It’s clear that next year will be another year of uncertainty for the off-trade. The recession seems likely to continue for the foreseeable future, putting financial pressure on manufacturers, retailers and consumers. But 2023 will also bring legislative changes that have an impact on businesses. 

Scotland will see the implementation of a deposit return scheme to cover single-use plastic, steel, aluminium and glass containers. Shoppers will be asked to pay 20p per container, which can be claimed back when the container is returned. The impact will differ between categories: 20p on a £20 bottle of gin feels minimal compared to 20p a can on a 15-pack of beer, which adds £3 to the price. It will be a huge logistical operation and pricing will need to be monitored closely. 

It remains to be seen if or how consumer behaviour changes – will they switch their drink of choice, or pack size, or leave the category all together? 

While the scheme involves a returnable deposit, the impact of so-called sticker shock on basket spend at a time when budgets are stretched will be likely to change the way people shop. Manufacturers will need to be agile to react, particularly in beer and cider, which are most at risk, given the importance of multipacks in those categories. 

The new alcohol duty system will be implemented across the UK at the start of August 2023. It will bring significant savings for products that are below 3.5% abv, so we can expect reformulations and innovations, especially within beer and cider. 

There is a consumer appetite for more moderate alcohol consumption, so there will also be growth below the 3.5% abv level. In spirits, products at less than 22% abv will carry lower duty, making categories such as liqueurs more attractive. There will also be commercial developments that businesses need to be alert to. 

DELIVERY OPPORTUNITIES 

Quick commerce – ecommerce geared around rapid, on-demand delivery – is an opportunity for BWS producers. With budgets stretched, consumers could replace meals out with takeaways at home, and there are big wins to be had for those that can tap into this, by understanding the path to purchase and how it differs from shopping in bricks-and-mortar or conventional online. 

Another major trend is the growing importance of the in-home drinking experience. The off-trade now has 3.6% more volume sales of alcohol than the equivalent period in 2019 (year-to-date, until September 10). Lockdowns meant more drinking occasions were enjoyed at home and many of those have clearly stuck. 

Google searches for cocktails saw a sharp rise at the beginning of the first lockdown in 2020 and this uplift has continued in the past couple of years as consumers make their own drinks at home. 

RTDs are capitalising on this trend to bring the cocktail experience into the home even more easily. We can expect this to continue next year with new products entering the category. Hard seltzers, despite a lot of publicity, will be under pressure to justify their listings as other RTD alternatives enter the market. 

And finally, 2023 could see in-home beer taps increase in popularity. The format is attracting a lot of attention and is a good way to add some theatre to the home-drinking experience.