Summer of love for hard seltzers and RTD cocktails?
Last summer we were still somewhat held back by Covid rules. Restrictions did not fully lift in England until July 19 and, while the on-trade was open, the number of people able to meet in a group was limited and many consumers were still cautious of large crowds. With a return to normality on the cards for the UK, what can we expect from shoppers in 2022?
This summer we anticipate things will be very different, with shoppers more willing to return to on-trade venues to socialise with friends and family. If we use Christmas as a reference, it is clear consumers are keen to get back to bars and are taking their off -trade spend with them.
This summer, festivals are planned to go ahead, sporting venues are open and travel outside of the UK is a lot more accessible than last summer. With this backdrop, it is predicted we will see declines for the off-trade.
However, it isn’t all doom and gloom for off -trade sales as summer bank holidays provide great uplifts for alcohol in supermarkets. During the August bank holiday 2021, we saw value uplifts of 9.7% on the week before. This year, with a four-day weekend planned to celebrate the Queen’s Platinum Jubilee, we can expect a boost in sales as this time provides families and friends with the perfect opportunity to get together.
Whether consumers are purchasing in the on or off -trade, there are some key summer trends to watch out for. As the sun begins to shine it will be cocktails, flavoured alcoholic beverages and RTDs that come out in force. RTDs continue to gain in popularity and have seen growth of 15.1% in full-year 2021, despite total alcohol declining. RTD sales spike in the summer months – last year the eight weeks ending July 17 accounted for 20% of RTD yearly value, which is higher than we see for total alcohol.
RTDs’ on-the-go format provides convenience to shoppers, lending itself to out-of-home occasions such as parties and festivals, as well as at-home gatherings with family and friends. We are seeing an increasing thirst for cocktails and RTDs meet this need. In fact, in the latest year the top cocktail in terms of value growth was the Passion Fruit Martini, with Strawberry Daiquiri and Piña Colada also making it into the top 10. RTDs’ growing popularity and summer seasonality provide a clear growth opportunity.
We have seen hard seltzers hit the UK market in the past two years, but not with quite the bang we might have expected, given their popularity in the US. There is no doubt we are seeing growth of hard seltzers, however their share of RTDs remains small at 3.6% (FY 2021). Their popularity in the US could be down to nicer weather or the fact they are on tap in on-trade venues, but ultimately the UK shopper is not as in tune with the benefits of hard seltzers, and this summer will be make or break.
Shoppers in the flavoured categories tend to follow the trends and, while flavoured cider and gin were popular a couple of years ago, both these sectors witnessed a value decline of around 20% this year as excitement burst. If you are looking for where these flavoured shoppers are heading now, the trend currently lies with vodka, flavoured/spiced rum and cocktails. So expect to see flavour innovation continue to hit the shelves this summer in the form of vodka and cocktails.