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Liquid Assets – An Irish study on our drinks industry

Date: 01 Mar 2008

Spring 2008: In a recently published article in Irish Director Magazine Professor Mary Lambkin, Professor of Marketing at UCD Smurfit School, together with Tom Harper of AC Nielsen Ireland, reviewing the reasons behind the major changes in alcohol sales over the past two decades.

The study reveals that alcohol sales are quite income-elastic, with an approximately 1-1 relationship between increases in income and alcohol sales.

It goes on to note the notable change in the pattern of distribution of alcohol, with the shift from on-trade to off-trade sales. Six years ago 83% of sales were through pubs, in 2007 it fell to 61% with the trend set to continue.

Another key factor affecting the pattern of alcohol consumption is the changing profile of the Irish consumer base with immigration having a marked impact. Coupled with that is the increasing cosmopolitanism of our market, with marked increases in wine sales. As wine is largely consumed at home, this trend reinforces the shift towards off-trade sales.

Looking to the future it would be reasonable to expect a modest increase in drink sales over the next few years, with pub sales remaining relatively flat or even declining. For wine and cider sales the outlook is more optimistic. Off-trade sales will continue to grow steadily in the coming years. The real challenges remain for the on-trade.

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