BWS sales grew 5.7% over Christmas and drove the FMCG market to its best festive performance in four years (Nielsen, four weeks to December 31, 2016).

Only confectionary grew at a faster rate than alcoholic drinks, and the excellent December performance capped a strong year for the trade after BWS grew 0.2% in volume and 1.1% in value in the year to November 2016 (Nielsen). 

Retailers are bullish going into 2017 and the vast majority believe trading this year will be as good as in 2016, if not better, despite challenges such as Brexit and volatile exchange rates lingering on the horizon.

We surveyed hundreds of independent retailers, c-stores and head office staff at the multiples and found that 43% expect business to be better in 2017 than in 2016, which was clearly a good year for the trade.  

A further 44% anticipate trading will be the same, while just 13% expect it to be worse. 

Growth in 2017 will come from convenience stores, while star performers of recent years such as Prosecco and fruit cider could fade, according to Toby Magill, head of BWS insight at IRI. He said: “Prosecco will continue to grow, but rates will fall. We will also see retailers start to look for what is next in the sparkling wine market. The presence of the big beer manufacturers in cider will wane in 2017, as the sector shifts focus to brands with more heritage. I also expect a reduction in the number of fruit ciders as retailers realise they can stock a few star performers and save space on the rest.

“Craft will continue to be a dominant trend in BWS. However, its impact in terms of off-trade sales will be limited and its PR bark will be much bigger than its sales bite.”

Magill said there will be an increased focus on beer as manufacturers await the impact of Asahi’s arrival as a major player in the UK. He added: “Also as the major international brewers reduce their focus on cider, their attention will naturally drift back to their heartland of beer.

“In terms of the retail landscape we will continue to see the rise of convenience stores and online for BWS, and a general fragmenting of the retailer landscape as power continues to transfer to the shopper to get what they want, when they want it. 

“More and more it will be important for manufacturers and retailers to be able to flex their range by channel, retailer, time of year, macro and micro region to make sure they have the right products in the right place at the right time. The era of universal plans focusing on big box retailers is over.”

The biggest date on the horizon is March 8, when the chancellor will unleash his 2017 Budget, so some intense lobbying must take place, while Brexit is also getting the trade hot under the collar.

Brigid Simmonds, chief executive at the British Beer & Pub Association, said: “There is no doubt the year ahead will be dominated by Brexit. There are both opportunities and risks for our sector. We must make the case for light regulation and a favourable tax regime – something that is now more pressing than ever.”

Industry insiders expect premiumisation to continue apace this year. Gabe Cook, communications manager at the National Association of Cidermarkers, said: “Premiumisation shows no signs of abating in the cider market with a 15% rise in volumes over the past 12 months. I predict this will primarily take two forms. First, wine-style ciders, served in 75cl bottles and designed for sharing, will prove to be an increasingly popular alternative to wine. Watch out Prosecco. Secondly, the younger demographic, so ravenously keen on new trends, will be tempted by offerings that allude to the craft beer revolution. Cue pungently hopped and sour lactic ciders. This will also be the year when cider and food matching really takes off.”

Bosses of generic wine bodies are in buoyant mood too. Laura Jewell MW, head of UK market at Wine Australia, said: “The trend towards premium wine is my prediction, but not just for 2017 as this is a gradual, ongoing movement. Three potential trends – alternative varieties, sparkling red and the move to premium – demonstrate it’s a very exciting time for Australia. 

“Quality, diversity and innovation are the hallmarks of Australian wine and this is exactly what we’ll be showcasing at the Australia Day Tasting [in a fortnight].” 

The best performing country of origin in 2016 was New Zealand and Chris Stroud, European marketing manager at New Zealand Winegrowers, said: “New Zealand wine will continue to grow in popularity in 2017. We have lots planned to celebrate New Zealand Pinot Noir, beginning at our London annual trade tasting on January 16, where Pinot Noir will take centre stage.

“In general terms, the biggest challenge to the UK trade will be the fallout following Brexit and what will happen with currency fluctuations and inevitable price rises. However, we are confident New Zealand wine will be able to ride the storm and we look forward to maintaining a fruitful relationship with the UK – one of our strongest markets.”