Summary

As of 2020, the global beer market has been confronting mixed trends. Despite a projected growth from an estimated value of $593 billion in 2017 to $646.24 billion in 2025, with a CAGR of 1.8%, the industry is being reshaped by factors such as premiumization, health consciousness, and evolving consumer preferences. In the UK, beer holds a significant position, being the second most consumed alcoholic beverage after wine. However, British beer consumption has shown a decline, with total annual beer sales dropping 20% from 2006 to 2019. The craft beer segment has shown promise, with a growing interest from consumers in trial and sophistication, leading to a CAGR of 14.2% in on-trade sales volume between 2015 and 2019. Despite the adverse effects of the COVID-19 pandemic on the industry, with a significant decrease in sales during lockdowns, the market has seen resilience in off-trade sales. Trade analysis reveals that the UK imports slightly more beer than it exports, with a coverage rate of 96%, indicating a well-balanced trade scenario. The UK's production levels remain stable, ranking as the 9th largest beer producer globally in 2019, and the domestic industry employs a significant number of individuals, particularly in the hospitality sector. Overall, the market dynamics are influenced by a combination of traditional consumption patterns and new trends like premiumization, health awareness, and a robust craft beer movement..Shifting Tides in the UK Beer Market: A Focus on Health, Premiumization, and Craft Evolution The UK beer market has been undergoing significant changes reflecting a shift in consumer preferences towards health consciousness, premium quality, and diversity in taste. Despite the historical dominance of well-recognized brands like Carlsberg, Corona, and Heineken, and the preeminence of Guinness in the UK, the market has been evolving. Traditional beer consumption is decreasing overall, with an average Brit consuming between 60 and 80 liters of beer annually in recent years, a decline from previous levels. However, the market for beer in the UK is far from stagnant. It is reshaping itself, as exemplified by the surge in craft beer popularity. The demand for various beer types such as white, blond, red or amber, and dark beers is diversifying, and UK consumers are becoming more adventurous, with roughly 80 to 90 percent open to trying new and innovative beer flavors. The craft beer sector, which experienced significant growth with on-trade sales volumes increasing annually by over 10 percent from 2015 to 2019, demonstrates the shifting consumption dynamics. Consumer spending habits have revealed an interesting pattern of premiumization, where individuals are opting to spend more on lesser quantities. Craft beer has been a primary beneficiary of this trend, drawing in approximately 5 to 10 million drinkers in the UK, testament to the sector's rising allure. The premiumization movement is illustrated by the escalation in beer sales value, which, despite a decline in volume, saw consumer spending on beer in the UK reach nearly GBP 5 to 6 billion. Health trends have also left an indelible mark on the UK beer market. Driven by a general decline in alcohol consumption, sales of low or non-alcoholic beer saw a substantial increase of around 50 to 70 percent within a couple of years. The quest for healthier options has not compromised taste, as consumers expect alcohol-free beers to offer a flavor experience comparable to their alcoholic counterparts. Another notable trend is the factor of convenience, with nearly half of younger drinkers preferring chilled beers. A packaging shift towards cans, now encompassing over 70 percent of the beer sales, suggests a move towards more sustainable and recyclable options favored by consumers. From an industry perspective, the UK has remained steadfast as one of the top beer producers globally, ranked among the top ten with a stable output since 2012. Despite this, the number of breweries and related employment has hit a plateau due to market saturation and.### Key Market Players in the Global Beer Industry When discussing the beer industry, it is impossible to overlook the influence of some major international players that have shaped and continue to shape the global market. These titans of the brewing world not only dominate production and sales but also actively influence consumer trends and industry innovations. **AB InBev**: Formally known as Anheuser-Busch InBev, this Belgium-based company is a true giant in the beer market. The result of multiple mergers and acquisitions, AB InBev boasts a vast portfolio of over 500 beer brands, including well-known names like Budweiser, Corona, and Stella Artois. **Heineken**: Originating from The Netherlands, Heineken enjoys global recognition with its green bottles and red star logo. As one of the world's leading brewing companies, Heineken's international presence is strong, and it continues to grow through strategic investments and an expanding assortment of products that cater to a diverse consumer base. **CR Snow**: A name that might not be as familiar to Western drinkers, CR Snow is a key player in the Chinese market, which is a significant beer-consuming region. This company has gained a reputation for producing Snow beer, which has become the best-selling beer brand on the planet thanks to its massive popularity in China. **Scottish & Newcastle**: As the UK's largest and historically significant brewery, Scottish & Newcastle has maintained a strong presence through popular brands like Foster's. Its production sites in Manchester, Reading, and Tadcaster are a testament to the brewery's commitment to the UK market and its cultural heritage. **Craft Breweries**: The emergence of craft breweries is transforming the beer landscape by providing consumers with a plethora of niche and local options. These small, independent breweries pride themselves on creating unique flavors that appeal to consumers' growing taste for authenticity and quality over quantity. Craft beer's popularity is driving growth in the beer industry and underscoring a trend toward premiumization. **BrewDog**: Hailing from Scotland, BrewDog is a prime example of the craft beer revolution. With a strong emphasis on branding and a vast array of innovative brews, BrewDog has not only captured the hearts of UK beer aficionados but also made substantial inroads into international markets. These major players represent a diverse array of business models and strategies that underline the complexity of the global beer market. From multinational giants to local craft brewers, each has had a significant impact on the industry and continues to navigate the changing landscape of consumer preferences and market

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Summary and extracts

1 Market summary

1.1 Definition and scope of the study

Beer is mainly produced from barley malt with sometimes other cereals as a supplement. It is one of the most popular alcoholic beverages in the world.

Beer can be consumed in bottles, cans or through kegs. Among the most popular kind of beers we find:

  • White beers: brewed with wheat and pale malts.
  • Blond beers: brewed with pale barley malts.
  • Red beers or amber: brewed with more roasted barley malts.
  • Dark beers: brewed with extremely roasted brown malts.

The world beer market is dominated by some major international players (AbinBev, Heineken, CR Snow). The rest of the market is composed of a very large number of independent local actors. Going forward, the market is expected to expand as consumer spend more money on beer. Meanwhile, overall consumption is decreasing in general.

In 2017, the average Brit drank 69.5 liters of beer per year. [British Beer and Pub Association] Moreover, in 2018 the average household spent £8.70 per week on beer at home, and £8.00 per week on beer outside of home. [drinkaware] Finally, beer remains the second choice of alcoholic beverage after wine, although its market share has decreased over the past years.

Widely recognized brands include Carlsberg, Corona, Heineken, Bud Light, and Budweiser. Guinness is the most popular brand in the UK, followed by Budweiser, Heineken, San Miguel, and Stella Artois. However the preference varies depending on the source. Overall, AB InBev (Belgium) and Heineken (The Netherlands) dominate beer production both globally and in the UK. 

Alcohol consumption is on the decline, especially amongst younger generations; however, recent years have demonstrated consumer preferences for premium brands and more niched products. The global craft beer market is expected to grow at a CAGR of 8% from 2015 to 2025. Indeed, the craft beer market is going to help the market grow going forward. 

1.2 The global market is expanding

Beer market size World, ****-****, in $US billion Source: ****

In **** the global beer market size was estimated to be $US *** billion. It is expected to grow at a CAGR of *.*% to reach $***.** billion in ****. 

This growth is fuelled by many factors, including premiuimization where consumers around the world increasingly have higher ...

1.3 Beer remains an integral beverage in the UK

Recorded alcohol per capita (***) by type of alcoholic beverage United Kingdom, ****, in % Source: ****

In ****, some **% of alcohol consumption (***) in the UK was beer. This category was the second largest, closely behind wine.

The UK's consumption in Europe remains relatively low however. In ****, the UK had only the **th highest per capita ...

1.4 International Trade

This section analyses the UK's trade of beer. In particular, data is extracted from UN Comtrade's product category "****-Beer made from malt".

Trade of malt beer United Kingdom, ****-****, in $US million and in % Source: ****

The UK imports more beer than it exports. In ****, the island nation imported $US *.** billions worth, ...

2 Demand analysis

2.1 Beer consumption in the United Kingdom

  Total alcohol consumption over the long-run World, ****-****, in liters of pure alcohol per person per year. Source: ourworldindata Total alcohol consumption in the UK has been decreasing since ****. Between then and ****, the average liters of alcohol consumed per person decreased from *.* to *.* (***). Today, levels are above those of for example ...

2.2 Profile Analysis: The British Consumer

Most popular beer categories United Kingdom, ****, in % Source: SIBA In ****, a survey revealed that the most popular choice of beer in the UK was lager. Around **% of respondents identified with this category. Lager comes in first place far ahead of IPA (***) which was the second most popular category. The prevalence of ...

2.3 Demand trends

Beer drinkers in the UK are becoming increasingly sophisticated, demanding and conscious. Beer, which no longer means the same to everyone, is increasingly being consumed in a similar fashion to that of wine where flavours, scents, and origin are integral. Moreover, aspects such as health, environment, and local production are also ...

2.4 Focus: craft beer

Craft beer, also referred to as a micro brewery, are small and independent breweries. Often, these breweries pride themselves on local and niched flavours. The rise of craft beer consumption has helped contribute to the paradgim shift of beer from a homogenous product category to a sophisticated beverage with a vast ...

3 Market structure

3.1 The value chain of beer

Source: ****

Direct employment in the beer industry United States, ****, in number of employees Source: ****

The number of breweries in the UK increased steadily until ****, when the figure dropped. There is no direct explanation to why this is, but many claim that the industry has hit a cap on the expansion of ...

3.2 Production in the UK remains stable

Leading ** countries in worldwide beer production World, ****, in million hectoliters Source: ****

In ****, the number one beer producing country in the world was China, with a far superior production of almost *** million hectoliters. In second place we find the US (***). The UK was the world's *th largest producer.

These figures should be ...

3.3 Distribution

Distribution of beer is usually divided into two categories, namely on-trade and off-trade. On-trade refers to sales channels such as hotels, bars and restaurants, and off-trade means sales to food retailers like supermarkets, hypermarkets, etc. On-trade vs off-trade sales of beer United Kingdom, ****-****, in % Source: brewersofeurope In the UK, there ...

3.4 Taxes and duties

Tax revenues generated by beer United Kingdom, ****, in % Source: ****

In ****, taxes collected on beer amounted to €*.** billion. Excise duties (***) accounted for almost half of all tax revenue. In second place, we find that the VAT for the on-trade sector generated the highest revenue. This is related to the high number of ...

4 Analysis of the offer

4.1 Product Overview

The word beer is a generic term covering a drink with multiple realities. It is possible to classify it according to colour or fermentation.

The colour classification is the one used by consumers. The colour of the beer is a consequence of the choice of malt as well as the temperature ...

4.2 Price and cost analysis

Consumer Price Index (***) for Beer United Kingdom, ****-**** (***), in index value Source: ****

The CPI (***) measures the evolution in prices for a basket of goods. In this case, we analyse beer. 

As can be seen in the graph above, the index has been increasing stedaily, meaning prices in the UK have increased, ...

4.3 Supply Trends

In section *.* we highlighted the fact that consumers have increased their appetite for craft beers.

This evolution has been facilitated and fed by the supply side, where the number of microbreweries in the UK have increased rapidly over the course of the last five years. As the graph below shows, an ...

5 Rules and regulations

5.1 Regulation

In the UK, general beer regulation is covered in the following law:

The Beers Regulation **** which lays down conditions governing the brewing, production, importation and warehousing of beer and the method of securing and collecting the excise duty payable on such beer. 

In particular, duties on beer is covered in a ...

6 Positioning of the actors

6.1 Segmentation

  • Budweiser
  • Heineken UK
  • Corona (AB InBev)
  • Scottish & Newcastle (Heineken UK)
  • Diageo

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Latest news

Diageo no longer relies on LVMH to win over the French - 25/11/2023
  • Diageo (Johnnie Walker, J&B, Smirnoff, Tanqueray, Bailey's, Casamigas...), the world's leading spirits company, has set up its own distribution subsidiary in France
  • Diageo is a 34% shareholder in Moët Hennessy.
  • Diageo entrusted the distribution of its spirits to MHD (Moët Hennessy Diageo) in 1998.
  • from March 1, the new Diageo subsidiary will take over direct marketing of almost all its brands.
  • Diageo believes that its portfolio has been too slow to move upmarket in France.
  • The group is counting on its development in out-of-home channels (bars, hotels, restaurants, nightclubs, etc.), also known as "on trade", which accounts for only 20% to 30% of Diageo's sales in France
  • Diageo plans to increase its market share in France from 7.9% to 10% within three years.
  • Diageo ranks third in the French market behind Pernod-Ricard and La Martiniquaise.
  • Diageo plans to expand its global footprint in the general alcoholic beverage market to 6% by 2030, up from 4% today.
  • MHD will continue to distribute the Moët Hennessy portfolio as well as some of Diageo's most iconic brands in the French market.
  • A competitor, Beam Suntory, will take over distribution of Campari brands in France from January.
Diageo regains control of its premium spirits in France - 08/02/2024
  • Diageo, world leader in spirits, creates its subsidiary in France
  • Diageo takes over direct sales of the majority of the brands it has distributed since the 2000s via MHD (Moët Hennesssy Diageo) in France.
  • Only three of its brands are marketed via MHD in France: Johnny Walker, J & B, and Gordon's gin.
  • The UK's Diageo is present in France with a market share of 7.9%.
  • Diageo's total sales are 20.5 billion euros, two-thirds of which come from the premium spirits segment.
  • In this segment, its market share in France is just 3.6%.
  • The Group has a much higher market share in other countries: 47% in Greece, 24.4% in Spain and 13.7% in Italy.
  • The transfer of MHD (Moët Hennesssy Diageo) brands to the new Diageo subsidiary in France will begin in March 2024
  • Diageo plans to develop its tequila offer in particular, with the Don Julio brand.
  • Two exclusive distributors are planned for sales to wine merchants: Dugas for Tanqueray gin, Tekel One vodka and a range of pure malt whiskies; and La Maison du Whisky for Don Julio tequila.

Companies quoted in this study

This study contains a complete overview of the companies in the market, with the latest figures and news for each company. :

Budweiser
Heineken UK
Corona (AB InBev)
Scottish & Newcastle (Heineken UK)
Diageo

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The beer market | UK

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