Did Covid-19 make or break the drinks industry?

let’s begin

Covid-19 seems to have had an impact on most areas of the life as we knew it. Here we explore how to alcohol world has fared during the global crisis.

Indoor Sales Take a Hit

The most obvious change is the decrease of indoor establishment sales of alcohol. With bars, nightclubs and restaurants around the world shutting their doors, of course sales of alcohol are going to go down. In other global crisis, such as the economic downturn of 2008, the drinks industry wasn’t hit that hard. This is because people could still go out and spend money in the hospitality sector.

With Covid-19, that all changed, and the hospitality sector became one of the hardest hit areas. Although we don’t have much data for this yet, it is not unreasonable to expect to see a massive decrease in establishment sales of alcoholic beverages, even with the takeout option that many venues are now providing.

A report from IAS (Institute of Alcohol Studies), snappily titled “Alcohol consumption during the COVID-19 pandemic in the UK – Second IAS briefing” does say that, “HM Revenue and Customs data show provisional duty receipts in the financial year to date are only 2.4% lower than the same period in 2019-20.” That’s not the most devastating impact on alcohol sales, when you consider just how widespread hospitality closures have been.

Home Drinking Becomes More Popular

Again, somewhat unsurprisingly, drinking at home becomes the go to choice for many people. When you can’t go out, bring the bar home!

Although in reality this could go either way. There were two surveys done this year, one of which said that almost 50% of British people were drinking more in 2020 due to Covid and almost a third were drinking less.

So when you think about it, that comes close to evening out. Again, that snappy IAS report says the same, “similar proportions of people are drinking more than before and less than before”. The 50% drinking more makes up for the third who aren’t drinking at all or are drinking less. And with many people saving money from not splashing out on over-priced restaurants, they are tending to go for premium or ultra-premium brands. And let’s be honest, we all need a little luxury, even if it’s Tesco’s Finest Champagne. Sales of scented candles have also gone through the roof so at least we’re all drinking in style.

New Opportunities

One of the upsides (if we can call it that) to the Covid-19 crisis has been the ability for brands to adapt. Plenty of companies have been able to change how they work, bringing in new audiences and being creative with their sales.

Bars and pubs are more likely to do take away sales now, which might be something to bring on board when the crisis is over. Although nothing will make it less weird seeing people enjoying their milk bottles full of craft beer in the park. It’s like we’ve all reverted back to being teenagers drinking cider in a field (or was that just me?).

What Happens Next

There are still many unknowns about how the Covid-19 crisis will look in another couple of months. With Christmas coming up it wouldn’t be unexpected that alcohol sales rise at the end of the year and then fall again as everyone goes on their annual New Years health kick. Hospitality might also open again during this time and establishment sales might also soar.

Only time will tell but so far, the industry has managed to stay on its feet. There might be a bit of a deficit, but sure we can always make up for this with celebrations when this whole bloody Covid thing is over!

Have you been enjoying alcohol more or less during lockdown? Start the conversation in the comments

Tags: Covid-19drinks industryindoor salesnew opportunities

Greg

My name is Greg, and I’m a brand strategy consultant, writer, speaker, host and judge specialising in premium spirits. My mission is to experience, share and inspire with everything great about whisky, whiskey, gin, beer and fine dining through my writing, my brand building and my whisky tastings.