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UK Beer Market – Consumer Behaviour Essay

At present, the wider availability of new technology such as home entertainment systems and broadband Internet connections is encouraging consumers to stay at home rather than go out to pubs or bars. Changes in consumer behaviour and in the retail environment are slowly challenging the pub’s position as the main outlet of beer and other alcoholic beverages. Several factors have combined to encourage this shift in consumer behaviour. The latest of these is the increasing affordability of state of the art home entertainments systems and their ensuing increased penetration.

These have contributed to making an evening at home an increasingly attractive offer, compared with the traditional expedition to the pub. This affects sales of beer in particular, more so than other alcoholic beverages. In the latest report (EMR-NAMNEWS, 9 June 2006), the total spending on at-home alcoholic drinks in the UK is forecast to grow by 15% from ? 10. 8bn in 2005 to ? 12. 3bn by 2010. Also, the marketing study indicated that consumption has elevated from 270. 1m litres of pure alcohol in 2005 to 294. 1m in 2010.

Comparing the data at the on-trade alcoholic drinks market, the forecast to grow is nailed at 10% in value over

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the same period, even though volume of consumption is declining. The figures indicate that the stability of the off-trade market volume relative to the on-trade is largely explained by the importance of the home for consumers and the levels of comfort and entertainment options consumers are integrating into their homes. Studying the overall UK beer market, supermarket discounts and consumers’ bulk buying have contributed heavily to this evolution.

This pricing trend has encouraged consumers to buy beer for home consumption rather than to drink in the much more expensive pubs and bars. At the moment, approximately 39% of beer sales are realized through the off-trade, compared with only 14% in 1982. However, the switch to supermarket shopping isn’t all bad news for pubs. Pubs have become less reliant on beer sales as consumers’ tastes become more diverse (MarketWatch: Drinks May 2004, p. 5). The idea of drinking at home, as analysed endow the consumers greater personal freedom and protection from the highly publicised binge-drinking culture, and drink-related violence and disorder.

Drinking at home also gives freedom to smoke or avoid smoking in the run-up to the imminent watershed of the UK-wide on-trade smoking ban in 2007 (EMR-NAMNEWS, 9 June 2006). With one of lowest consumption rates in Europe, the UK off-trade market offers further growth opportunities. Across the seven European countries surveyed by Datamonitor (Germany, France, Sweden, the Netherlands, Italy, the UK and Spain), Germany has the highest consumption rate, at an average of 10. 6 liters of pure alcohol per head compared with the European average of 6.8 liters. Spain has the lowest at-home consumption of any of the nations studied at 4. 6 liters.

EMR-NAMNEWS report also cited that although men are still the biggest consumers of alcoholic drinks at home, women have started to close the gap as women drinkers are having a significant impact on the volume of the off-trade. The reported predicted that by 2010 women drinkers will account for over 40% of the volume of the market and in many categories that are helping to underpin the growth in volume and value of alcoholic drinks.

In addition, the world market has signified a growing desire for “healthy” foods, one of the most important consumer trends. In the US, brewers have responded by extolling the virtues of reduced-calorie beers, as exemplified by Anheuser Busch’s Bud Light. Light beers appeal especially to women, who wish to control their waistlines, but lack the will to eliminate completely consumption of high calorie foods and beverages from their diet. The latest idea is to reinvent light beers as “low-carbohydrate” beers, as epitomised by Michelob Ultra.

However, Euromonitor (12 September 2005) expected this trend to lose momentum in the short term, with the low-carb niche showing signs of reaching its peak by the end of 2005. The sales of non-/low-alcohol beer have also benefited from the growing health consciousness of consumers. However, strong competition from soft drinks, especially from low-calorie variants, which are perceived as more fashionable, has limited potential for growth.

Other manufacturers have also attempted to exploit the growing sophistication of consumer health knowledge with the introduction of beers with functional ingredients. In September 2003, for example, Japanese brewer Sapporo introduced Namashibori Fiber, a happoshu beer with a high fibre content to promote digestion. In Germany meanwhile, Flensburger Brauerei Emil Petersen launched Flensburger Malz, a malt beer suitable for consumers suffering from diabetes, in 2004 (Nugent, 2006).

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