The UK alcohol ingredients market is evaluated at US$314.798 million for the year 2020 growing at a CAGR of 4.68% reaching the market size of US$433.636 million by the year 2027.
At current prices, the final consumption expenditure of households pertaining to alcoholic beverages was £ 21,551 million in 2019, increasing from the £ 21,278 million registered in 2018 and £ 19,806 million registered in 2017 [Source: OECD]. Further, household expenditure as a percentage of total household expenditure of the United Kingdom, during 2017-18, of alcoholic drinks (away from home) was in the order of 1.4%, which was the same during 2015-16 and 2016-17. Further household expenditure as a percentage of total household expenditure related to alcoholic drinks (brought home) during 2017-18 was 1.5% which was the same since 2013. Besides, the total value of UK manufacturers' product sales amounted to £396.6 billion in 2019, a decrease of 1.2% compared with £401.4 billion in 2018.
However, the largest increase in product sales was reportedly from whisky, which was reportedly up by £0.4 billion to £4.1 billion. Further, the total UK Manufacturers' Product Sales pertaining to distilling, rectifying, and blending of spirits accounted for £ 5,001 million, increasing from £ 4,633 registered in 2018 and £ 4,132 registered in 2017. Delving further into this industry, it is important to note that sales of Gin and Geneva (EXCLUDING alcohol duty) accounted for £ 6,47,011 thousand during 2019, which was an increase from £ 6,15,732 thousand registered during 2018, among others [Office for National Statistics, UK]. Also, as reported in September 2020, British passengers traveling to EU countries will be able to avail of duty-free shopping from January 2021, which reportedly implies that UK excise duty will no longer be due on alcohol and tobacco bought when leaving Great Britain.
Further, new inbound personal allowances will be applicable, allowing passengers to bring back with them 42 litres of beer [equates to three crates of 568ml (pint) cans; in the case of 330ml bottles of beer, it equates to 5 crates]; 18 litres of still wine (2 cases) and 4 litres of spirits or 9 litres of sparkling wine, fortified wine or any alcoholic beverage which are less than 22% ABV [Source: The Government of the United Kingdom]. Therefore, from the aforementioned market conditions, it can be conclusively discerned that the production of alcoholic beverages will be facilitated and is consequently poised to drive the UK alcohol ingredient market growth.
Besides UK alcohol consumption leading to 358,000 admissions to hospitals in 2018/19, which was 6% higher than 2017/18 and 19% higher than 2008/09 as reported in February 2020 [Source: United Kingdom National Health Service], restraint in the consumption of alcohol is expected. This development is expected to hamper the volume of sales. However, it is poised to be offset by the “less is more” preference, where consumers are increasingly keen on drinking less alcohol but aren’t willing to compromise on the quality. This suggests that consumers are expected to spend a little more on a reasonable volume of higher-quality alcoholic beverages. Also, with a growing preference for rustic taste imparted by the likes of Rhum Agricole, the trend for “something pure and fresh,” which is prevalent among aficionados, is expected to permeate all strata of consumers. Before all foregoing, the profusion of craft breweries is another development that, along with the aforesaid, is expected to drive the market for UK alcohol ingredients during the forecast period.
Impact of COVID-19
COVID-19 has caused the UK alcohol ingredients market due to rise and the economy to continue to hamper. As the supply chain was disrupted, shortages in spare parts supply and demand, as well as a lack of investment, have hindered expansion of the global during the Pandemic. However, things are gradually improving, which is encouraging market recovery. Exports and imports have been easier in recent months, and important competitors are releasing new products to the market that will help fuel market growth.
AB MAURI UK & Ireland (Associated British Foods plc)
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