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Consumer confidence in finances is improving finds IWSR

Published:  13 April, 2023

The latest findings from IWSR Drinks Market Analysis, the global beverage alcohol data and insights specialist, show that although stated alcohol spend is falling in many markets, consumer confidence about finances and the future is trending more positively than in 2022. This is especially true of the UK, where consumers show signs of improved sentiment following lows in late 2022.

“To allay the impact of the cost-of-living crisis, beverage alcohol consumers are becoming more selective in how and when they spend on alcohol,” said Richard Halstead, COO of consumer insights, IWSR Drinks Market Analysis. “After the pandemic, at-home drinking is still preferred, but there is a strong motivation to go out, just with less frequency and more mindfulness in alcohol consumption and spending,” he added.

Consumers are cutting back on their alcohol expenditure as their spend on necessities like meat, fish, poultry and cleaning products increases. This trend is most pronounced in the UK, where inflation has been rising at double-digit rates, but is also notable in Germany and Australia. In these countries, as well as in France and Canada, where there are also moderation or financial pressures, deciding not to buy alcohol was found to be the second most popular strategy for saving money.

“Younger adult drinkers are particularly worried about their finances but more likely to be planning changes in their lives. Boomers have a lot more confidence because of their financial security,” said Halstead. “As a result, many UK consumers are choosing to watch costs and moderate their alcohol consumption,” he added.

Meanwhile, premium consumption behaviour continues in many markets but is growing at a more moderate rate than previously. Premiumisation for certain categories is strongest in markets where more positive general sentiment prevails, such as stated Champagne spend in China, and stated spend for tequila/mezcal in the US and Mexico.

However, it’s a different story in the UK where premiumisation is slowing down.

Younger LDA age groups are driving an up-trade for gin, bitters and high-volume drinks categories such as wine, RTDs and beer. This has led to an increase in stated spend for vodka, which is largely driven by younger LDA consumers turning away from more expensive spirits.

The premiumisation trend has been further halted by positive sentiment towards the idea of moderation, with many consumers choosing to drink better quality less often, rather than having to down-trade. 

Relying on promotions is the top money-saving strategy, enabling consumers to still stick with their preferred brand or drink type.

“While the vast majority of UK drinkers still go out, they do so less often and are more mindful of how much they spend,” said Halstead.

These findings were collated by IWSR’s consumer barometer price sensitivity tracking (based on consumer surveys conducted in February 2023) across 17 key markets of Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, Mexico, Netherlands, Poland, South Africa, Spain, Taiwan, the UK and the US.