Cormac Healy, director of Drinks Ireland, talks to Maev Martin about how the drinks industry is likely to perform in the lead into Christmas 2022
While restrictions eased somewhat in the second half of 2021, Cormac Healy says it is important to note that the industry was still heavily impacted by COVID-19 last year.
“Generally, we saw a move away from the hospitality sector due to mandated closures and restrictions, so more people drank at home and overall consumption declined,” he says.
“This impacted all drinks categories, but beer and cider were hit hardest, due to their popularity in the on- trade in normal times. Prior to COVID-19, just over 60% of beer sales were in Ireland’s pubs, restaurants, and hotels. However, in the second half of the year, and in the lead up to Christmas last year, the recovery began in the beer and cider categories as venues reopened.”
Wine sales increased in in the first half of 2021, but they decreased in the second half of the year as consumers moved back to hospitality venues, and sales were down by 13% overall in the year as a result.
The spirits category remained resilient and domestic sales rebounded as hospitality venues reopened in the second half of the year, up by 8% to 2.55 million litres sold.
“This year, we anticipate a continued return to ‘normal’ when it comes to the split of sales between the on- and off- trade,” he says.
Given that inflation is a much bigger issue this year than last year, is it likely to have a big impact on consumer purchasing habits this Christmas?
“It is hard to predict the impact at this stage, but as with all food and drinks products, we expect there to be some impact,” says Healy.
“However, broadly, the big shift towards quality over quantity will continue. Given the current circumstances, for some consumers this may mean drinking ‘less’ but ‘better’.”
While the drinks industry was in a state of flux for Christmas 2021, which impacted all categories, there are some general trends that Drinks Ireland expects to see again this year.
Beer sales can be seasonal – stouts and ales are often more preferred in winter.
Mulled Irish cider and hot Irish brandy are great Christmas drinks for cider consumers.
White wine is the most popular wine in Ireland, with a 48% market share, with red wine holding a 45% share. But in winter and the lead up to Christmas, red wines are often preferred. Predictably, mulled wine is also popular at this time.
Looking at the spirits category, while popular now all year round, Irish Cream sales invariably increase in the lead up to Christmas, as would be expected.
Other Irish spirits like Irish whiskey and Irish gin tend to remain popular, but consumers will often opt for hot toddies or more festive cocktails featuring spices.
Poitin, for example, is increasingly seen as a different, more edgy ingredient for the traditional Irish coffee.
Low And No Alcohol
The quality of low and no alcohol options has increased across most segments of the Irish drinks industry in recent years. “As a result, we are seeing increasing levels of uptake, particularly when it comes to beer and low/no alcohol spirits,” says Healy.
“The growth in the no and low alcohol segment in Ireland was driven at the outset by the no and low alcohol beers in the Irish market and the fantastic innovation by brewers.
Non-alcoholic beer’s market share grew from 1.1% in 2020 to 1.5% in 2021.
For context, non- alcoholic beer’s market share was 0.4% in 2017.
However, other segments are certainly following suit, and this trend is set to continue across the board. Sales of non-alcoholic cider and low/no alcoholic spirits both grew substantially in 2021.
While the no/low category has grown very quickly, this was from a low base, particularly for cider and spirits, so there is huge room for growth across the board, and we look forward to seeing how producers continue to respond.
The low/no wine segment is yet to emerge but, again, that may follow, given the popularity of other segments.”
Ready To Drink
The Ready to Drink (RTD) category, which includes hard seltzers, has continued to emerge in Ireland, mirroring the global trend.
Last year, sales of cocktails and long drinks in Ireland grew by 60%, while hard seltzers were up by 46%, and flavoured alcoholic beverages rose by 27%.
“A number of local producers have entered the RTD market, which is great to see, with sales of Irish RTD brands up by 7.4% between 2020 and 2021,” says Healy.
“While RTD brands are very popular in summer, these drinks do well all year round, and we may very well see producers respond with seasonal products for Christmas 2022.”
Premium Irish Whiskeys – The Popular Christmas Gift
In recent years, Irish whiskey, particularly premium Irish whiskeys, have become increasingly popular as Christmas gifts. “We expect this trend to continue for Christmas 2022, supported by the launch of new premium expressions,” says William Lavelle, director of the Irish Whiskey Association.
“We think Christmas 2022 will continue to see gifting of premium Irish whiskey.”
According to Lavelle, the depth and diversity of the Irish whiskey category means there are no shortage of high-quality expressions on offer at every price-point.
“You don’t need to ‘break the bank’ to buy a great Irish whiskey, but equally there’s also many super-premium and ultra-premium offerings for those who do want to spend more,” he says.
The IWA expects to see increased consumer interest in new expressions, from both established and newer brands, for Christmas 2022.
“If consumers are looking for something different, be it a new expression from their region or county, or the latest cask-finish, then they won’t be disappointed by the range of exciting Irish whiskeys on offer this Christmas,” says Lavelle.
Recent research has indicated conflicting behaviours among Irish consumers when it comes to alcohol consumption – there is still a lot of binge drinking, but overall alcohol consumption levels are down.
“As always, the Irish Whiskey Association urges responsible drinking this Christmas,” he says.
“This is already happening as consumers are clearly drinking less, but they are drinking better quality products. The rise in sales of higher-priced Irish whiskeys by consumer across-the- board is testament to this.”
Checkout – your source for the latest Irish retail news. Article by Maev Martin. For more A-brand news, click here. Click subscribe to sign up for the Checkout print edition.