Off-trade alcohol sales grew 1.9% to £15 billion in the past year (IRI, year to January 2015) and two-thirds of that goes through supermarkets.
But convenience is driving all the growth, with sales up 10.6% in volume and 8.7% in value in multiple convenience stores like Tesco express, Sainsbury’s Local and Little Waitrose. Sales in symbol groups like Spar are also up 5.9% in volume and 4.3% in value.
But supermarkets are failing to keep up, with value sales up 0.1% and volumes down 0.5%.
Toby Magill, head of alcohol at IRI, said: “Growth has come from convenience. Supermarkets deliver the scale, but high street convenience formats are driving the growth. Supermarkets are having a difficult time.
The rise of convenience multiples is helping the big grocers.
“There were 451 new convenience stores opening in the past year. That’s where the UK market is going and we see that increasing in the next few years. Convenience is increasingly important to BWS.
“Using historic growth rates we have tried to predict where the market will end up by 2020. We see continual growth.
“We think convenience will match supermarkets in terms of sector delivery. It’s important for manufacturers to have the right convenience strategy. We see the move away from big box stores into more convenient local retailers.”
Wine suffered volume declines but grew value 1.6% to £6.1 billion in the past year, while the spirits category was the star performer, with sales up 1.4% in volume and 2.9% in value to £3.8 billion. The lager, ale and cider category was up 1.5% in value to £4.8 billion.
Lager had a strong year, growing 1.9% by value, and Magill said that was to be expected, given it was a World Cup year and there was a lot of focus on promotions on lager. Ale was up 2.9%, driven by premium bottled ale.
But cider suffered a tough year, with value sales down 0.7% to £1.1 billion. “The World Cup hit cider in its traditional best performing month. In 2013 cider saw a huge July spike that wasn’t repeated in 2014.
“It wasn’t as hot and the big focus was on lager, with Budweiser the official World Cup sponsor. Sales dropped 15% and that caused the overall drop. That competition from lager isn’t going to happen again this year. We expect that to grow back in the next year when there is no World Cup.”
He added: “It’s not going to surprise anybody that fruit cider is still enjoying very strong growth. It was up 24.5%. The year before it was up 67.8%. 2013 was such a phenomenal year and you can’t expect that every year, but I don’t think anybody is going to complain about those figures.
“With all this focus on fruit we don’t want to forget about the heartland of cider, which is the traditional apple flavour.
“Apple cider sill delivers 67% of cider sales. Fruit is the entry point. It’s sweeter and appeals to a younger demographic. It’s not as challenging. People will move up to apple.
“Premium is the growth driver in cider. Westons is up £4.8 million in the past year, up 16%. Premium cider is up by £5.4 million.”