Marika Pratico, NIQ consulting & insights lead, shares the learnings from her organisation’s recent roundtable looking into the evolving consumption landscape
As consumer behaviours evolve, the drinks industry faces a pivotal moment. Questions around the blurring of lines between alcoholic and non-alcoholic drinks are very much top of mind. At NIQ we recently hosted a moderation roundtable where industry leaders gathered to explore the shifting landscape of alcohol consumption, the rise of moderation and the commercial implications for brands and retailers. So what did we learn?
Moderation is mainstream
Over half of UK consumers are actively moderating their alcohol intake. This might not be surprising, but it’s clear from our research that the trend is being driven primarily by health and wellness rather than cost as consumers are willing to pay for quality options. The trend is particularly pronounced among younger demographics, who are drinking less frequently and exploring alternatives that better align with their values and lifestyles.
The decline of alcohol engagement
Alcoholic beverage sales are stagnating, especially in the off-trade, where value is down 1% year on year. Beer and spirits are the biggest losers, while ready-to-drink (RTD) and low & no alcohol options are showing resilience and growth. Younger shoppers are driving this shift, with social media trends and wellness culture influencing their choices. That said, £2 in every £3 spent on drinks in the off-trade is still spent on alcoholic options.
Reduction vs replacement
The moderation movement is not just about drinking less, it’s about replacing alcohol with other alternatives. Our data shows that 70% of lost BWS spend in the off-trade is redirected to other drinks categories, including soft drinks, functional beverages and adult softs. Only 19% of the ‘replaced’ spend is retained within BWS through low & no and RTD formats.
Low & no: A familiar alternative
Low & no alcohol products are gaining traction by offering familiar brands with reduced or zero alcohol. Consumers appreciate the trust and quality associated with established brands offering low & no variants. Interestingly, Dry January is not the peak period for this segment – social occasions like Christmas and summer are more influential. These products should be pushed all year round, not just in January.
RTD: Convenience over moderation
RTDs are booming and shoppers are willing to experiment with new products (over the past year they have accounted for £17.50 of every £100 spent in the category). However, many RTDs have high abvs, raising questions about their role in moderation. Consumers are drawn to RTDs for their convenience, packaging and flavour innovation, rather than as a deliberate moderation choice.
Functional drinks: The emerging frontier
Functional beverages, those offering benefits like gut health, mental clarity or natural energy are growing rapidly, especially in the off-trade. While still niche, they appeal to health-conscious consumers and command premium pricing. However, confusion around shelf placement and category definitions remains a barrier to growth. More work needs to be done here as placement is key.
Category blurring and shopper confusion
New product development is blurring traditional category lines. Mocktails, kombucha and adult soft drinks challenge existing definitions, making it harder for shoppers to navigate shelves. Clearer segmentation and strategic placement will be critical to unlocking growth.
What’s next?
The moderation trend is here to stay, and alcohol engagement has fallen, driven by the younger generation. Retaining relevance in the face of replaced alcoholic drinking occasions will be critical to inspire shoppers to (re)- engage with the liquor industry. Is your brand portfolio ready to embrace the generational shift?
