Are UK Drinking Habits Shifting from Beer to Wine?

Are UK Drinking Habits Shifting From Beer to Wine?

Consumer habits in the United Kingdom are in constant flux, and the alcoholic beverage market is no exception. Recent decades have witnessed significant changes in what, where, and how much Britons drink. A particularly notable trend involves the apparent shift in preference between two mainstays: beer and wine. Understanding these evolving dynamics – the consumption trends, the factors driving them, and their impact on the industry – is crucial for businesses operating within this sector, from pubs and breweries to retailers and distributors.

UK Drinking Trends: A Changing Palate?

Analysis of consumption data reveals a complex picture of evolving tastes and behaviours within the UK alcohol market.

• Long-term data indicates a significant decline in traditional beer drinking. Figures suggest the average Briton now consumes roughly half the volume of beer compared to 50 years ago. While still a major category, its dominance has waned considerably over decades.
• Conversely, wine consumption has experienced a long-term upward trend. Increased availability, particularly through supermarkets, and shifts in social occasions have boosted its popularity. Data suggests the average Briton now consumes around 37 bottles of wine annually. Surveys indicate white wine is often cited as the most frequently consumed weekly drink, closely followed by lager and red wine.
• Despite significant innovation and marketing efforts, the overall market share for spirits has remained relatively stable over the long term, hovering around 24%, similar to levels seen in the 1980s.
• A major disruptive trend is the rapid growth of the low- and no-alcohol (NoLo) beverage sector. This category is significantly outperforming the overall alcoholic drinks market, which has seen declines in total volume. No-alcohol beer, in particular, has seen substantial growth, driven by health consciousness and product innovation. Low-alcohol options have also been boosted by recent changes to the UK’s excise duty regime.
• Overall per capita alcohol consumption in the UK has been generally declining since a peak in the mid-2000s, although it remains near the European average. This decline is particularly pronounced among younger generations (Gen Z and Millennials), while older age groups (e.g., 55-64) maintain higher consumption levels and are more likely to drink regularly. Around 20% of the UK population abstains from alcohol completely, a figure rising among the young.

This data paints a picture not just of a simple switch from beer to wine, but of a broader fragmentation and evolution of the market. The decades-long decline in beer consumption appears structural, linked partly to the decline of the traditional pub trade and the rise of alternative drinking occasions and locations. Wine successfully filled much of this gap, aided by its alignment with supermarket distribution channels and suitability for at-home consumption. However, the simultaneous explosion of the NoLo category and the resilience of spirits suggest consumers are diversifying their drinking repertoires rather than merely substituting one alcoholic drink for another.

Factors Driving the Change

A confluence of societal, economic, and market factors underpins the observed shifts in UK drinking habits.

• Health and Wellness: A growing focus on health is a primary driver. Consumers are increasingly aware of the health impacts of alcohol, leading many to moderate their intake or seek healthier alternatives. Weight management concerns also play a role. This trend directly fuels the demand for low- and no-alcohol products, with studies showing a significant portion of UK adults have actively reduced their alcohol consumption.
• Economic Pressures: The cost-of-living crisis and general economic uncertainty impact discretionary spending. This makes consumers more price-sensitive, potentially favouring more affordable options or shifting consumption from pricier on-trade venues (pubs, bars) to the off-trade (supermarkets) for at-home drinking. The historical affordability and accessibility of wine through supermarkets likely contributed to its rise relative to traditionally pub-focused beer sales.
• Changing Social Norms and Occasions: Drinking patterns are adapting to modern lifestyles. There’s a notable trend towards more at-home consumption and socialising. Younger generations, in particular, exhibit different drinking behaviours, often consuming less alcohol overall. Wine tends to align well with meal occasions and at-home gatherings, while beer consumption is more traditionally linked to pubs and watching sports. The rise of “mindful drinking” or “zebra striping” (alternating alcoholic and non-alcoholic drinks) also reflects changing attitudes.
• Availability and Retail Landscape: The structure of the retail market has transformed. Supermarkets have become dominant channels for alcohol sales, favouring products like wine that are well-suited to this model. Concurrently, the number of pubs has significantly declined over the years, impacting the primary channel for traditional beer sales. The growth of e-commerce offers another channel, potentially favouring wine and spirits based on online search trends.
• Product Innovation and Choice: The market offers consumers more choice than ever. This includes a vast array of wines from around the world, craft beers, diverse spirits, and rapidly expanding ranges of sophisticated low/no-alcohol alternatives and ready-to-drink (RTD) beverages. This innovation caters to demands for novelty, convenience, and specific occasion suitability.

These factors are deeply intertwined. For instance, economic pressures pushing consumers towards more affordable, at-home drinking naturally benefit categories like wine, which have strong supermarket presence and suit domestic occasions. This dynamic can further accelerate the decline of on-trade focused categories like traditional beer. Furthermore, the “mindful drinking” movement doesn’t solely drive abstinence or low-alcohol choices; it also encourages “premiumisation” – choosing better quality, often more expensive, drinks when consuming alcohol less frequently. This creates a polarised market dynamic, favouring premium offerings and innovative NoLo products, while potentially squeezing standard, mid-market alcoholic beverages reliant on volume sales.

Impact on the Drinks Industry

The evolving landscape of UK drinking habits presents both significant challenges and new opportunities for businesses across the beverage alcohol sector.

• Traditional Beer and Pub Sector: This segment faces ongoing pressure. The decline in per capita beer consumption and the reduction in the number of pubs necessitate adaptation. Breweries may need to diversify product portfolios, investing in growing segments like low/no-alcohol beers or exploring different packaging formats (e.g., cans for RTD appeal) and routes to market, including strengthening off-trade and e-commerce presence.
• Wine Sector: While benefiting from long-term growth trends and strong off-trade positioning, the wine sector faces its own hurdles. Potential impacts from excise duty changes based on ABV could affect pricing and product formulation, particularly for higher-strength red wines. Competition is also intensifying from sparkling wines (including English sparkling and Crémant) and sophisticated non-alcoholic alternatives.
• Low/No-Alcohol Market: This remains a key growth area across all beverage types. Success requires significant investment in product development to meet consumer expectations on taste, as well as effective marketing to build brand awareness and communicate benefits. Availability and shelf-space in retail remain challenges.
• Spirits and RTDs: Innovation in flavours, formats (especially RTDs for convenience), and premium offerings presents opportunities. While overall spirits volume growth may be muted, premiumisation offers a path to value growth. RTDs cater well to demands for convenience and specific social occasions.
• Retail and On-Trade Strategy: Supermarkets and online retailers continue to gain importance as primary purchase channels. On-trade venues like pubs and bars may need to adapt their offerings, potentially focusing on premium experiences, unique food pairings, or catering explicitly to the growing demand for high-quality low/no-alcohol options to attract customers.

The overall picture suggests a market bifurcation. Growth is concentrated at the premium end, driven by consumers seeking higher quality experiences when they do drink, and in the rapidly expanding low/no-alcohol segment catering to health and moderation trends. The traditional middle ground, especially for high-volume sales through the on-trade, appears to be facing the most significant pressure. Navigating this requires businesses to be agile, responsive to consumer needs, and willing to invest in innovation, marketing, and potentially new operational models or distribution channels. Such strategic shifts often necessitate financial backing to fund research and development, marketing campaigns, equipment upgrades, or changes in operational scale.

Business Finance Options for UK Businesses

Navigating the shifts in consumer preferences and market dynamics within the UK drinks industry requires strategic planning, adaptability, and often, access to the right financial resources. Whether it’s investing in new product development for the burgeoning low/no-alcohol market, upgrading brewing or bottling equipment, expanding distribution channels, or renovating a pub or retail space, securing appropriate funding is key. NexGen Business Finance is an expert broker dedicated to helping UK businesses across all sectors, including hospitality, retail, and manufacturing, find the finance solutions they need to thrive.

As a dedicated business loan broker, NexGen Business Finance leverages its extensive network of over 95 lenders to find tailored finance solutions, making the process fast and easy for businesses. This broad access increases the chances of finding competitive terms and suitable products, even in a potentially evolving lending landscape.

Explore Your Funding Options:

• Business Loans (Unsecured and Secured): Offering flexibility, unsecured and secured business loans can provide capital (£5,000 to £500,000+) for a wide range of purposes. This could include funding research and development for new beverage lines (like low-alcohol alternatives), financing marketing campaigns to target new consumer segments, investing in e-commerce capabilities, or covering general working capital needs during periods of transition.
• Merchant Cash Advance (MCA): Particularly relevant for pubs, bars, restaurants, and retailers experiencing fluctuating sales volumes typical of the drinks and hospitality trade. An MCA provides an advance based on future credit and debit card sales, with repayments taken as a fixed percentage of daily card takings, offering flexibility during quieter periods.
• Invoice Finance (Factoring & Discounting): Breweries, distilleries, wholesalers, and distributors supplying goods to retailers or hospitality venues on credit terms can use invoice finance to unlock cash tied up in unpaid invoices. Lenders can advance up to 90% of the invoice value quickly, improving cash flow needed to pay suppliers, staff, or invest in stock, mitigating the impact of long or unpredictable customer payment cycles.
• Asset Finance: Enables businesses to acquire essential equipment without draining capital reserves. This could cover the cost of new brewing tanks, distillation columns, bottling or canning lines, delivery vehicles, refrigeration units, or updated point-of-sale (POS) systems through leasing or hire purchase agreements.
• Bridging Loans: Provides short-term funding solutions to cover financial gaps. This might be useful for securing a property for expansion quickly, covering costs during a seasonal dip before a busy period, or bridging the gap while arranging longer-term financing for a major investment project.

Conclusion

The UK’s drinking landscape is clearly evolving. While headlines might focus on a simple beer versus wine narrative, the reality is more nuanced, involving long-term structural shifts, the powerful influence of health consciousness and economic factors, and the disruptive growth of new categories like low/no-alcohol beverages and RTDs. For businesses in the drinks industry, from production to point-of-sale, adaptability is paramount. Understanding these complex trends and having access to flexible financial solutions, like those facilitated by NexGen Business Finance, will be crucial for navigating the challenges and capitalising on the opportunities in this dynamic market.