Alcohol Industry In Decline- Could Zero Alcohol Beer Help It Recover?
All types of industry in the UK have experienced something of a decline due to the coronavirus. Many businesses have seen sales take a massive downtown, and the drinks trade is no different. Forced closure of pubs, bars and restaurants due to the Covid-19 pandemic has had a devastating impact on the alcohol industry and it could take years to recover. Insiders feel that sales could take up to four years to bounce back. This prediction is partly based on information gathered by IWSR, a leading drinks market analysis firm. They provide an overview of the alcohol market, covering the latest innovations and trends.
Drop in market worse than during 2008
Researchers believe that during the crisis, alcohol manufacturers have seen a major drop in their market in 2020. Closing bars and restaurants have had a huge detrimental effect the extent of which they have never seen before. Many consider the pandemic to be the worst situation the industry has faced in recent history. The drop in alcohol sales in lockdown is worse than the decline following the worldwide financial crisis 12 years ago.
Pub, Club and restaurant staff worried
The danger is also incredible considering that, before the crisis, sales of spirits like gin had gone through the roof in the past ten years. Gin’s rising popularity saw a deluge of new brands being launched in the UK. According to findings, the drinks trade enjoyed an increase in consumption last year if over 3.5% in value. Gin was the most rapidly growing spirit, with volumes rising by more than 6%, compared to 12 months earlier. 2019 is now generally considered the last so-called `normal` year in the alcohol industry, where everything ran as expected. We now find ourselves in uncharted territory, where the entire marketing landscape is changing and may be unrecognizable in four years’ time. Reportedly, pubs and bars have a massive build-up of alcohol in stock, which they are unable to sell. There are fears that many premises may be forced to close for good. Inevitably this will reduce alcohol sales and harm the industry. There may be mass unemployment, with many drinks industry employees worried about their future and when, or if, they will be able to return to work.
Hope from low-alcohol alternatives?
Despite the situation, some experts still feel there could be encouraging signs for one aspect of the drinks trade. There could be light at the end of the tunnel for beer manufacturers who may be one of the first to witness a return to pre-lockdown sales. These are experiencing a rise in value and volume of about 0.3%, partly due to an upsurge of non-alcohol beer. This product range grew by over 15% in volume compared to 2018. There is hope it could soon revert to levels it achieved 12 months ago.
Inevitably, major beer manufacturers such as Molson Coors and Carlsberg, amongst others, have seen a huge decrease in sales during the pandemic, but insiders feel they may have the tools to fight back. Focussing on selling low alcohol beer could give the industry a much-needed lifeline. Especially after a recent survey revealed online sales have increased by over 40%, in comparison to this time last year.
A continued rise in popularity of non-alcohol beverages could see beer reaching 2019 volume levels and bouncing back quicker than wine and spirits.
Hope for the drinks industry
We are living in frightening, unprecedented times, which some believe may have a lasting effect on the alcohol industry. Some fear it may take years for businesses to recover from the coronavirus, if at all.
However, it’s possible the drinks trade could experience a growth again in the near future and low alcohol beer may turn out to be its saviour. It may take years, but the industry could get back to the way it was before lockdown. The move towards lower alcohol consumption in the younger generation could also help this turnaround. So there is hope that pubs, clubs and restaurants can recover after the crisis is over.