Drinks lead the way as economy revives

Strong sales growth has seen alcoholic drinks emerge as the best performing FMCG category of the past year – and the trend looks set to continue as retailers prepare for the World Cup and a summer heatwave.

BWS sales are up 3.9% in value and 2% in volume (IRI, year to April 26), putting it comfortably ahead of confectionery and soft drinks as the fastest-growing major FMCG category.

Grocery sales excluding alcoholic drinks are down 1.7% in volume and up 0.7% in value, and IRI analyst Tim Eales said BWS is propping up the rest of the market.

Tesco and Sainsbury’s both predict beer and cider sales will double during the next five weeks as World Cup fever grips the nation.

But as Britain’s thirst grows, retailers look set to pull out all the stops to carve out as large a chunk of the lucrative market as possible.

A World Cup price war has seen discounters and supermarkets slash the cost of multipacks of beer, with Asda selling 36 cans of Carling, Stella, Foster’s and Kronenbourg 1664 at £20, and Tesco selling 24 cans of Foster’s for £13, while Aldi was selling 12 bottles of Stella for £6.39 and 12 bottles of Carlsberg Export for £6.69.

Tesco BWS customer manager Natasha Pitman said: “The World Cup is the biggest sporting event on the planet and will create a month-long carnival- like atmosphere for millions of football fans at home.

“We know from previous tournaments that on days when England play demand for beer rockets and continues to rise with each successive round.”

Weathermen at the Met Office are predicting the hottest summer for years and – if they are right – that should see BWS sales soar.

During a heatwave last year cider was up 42% in volume, lager sales rose 28% and RTDs were up 24% (IRI, four weeks to July 13, 2013).

Consumers celebrated the sunshine with sparkling wine. Champagne sales climbed 20%, Prosecco rocketed 111% and other sparkling wine grew 5%, while white wine was up 15% and rosé grew 14%.

“The weather has a massive effect,” said Eales. “When the temperature passes 18°C we all go round the stores and round each other’s houses and get barbecues going and alcoholic drinks sales really benefit.”

Both retailers and suppliers are encouraged by the upturn in BWS after many years of hurt, and are increasingly bullish about the future.

Andy Sagar, managing director of Kingsland Wines & Spirits, said: “The UK economy is turning around. It’s the strongest in western Europe so there’s no reason we shouldn’t be confident.”

Phil Cave, wine category manager at Morrisons, said: “Wine has been acknowledged as a key category where we have an opportunity to grow sales. We are confident in the future of the category.”