Alcohol worth £16 billion is UK’s leading FMCG category – IRI’s launches Top Categories 2017 report

Bottled mineral water outsells colas for the first time in the UK

Bracknell, IRI; 4 April 2018 – Innovation in the drinks sector and a reduction in the amount of trade promotions has seen Alcohol retain its place as the top selling FMCG category in the UK, worth £16.1 billion (€18.2 billion) in value sales to the economy. This is according to big data and technology expert for consumer industries, IRI’s Top Categories special report – an analysis of the top selling FMCG categories in 2017 across the UK and other European countries (France, Germany, Italy, Spain and the Netherlands).

Posting growth of 4.4% year on year (yoy) last year, Alcohol outsold its nearest rival, Ambient Food, by £660 million (€700 million), with Chilled & Fresh Food worth £13.5 billion (€15.2 billion) in third place, and Drinks and Personal Care taking fourth and fifth places – worth £8 billion and £6.1 billion (€9.1 billion and €7.2 billion) respectively. Alcohol sales in the UK grew more than in any other country, however total sector value grew strongly across all countries, worth €62 billion, +2.6% yoy.

Beer was the leading growth sub-category in terms of absolute value growth year on year in five of the six countries measured. Premiumisation of beers, especially craft beers, which have gained shelf space within key retailers, helped drive sales in most countries, especially the UK (+6% yoy).

Sparkling wine was the fastest-moving sub-category in the UK with +10% growth, while Spirits saw +5% growth. Gin was the star performer in 2017, seeing a saw strong upturn in fortunes, including double digit growth in the UK (+24% yoy).

“Reduced levels of trade promotions, coupled with shallower price cuts, have played a part in bolstering topline macro category performances in the UK, Alcohol included,” comments Olly Abotorabi, Senior Regional Insights Manager at IRI. “It’s no surprise that we’ve seen strong growth in this category, and particularly in Beer, where brands are moving towards premiumisation, delivering innovation via new flavours, and offering beers and ciders with crafty credentials. In Spirits, Gin is also proving popular, driven by a growing number of small and niche batch distillers, celebrity culture and enhanced in-store exposure via displays during key seasonal events. But price increases have hit home with UK consumers who are being much more selective in what they buy and where they shop.”

Other key trends:

  • Growth in Snacks – boosted by consumers’ increasingly busy lifestyles and preference for eating on the go, snacks were a key driver within the Ambient Food category in 2017. Overall, Ambient was worth €96 billion across Europe and grew by +1.4% on average, with the UK posting nearly a fifth of all sales – £15.5 billion (€17.5 billion) in value, up +0.5% yoy. Local market growth was largely influenced by savoury snacks, including crisps, nuts, popcorn and instant hot snacks.
  • Bottled Mineral Water – outsold colas for the first time in the UK. Concerns about high sugar content linked to health issues like obesity and diabetes are playing an influential role, as well as the success of premium sparkling waters. The decline in fizzy drink sales could be compounded further in the UK with the introduction of a soft drinks tax this month.
  • Frozen Food – performed strongly, posting value growth of +3.3% yoy ahead of the total market. Ice Cream, the biggest single frozen category, increased value in 2017, benefitting from the warmer weather in the early part of the year. Frozen meat also grew in value and share due to shoppers switching away from fresh meat.

Abotorabi adds: “Rising food prices and shoppers trading up within private label play a part, however, underlying volumes are up (+0.7% yoy) as consumers increasingly see frozen food as a way to reduce waste and save money. We’ve seen the growth of frozen ready meals and frozen vegetable protein in particular, reflecting changing eating habits. Key retailers have consequently expanded freezer space, allowing them to offer more variety and meet evolving shopper missions.”

Notes for editors:
IRI Top Categories 2017 in Europe (combining macro category data across 6 countries): https://www.iriworldwide.com/IRI/media/IRI-Clients/International/Top-Categories-Special-Report-2018.pdf

Rank Macro Category €MAT (in billions) YoY%
1 Chilled and Fresh €102.9bn 4.0%
2 Ambient €95.9bn 1.3%
3  Alcohol €62.2bn 2.6%
4 Drinks €44.0bn 2.1%
5 Personal Care €36.5bn -0.5%
6 Household €29.3bn -0.5%
7 Frozen €25.6bn 3.8%
8 Confectionery €20.1bn 1.4%
9 Pet €8.7bn 0.8%
10 Baby €6.9bn -3.7

About IRI:
IRI is a leading provider of big data, predictive analytics and forward-looking insights that help FMCG, OTC health care, retailers and media companies to grow. With the largest repository of purchase, media, social, causal and loyalty data, all integrated on an on-demand cloud-based technology platform, IRI guides over 5,000 clients globally in their quests to remain relentlessly relevant, capture market share, connect with consumers and deliver growth. www.IRIworldwide.comFollow IRI on Twitter.

  • Source: IRI InfoScan
  • €MAT value sales and change YoY%, October 2017.
  • Market Coverage
    • UK: Hypermarkets, supermarkets, convenience, specialist, petrol forecourts, independents
    • France: Hypermarkets and supermarkets
    • Germany: Hypermarkets, supermarkets, soft and hard discounters, petrol forecourts
    • Italy: Hypermarkets, supermarkets, small supermarkets
    • Spain: Hypermarkets, supermarkets
    • Netherlands: Supermarkets, hard discounters

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