of €508.67 has generated in comparison to total population figures. Wine is the largest segment of the European alcoholic beverage industry with a market volume of €159,954 million and the revenue in the alcoholic drinks market amounts to €384,753 million in 2019.

Germany is the largest market for alcoholic beverages in Europe. France is the second largest market in Europe with nearly €12.6 billion sales value in 2015 and Germany’s sales value of alcoholic drinks amounted to approximately €18.7 billion. The United Kingdom is the third largest with sales values of €5.7 billion and Italy is the fourth-largest market with €4.9 billion in Europe. In 2018, Eastern Europe and Western Europe represented a market value of approximately €92 and €332 billion.

Evolving Culture of European Alcoholic Beverage Industry:

In recent years, being a healthy trend has had the most significant impact on the European alcohol industry. This healthy lifestyle trend did not affect the sale of alcohol in the EU market but it has been critical in influencing the trend to converge the demand into natural botanical ingredients added to spirits, increased use of fruit flavours in ciders, ready to drink products and a growth in demand for natural wines. A huge shift has had witnessed in the consumption of alcohol among young adults, they have reduced their average consumption over time. This, in turn, low- or alcohol-free alternatives are in huge demand now and many brands are focussing on it particularly.

In the United Kingdom, over a quarter of 16 – 24-year-olds are abstained from drinking alcohol and this trend is increasing amazingly among the young adults. As a result, last year, the value of non-alcoholic wine and beer has increased by 66% and 37% respectively in the UK. In 2018, in the UK non-alcoholic beer sales increased by 60% in comparison to 2017, concluded by Kantar Worldpanel. Spain and Sweden have also seen an increased demand for low and alcohol-free beer in the country.

Low alcohol wine makes up 3% of the alcohol market worth more than £70 million in Europe since 2009. According to Canadian research, it is found that the volume of low alcohol beer consumption in Western Europe is growing by 1% annually with a recorded growth of 7% for alcohol-free beer. In 2017, the value of non-alcoholic beer was worth €4.1 billion, highlighting the potential for alcohol-free alternatives.

Cross-Category Innovation in the European Alcoholic Beverage Industry:

A change in the European alcoholic beverage industry is witnessing as consumers are drinking less alcohol across Europe. It is assumed that innovation could be a major reason behind the change and it is also shaping the way brands produce products with shaping technology. In turn, Europe is observing an unusual pairing between types of alcohol.

Glenfiddich:

Glenfiddich is one of three William Grant-owned whisky distilleries which sit in relatively close proximity to each other to the north of Dufftown, the spiritual heart of Speyside. The brand has started producing some of its whiskey in IPA casks and has also changed its packaging style to attract more customers. Glenfiddich matures its single malt whisky in its onsite warehouses, which can house up to 800,000 casks.

Accolade Wines:

Accolade Wines is a major global wine business of Australia and has added a new rum and wine fusion drink to its Echo Falls wine brand. In 2019, the second in the spirit-wine fusion add-on to be launched till the year-end. Accolade Wines have also expanded their Echo Falls fruit infusion wine range to bring berry vodka to the alcohol market. The new white wine with rum and sweet coconut and pineapple flavours and has already been listed by Morrisons and Bestway, which is 9% abvEcho Falls White Wine and Coconut Rum Fusion combine Echo Falls.

Other examples of this crossover between types of alcohol are Jack Daniel’s whisky cider; Rekorderlig Cider cocktails and Seattle Cider Company developing cider rosé. Also, some brands are running an in-store promotion to pair brandy and coffee. To retain consumer engagement brands are challenging the market norms and producing products that appeal to more people to reach a wider audience.

With diversification in the category, geographical reach and brand positioning it is required that the trend of premiumisation and aspirational consumption be balanced. In the coming years, the decline is likely to continue to prevail as the burgeoning trend in a healthy lifestyle and attentive drinking is swiftly developing. Yet individuals are willing to spend more money on alcohol due to the premiumisation of alcohol products despite the above fact.

If you would like to talk to us and discuss whether we can be a good team together, you can send a message to us here directly. We will reply to you within 24 working hours.