In response to Bord Bia's newly-published "Export Performance and Prospects 2020/21" report, the representative organisation for Irish alcoholic drinks manufacturers and suppliers, Drinks Ireland, has released a 10-point drinks industry outlook for 2021.
The 10 points of Drinks Ireland outlook are as follows:
1. 2019 Will Be The "Benchmark" For The Drinks Industry
Drinks Ireland stated that, prior to COVID-19, the drinks industry was experiencing strong growth, which it will be seeking to regain. The organisation said that looking at exports, for example, according to Bord Bia's newly-published "Export Performance and Prospects 2020/21" report, in the four years from 2016 to 2020, there was €140 million of growth in the value of alcohol exports, with 58% of that growth being to the EU and 41% being to North America.
2. Domestic Market Recovery Will Require A Revised Plan For Living With COVID-19
Drinks Ireland believes that recovery in the domestic drinks market will require a revised plan for living with COVID-19, along with a speedy roll-out of vaccinations.
3. Regaining Growth In Export Markets Will Be Vital
Drinks Ireland said that while exports were hit last year, they remained strong, and supporting brands to recover and regain market position and share should be a key priority for the government this year. The organisation believes that funding "boots on the ground" through brand ambassador placements in markets around the world has long been the key to Irish food and drinks export success and will be more vital than ever.
4. Alcohol consumption will continue to decline in Ireland
According to Drinks Ireland, Revenue clearance data indicates that alcohol consumption in Ireland fell by 4.5% year-on-year between January and September of 2020.
The organisation stated that while the sector will aim to recover from the impact of COVID-19 this year, it anticipates that the long-term trend of consumption declining and consumers choosing "quality over quantity" will continue.
Drinks Ireland added that the average alcohol consumption per adult has fallen by 23.2% in Ireland since 2001, according to CSO and Revenue data.
5. A Restart Of International Tourism Will Support Visitor Centres
Drinks Ireland stated that Irish drinks visitor attractions are highly (90%) dependent on international visitors, and that such attractions will be dependent in the short-term on the maximisation of domestic tourism. The organisation said that it will innovate to attract new types of visitors and will move to add value with smaller group, more bespoke, higher end experiences, and that as international travel opens up to a greater extent, the industry will also be looking to increase footfall from visitors from abroad.
6. Meeting The Demands Of A Changing Drinks Consumer
Drinks Ireland stated that as the drinks sector works to regain growth at home and in export markets, it will continue to focus on meeting the needs of the changing drinks consumer through innovation.
According to Drinks Ireland, in the beer sector, low and non-alcoholic options are becoming more popular, and non-alcoholic beer now accounts for 1% of Ireland's beer market; there is a growing demand for high quality spirits products such as Irish gin and Irish whiskey, with domestic sales of spirits growing by 0.7%, from 2.4 million to 2.42 million nine litre cases, between 2018 and 2019; hard seltzers will grow significantly from being a new market entrant last year, with many new brands set to land on shelves in 2021; the Irish cider industry has innovated significantly in recent years, which has reinvigorated the market and resulted in more choice than ever for Irish cider consumers; and in terms of wine, sales of rosé grew in 2019, and the summer favourite now accounts for just under 6% of all wine consumed in Ireland, up from 3% in 2019.
7. The Drinks Industry Will Continue Driving A Sustainability Agenda Forward
Drinks Ireland stated that Irish drinks producers will continue to push a sustainability agenda forward this year, as many companies have ambitious targets for 2021 and beyond. The organisation added that looking at Irish brewers, for example, in recent years they have started to re-purpose grain for beer into livestock feed, have achieved zero waste to landfill at production sites and offices, and are using more recyclable material for packaging.
8. Irish Whiskey Industry Growth Will Drive More Rural Development And Inner City Regeneration
Drinks Ireland said that the drinks industry supports the domestic economy and jobs across Ireland, including in more rural locations where producers are located, and that many of Ireland's whiskey distilleries in provincial towns have moved into vacant industrial premises, replacing the enterprises that had previously operated there, as well as lost jobs. The organisation believes that this trend looks set to continue, with more developments planned, and added that similarly, in less rural settings, the development of distilleries in Dublin has played a pivotal role in kick-starting the urban regeneration of areas in the city.
9. E-Commerce Set To Grow As A Route To Market
Drinks Ireland noted that 2020 saw substantial growth in online drinks sales both in Ireland and globally, and stated that the rise of e-commerce offers opportunities for Irish producers to break into new markets and reach new consumer segments, and this will only grow in 2021. The organisation said that last year saw widespread innovation in online marketing and consumer engagement, with increasing numbers of online tasting events, and that this is a trend that is here to stay.
10. There Are Other Challenges Ahead
Drinks Ireland stated that outside of COVID-19, the drinks industry faces a number of other challenges. The organisation said that while the industry welcomed a deal being reached, there are increased costs and compliance burdens associated with Brexit, and that Bord Bia's newly-published "Export Performance and Prospects 2020/21" report notes, however, that alcohol has been one of the most successfully diversified categories and has one of the lowest dependency rates on the UK market of any major food and drink category, with just 15% of exports destined for that market.
Drinks Ireland added that the spirits sector has also been impacted by ongoing trade disputes between the US and the European Union.
© 2021 Hospitality Ireland – your source for the latest industry news. Article by Dave Simpson. Click subscribe to sign up for the Hospitality Ireland print edition.
