Cocktail of new trends orders radical refresh for Diageo
The industry is under pressure from weight-loss drugs that suppress alcohol craving and the 'sober curious' movement among Generation Z – those born between 1997 and 2012.
Sales of no or low alcohol drinks are up 28 per cent at Ocado and 32 per cent at Waitrose, while pubs are predicted to sell a record 33 million pints of no or low alcohol beer this summer, according to the British Beer and Pub Association.
No or low alcohol drinks are on a 'gradual march into the mainstream', says Fraser McKevitt of Kantar. The research firm found seven in 100 households bought one last month, lifting sales 21 per cent.
Sarah Holland, Waitrose's low-and-no buyer, said: 'There's a trend to wellbeing-focused drinking that doesn't compromise on flavour or social connection.'
Olivia Ferdi, who founded Trip, Britain's largest privately owned soft drinks firm, goes further: 'The main reason people drink alcohol is to relax and unwind, but most alcohol-free options don't deliver on taste or relaxing.'
She says Trip's CBD-infused drinks take the edge off a long day.
There are shifts in the market for alcoholic drinks too.
Traditional aperitifs such as gin and tonic are being replaced by the likes of Hugo Spritz – a mix of elderflower liqueur, prosecco, mint, soda water and lime. So is Britain really going teetotal?
'There is an equally strong movement to moderation, where consumers drink less but better,' said Ed Faulkner of Sapling Spirits, which makes 'climate-positive vodka' from winter wheat.
So Gen Z still has an appetite for the social lubricant that makes for those memory-forming occasions of our 20s and early 30s.
Diageo in further cuts to brand portfolio
Diageo is to announce a further cut to its 200-strong brand portfolio as it unveils lower profits this week.
Shares in the drinks giant have fallen by a quarter this year and halved since the pandemic as it grapples with US tariffs and weak demand in key markets like Latin America and China.
Diageo, whose brands include Baileys and Smirnoff, said in May it was plotting 'substantial' disposals in the next three years as the FTSE 100 firm unveiled a £370 million cost-cutting plan.
This could involve beers like Hop House, Kilkenny and Tusker Lager. The Mail on Sunday understands the firm is also exploring the sale of less profitable local brands.
Analysts expect a fall in full-year sales to £20 billion and lower operating profits.
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