Industry authorities share with Lucy Britner their thoughts on what the big issues are likely to be for the year ahead
INDUSTRY – MILES BEALE, CHIEF EXECUTIVE, WINE & SPIRIT TRADE ASSOCIATION
What looms largest is the possibility of a general election. The first quarter of this year will involve a lot of campaigning in advance of the spring Budget. That’s certainly the last chance to keep the easement for wine at 11.5-14.5% abv. I think it’s vital that it is made permanent.
A lot of people will be looking ahead to see what the Labour Party would be likely to do if it got into government. We’ll be talking a lot about keeping taxes low, making sure administration and bureaucracy generally for businesses in our industry is as low as possible. And we’ll be getting to know all of the future combinations of government. A huge amount of our time in 2024 will be spent talking to politicians.
We’re also going to start doing some more work around exports again. We’ll talk to politicians about what this industry needs to grow, including support for exports. In terms of environment, we’re looking out for madcap schemes – Scotland’s Deposit Return Scheme was not sensible. We want something that works across the UK. We’re in on the ground floor with the government while they are preparing, in terms of extended producer responsibility schemes. There is going to be a change of government so I’m pretty sceptical about how many things will happen before a general election. But after it, whichever government is in place, they will pursue this. We want a proper outcome – a UK-wide scheme, with a sensible timetable.
We also want to encourage more conversations when it comes to sustainability. The industry needs to talk much more openly as no one has all the answers. We’re also looking at health and responsibility. The easiest way to describe it is if you have an incoming government and they say to the drinks industry: ‘What have you been doing to be increasingly responsible over the last five years?’ It will be quite difficult to answer that question. Covid removed the momentum for that kind of conversation because we had other things to worry about, but I think as an industry we have a self-regulatory model, and we need to think about how to support that properly. We’ve done a lot with community alcohol partnerships and we aim to deliver more. We also need to think more about how low and no products fit into that agenda, for example.
I think 2024 is going to be the year the industry gets the band back together. I feel we’ve been divided for some time but there need to be conversations around what responsibility looks like, environmental challenges, duty, and what we want to achieve. None of those things should pit one product or area of the trade against another. We need to have supportive, industry-wide conversations.
CONSUMERS – JO LYNCH, ACCOUNT DIRECTOR, KAM INSIGHT
It’s fair to say 2023 was another challenging year for all areas of our sector – both on and off-trade – with consumers seeing pressure on their spending due to inflation impacting food and drink pricing, energy pricing and rising interest rates, among other factors.
In 2024 we certainly expect to see more consumers lean towards the low and no category, which is becoming more prevalent as time goes by. In May 2023 we re-ran research in conjunction with Lucky Saint, which surveyed adults aged 18 and over, and it showed that 77% of UK adults had started to moderate their alcohol intake, and that the expanding options for the low and no category (not just beer, but now a large range of spirits, RTDs and other options) were welcomed by consumers. And certainly, our research showed that it’s not a case of low or no, but low and no.
People are still consuming alcohol, but consuming low and no products too when drinking at home, or in a venue. This category is particularly relevant to Gen Z (those aged 18-27), who moderate far more than older generations, and are more switched on to the options available to them. This was confirmed in our recent research of this specific age group.
Outside of (but also alongside) low and no options, quality is going to remain important, with premiumisation being key. Mainstream is now not the mainstay of the UK household, so encouraging the consumer to upgrade their at-home (and in-venue) experience will be key to drink brands’ success.
SUSTAINABILITY – REBECCA MURPHY, SUSTAINABILITY MANAGER, NORTH SOUTH WINES
We can feel the momentum in the trade when it comes to sustainability, and I don’t see it slowing in 2024. Data collection and calculating accurate carbon footprints for businesses will be key topics. We will need to collaborate and ensure this doesn’t become cumbersome for our suppliers as it’s so important for us as an industry. Making data available to retailers on packaging and communicating the carbon footprint of products will be essential.
I also see a move towards more environmentally focused products with regards to packaging. This could be achieved by supporting the Sustainable Wine Roundtable Bottle Weight Accord, which proposes moving from the current average weight of 550g to 420g by 2026, or by exploring alternative packaging formats. The environmental advantages of bulk shipping were discussed at length at the World Bulk Wine Exhibition in 2023. I see this being a key trend moving forward. It both improves the environmental impact and provides opportunities to package wines in alternative formats not available at source.
For North South Wines, we would love to see the growth of B Corps following our certification in April 2023. The complexity of sustainability certifications within the wine trade is confusing and difficult to articulate to the consumer. The Sustainable Wine Roundtable is working on the global reference standard to benchmark sustainability certifications in the wine sector, which will help suppliers and retailers better understand the scope of different certifications.
As an industry, we need to communicate sustainable progress to consumers in a way they understand. I see this as a key discussion point in 2024 and hope we can make some headway. For us, B Corp is growing in brand recognition in the UK, and we are promoting and working with our wineries to consider this certification alongside any they already have.