Sector Trend Analysis – Beer, wine and spirits in the European Union and United Kingdom

Overview

Generally speaking, wine, beer and spirits declined in Germany, France and the United Kingdom from 2017 to 2022. Wine and beer both experienced growth in Italy over this time period, while spirits have decreased slightly.

Consumption of alcoholic beverages was affected by the Covid-19 pandemic, primarily due to reductions in on-trade sales (i.e. restaurants, hotels and bars). On-sales have rebounded as restrictions eased, especially in Italy and the United Kingdom. However, younger consumers (i.e. Gen-Z) are losing interest in alcohol^{Footnote 1}. This is providing opportunities for low and no alcohol wine, beer and spirits, including products such as CBD-infused wine, which is sold in France.

Alcohol producers in Europe face external threats. For example, frosts in the Spring of 2021 destroyed many grape crops in France, such that wines from the 2021 vintage are less available. Glass shortages are affecting beer, wine and spirits manufacturers across Europe. The war in Ukraine is also impacting beer manufacturers, who rely on Ukrainian malt to brew beer^{Footnote 1}.

Premiumization is occurring in some, but not all markets. Premiumization has been observed for wine in Germany, beer in France and the United Kingdom, whiskey in the United Kingdom, rum in France, and gin in Germany^{Footnote 1}.

Each European market is unique, and as such this report presents information for beer, wine and spirits in four Western European nations, three of which are members of the EU. Beer is the most popular drink of choice in Germany and the United Kingdom, whereas wine predominates in Italy. Beer and wine are about equal in France, with a noted shift towards beer and away from wine. Each market has its particularities: dark beers are relatively popular in the United Kingdom, but marginal in Italy. Red wine outperforms white wine in France, but red and white are fairly equal in Germany and Italy, and white wine is more popular than red wine in the United Kingdom.

Domestic brands are popular across Europe, especially for beer and wine, but these domestic brands are not always owned by domestic companies. One notable exception to this trend is in the United Kingdom, where the three most popular beer brands are Carling (originally Canadian), Foster's (originally Australian) and Stella Artois (originally Belgian). Examples of domestic beer brands now owned by foreign multinationals include France's Kronenbourg (owned by Denmark's Carlsberg) and Italy's Peroni and Moretti (owned by Japan's Asahi and the Netherlands' Heineken, respectively). Spirits tend to feature more imported products than beer and wine, since certain kinds of spirits tend to be manufactured in very specific places (that is, cognac in France, Scotch in Scotland).

Wine, beer and spirits in Europe

Alcoholic beverages in Europe, by region and country

Alcoholic beverage consumption is flat in both Eastern and Western Europe. In France, Germany and the United Kingdom, alcoholic beverage consumption declined from 2017 to 2022, while it increased slightly in Italy. Growth is forecasted to continue in Italy. Slight growth is projected in France and the United Kingdom. German alcoholic beverage consumption is forecasted to decline. Eastern Europe is forecasted to drive alcoholic beverage consumption growth in Europe through 2027, with a CAGR twice that of Western Europe.

Wine in Europe, by region and country

Wine consumption is declining in Western Europe, with a large decline in France and slightly smaller declines in Germany and the United Kingdom. Wine consumption in Italy was flat from 2017 to 2022. Consumption increased slightly over the same period in Eastern Europe, which will also drive the consumption increase from 2022 to 2027. The decline is expected to reverse in Germany and the UK, but will continue in France.

Beer in Europe, by region and country

Beer is the leading alcoholic beverage consumed in Europe by volume, and this is especially the case in Eastern Europe, where it represented 79% of total alcohol consumed by volume in 2022. Consumption has been flat since 2017, increasing slightly in Western Europe and falling slightly in Eastern Europe. Consumption increased in France and Italy, and fell in Germany and the UK. Beer surpassed wine in France by 2022. It remains the most popular alcoholic beverage in both Germany and the UK, representing 78% and 62%, respectively, of all alcohol consumed in these countries by volume in 2022.

Spirits in Europe, by region and country

Consumption of spirits was flat in Western Europe between 2017 and 2022, and only slight growth is projected through 2027. Consumption increased in the United Kingdom and decreased in France, Germany and Italy. Through 2027, consumption is expected to continue to fall in France, while remaining flat in Germany and the United Kingdom and increasing in Italy.

Wine, beer and spirits in the United Kingdom

Wine in the United Kingdom

Wine consumption decreased slightly in the United Kingdom between 2017 and 2022. Red wine and white wine declined, while rosé consumption was flat. Non-alcoholic wine has been introduced into the market, but growth remains slow relative to non-alcoholic beer and wine.

The United Kingdom wine market is segmented, with only a slight trend towards more consolidation: companies outside of the top 10 accounted for 65.9% of the market in 2022, and brands outside of the top 10 accounted for 77.6% of the market in the same year. These are both down from 2017, but top companies and brands have not seen their market share significantly increase.

Beer in the United Kingdom

Beer remains the most popular alcoholic beverage in the United Kingdom by quantity, with nearly 4 times as much consumption as wine. Low- and no-alcohol beer has grown massively in popularity, with consumption more than doubling from 2017 to 2022. It is forecasted to drive growth through 2027.

The beer market is characterized by consolidated market shares. AB InBev controls more than 20% of the beer market in the United Kingdom, and the top three companies had a combined 58.1% market share in 2022. Brand shares are more segmented, with the top brand being Carling, owned by Molson Coors.

Spirits in the United Kingdom

Consumption of spirits increased in the United Kingdom from 2017 to 2022, driven by growth in white spirits (i.e. vodka and gin), liqueurs and rum. Whisky and brandy consumption decreased, while tequila and mescal consumption was marginal and experienced very little growth.

There is one major spirits company in the United Kingdom, Diageo, with a 30.4% market share in 2022. The rest of the market is fairly segmented: the next largest company (Pernod Ricard) has a 6.9% market share, and companies outside of the top 10 accounted for 39.3% of the market in 2022.

Wine, beer and spirits in France

Wine in France

Wine consumption decreased in France has declined over the last 5 years, and is forecasted to continue to decline. The greatest declines occurred for red wine and fortified wine/vermouth. White wine grew very slightly, at 0.4% CAGR. Non-grape wine and saké grew slightly, but remain very marginal relative to other kinds of wine. Non-alcoholic wine is increasing in popularity, with a projected 4.6% CAGR from 2022 to 2027.

The French wine market is highly segmented, although Castel Groupe has a large market share thanks to its numerous brands. Individual brands do not have significant market share, with over 90% of brands sold being outside of the top 10.

Beer in France

Stouts are not very popular in France, representing far less than 1% of the market in 2022. The majority of beer consumed was lager, although this category will include blonde and white beers. The beer market is fairly concentrated: Heineken and Carlsberg together accounted for 63.7% of the market in 2022, and AB InBev (which owns numerous small Belgian brands) held a further 15.3% of the market. Beer brands have consolidated in France. Brands outside the top 10 represented 33.1% of the market in 2022, down from 41.8% in 2017.

Spirits in France

Consumption of spirits decreased between 2017 and 2022 in France, with declines in whiskies, liqueurs, brandy and cognac, tequila and mescal, and other spirits. Consumption of white spirits, rum and non-alcoholic spirits all increased. A slight decrease in spirits consumption is projected through 2027, whiskies and other spirits experiencing the largest decreases.

France has two major spirits companies with large market shares, la Martiniquaise and Pernod Ricard. Together, these companies had a 48.6% market share in 2022. The next largest company, Diageo, had 6.2% market share. La Martiniquaise had five of the ten largest spirits brands in France in 2022, and Pernod Ricard had three of the ten largest brands, including Ricard pastis, the largest single spirts brand in France.

Wine, beer and spirits in Germany

Wine in Germany

Wine consumption decreased in Germany from 2017 to 2022, but is expected to rebound through 2027. Rosé, non-grape wines and non-alcoholic wine gained in popularity, while all other categories of wine decreased. These trends are expected to reverse through 2027. Rosé wine will decrease slightly through 2027, while consumption of all other categories of wine will increase.

The German wine market is very segmented, especially when it comes to brands. 78.8% of wine companies were outside of the top 10 companies in 2022, and 87.3% of brands were outside of the top 10 brands.

Beer in Germany

The most striking feature of the German beer market is the popularity of low and zero-alcohol beer. Over 11% of the beer sold in Germany in 2022 has low or no alcohol, a higher proportion than in any Western European country other than Sweden and Spain. Growth in low and no alcohol beer has slowed overall decline in the beer market Dark beer shrank by 3.0% from 2017 to 2022, and is forecasted to continue to shrink, along with lagers. Stouts are the only growing category for alcoholic beer, and they are marginal in the German beer market.

The German beer market has fairly high segmentation. Oetker Gruppe had an 11.4% market share in 2022. No other beer company had more than 10%, and companies outside of the top 10 represented 45.8% of the market. Brands outside of the top 10 represented 70.1% of the market in 2022, and the top 10 brands were manufactured by 9 companies, with only AB InBev having two brands inside the top 10.

Spirits in Germany

Consumption of spirits is flat in Germany, with only a slight decrease from 2017 to 2022, and a very slight projected increase from 2022 to 2027. White psirits and whiskies increased, whereas rum, brandy and cognac decreased.

The spirits market in Germany is highly segmented, but with a slight trend towards consolidation. In 2017, 60.6% of spirits companies were outside of the top 10. In 2022, this portion had fallen to 58.5%. Brands are highly segmented, with the largest brand in 2022 having a 3.5% market share.

Wine, beer and spirits in Italy

Wine in Italy

Wine consumption was flat in Italy between 2017 and 2022, and is projected to grow from 2022 to 2027. Red, white and rosé wine decreased slightly from 2017 to 2022, while sparkling wine grew significantly. Through 2027, all categories of wine in Italy are projected to grow. Red and white wine both have similar market shares, with white wine being slightly more popular. The gap between white wine and red wine should increase through 2027.

There are two wine companies with somewhat significant market share in Italy: Cantine Riunite & CIV SC Agr., which had a 7.5% market share in 2022, and the Cooperative Agricole Viti-Frutticoltori Italiani Riuniti Organizzati Scarl (CAVIRO), which had a 5.2% market share in 2022. Companies outside of the top 10 represented 80.2% of the market in 2022, and brands outside of the top 10 represented 90.0% of the market. Italian consumers have a preference for variety when consuming wine.

Beer in Italy

The vast majority of beer consumed in Italy is lager. In 2022, 91.4% of the beer consumed in Italy was lager. The leading beer brands sold in Italy, such as Peroni, Moretti, Heineken, Castello and Beck's are all lagers. Nonetheless, dark beers and stouts are projected to grow faster than the overall beer market through 2027.

The big three of the Italian beer market consists of Heineken, Asahi and Castello. Heineken and Asahi both own major Italian brands, with Asahi owning Peroni, Italy's most popular beer brand, and Heineken owning Moretti, the second most popular brands. Beer brands first developed in Germany or the Netherlands, such as Heineken lager and Beck's, are also quite popular.

Spirits in Italy

Consumption of spirits fell slightly in Italy from 2017 to 2022, but is forecasted to rebound through 2027. Spirits are not particularly popular in Italy, and this is particularly true for whiskies, brandy and cognac. Non-alcoholic spirits are quite marginal, and are projected to remain marginal through 2027. Consumption of all categories of alcoholic spirits is expected to grow through 2027, except for brandy and cognac, which will experience no growth.

The one major Italian spirits company is Davide Campari Milano, with 22.2% market share in 2022. Its most popular brands are Aperol and Campari, both of which are apéritifs that are popular in cocktails. Other important companies include Diageo, Pernod Ricard and Distilleria F.Lii Caffo. The Italian spirits market is segmented at the top, and brands outside of the top 10 accounted for 37.4% of spirits sold by volume in Italy in 2022.

Analysis of imports and exports

European Union imports and exports

Canada has a trade deficit with the European Union for beer, wine and spirits, with EU imports from Canada being only 6.8% of the size of EU exports to Canada. The leading import from Canada is grain alcohol (HS Code 2207), with spirits and liqueurs (HS Code 2208) representing the other significant import category. The leading spirits imported from Canada by the EU are whiskey (65% of 2208 imports by value in 2022), liqueurs and cordials (14% of imports by value), and vodka (10% of imports by value).

Wine is the leading alcohol export to Canada from the European Union, followed by spirits and liqueurs, and beer. The leading spirits and liqueurs imports are liqueurs and cordials (34% of 2208 imports by value in 2022), grape spirits such as cognac and grappa (24% of imports by value), and vodka (20% of imports by value).

United Kingdom imports and exports

Canadian exports to the United Kingdom are extremely small, at only $CAD 9.1 million. The most important United Kingdom imports from Canada were wine ($CAD 4.1 million in 2022) and whiskey ($CAD 1.8 million in 2022). The main United Kingdom exports to Canada are whiskies ($CAD 223.8 million in 2022), beer ($CAD 66.1 million in 2022) and gin ($CAD 40.5 million in 2022).

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Resources

• Euromonitor International, 2023
  • Passport statistics
  • Analysis including Wine in the United Kingdom, France, Germany and Italy, Beer in the United Kingdom, France, Germany and Italy, and Spirits in the United Kingdom, France, Germany and Italy (12 reports total, all from June 2023).
• Global Trade Tracker, 2023

Sector Trend Analysis – Beer, wine and spirits in the European Union and United Kingdom
Global Analysis Report

Prepared by: Alexandre Holm Perrault, Market Analyst

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