Our first question here is as follows. Imagine the global economy jolts itself out of its current doldrum (as we write, the annualised growth rate is dispiritingly less than 4%) and, because of this plus some extraordinary good fortune plus some visionary policy-making, the UK expands at a wonderfully compoundable rate of 2.5% in each year of the decade to come…. Would any of the following things be, sooner or later, likely to occur?
- The amount of money spent on alcohol by people under 40 rises
- The number of painkiller/opioid prescriptions declines
- The incidence of recreational drug use increases
- Obesity contracts
- Both smoking and vaping are rare
- Every household has at least one vegan
Before taking this fantasy enquiry forward, let’s make the banal but critical observation that no advanced Western country has ever regulated what we might call our fun agendas with absolute success; consumers seem, as a community, never able to regulate their consumption of certain socially prominent products to a point of mental and physical health-optimisation. This truth has confounded many a public health campaign over all the post-War decades.
Let’s rush to our point. The decade of austerity and the weakness in GDP / household spend to which it has given rise has had the effect of distorting and disguising the underlying condition of our national food & drink appetites – by shifting cause-and-effect therein.
Real wage growth has, after all, been negative in 2009, 2010, 2011, 2012, 2013, 2014 and 2017 – cumulatively speaking, a massive hack at the wallet of low/middle-income families. Such real growth as there has been nobody could call flamboyant; few are able to indulge in rampant consumerism on a median household income (2019) of approximately £30,000 pa. Our own Optimism Index tracks just how and where consumers withdraw from fun spend in this very environment.
Now, as conventional alcohol consumption is in decline (the BBPA says, for instance, that we are drinking 2 billion fewer pints of beer in 2019 than we were in 2007), is that a function of depressed economic prospects or successful public health campaigns?
Or has it something to do with the fact that there are now 1 million students receiving a total of £16 billion in loans each year (with an average repayment debt of £32,000)? Is the student loan phenomenon (still not quite a generation old) simply draining the thirst of the young and cohortishly draining it for the rest of their lives?
(Incidentally, the HO Crime Survey 2018 suggests that drug-taking amongst the 16-24s is also in absolute decline : < 20% indulging at least once a year).
Well. It’s not really good enough fatalistically to assume that a market such as alcohol naturally contracts under the play of many such forces. In the manner of growth accounting, we have to try to weigh the agents of change (and not to presume that they will always get heavier); otherwise, corporate strategy in any such sector might well depend on a kind – maybe even a cult – of a cultural hearsay heralding irresistible shrinkage. How would, say, a spirits company otherwise know for sure that brand premiumisation was a good long-term approach to sales sustainability? How would a brewery know when, if ever, investment in low-alcohol beers should properly end?
In the past, trends analysts spoke of pretextual drinking (it’s my birthday – let’s have some champagne) versus contextual drinking (it’s dinner time – a bottle of beer as usual) and the impact such a division would make on product positioning. But the widest economic context, as the last decade has shown, matters big time too.
We can think of this phenomenon from the other side of the bar as well. To what extent is the alcohol market held in place by regular broadsheet stories to the effect that red wine is good for your digestive tract or that beer improves brain health or that two large glasses of Chablis strangely enhance your sexual attractiveness (we made up the last one)? The answer is that such media chat matters hugely (even though the small print of the scientific studies referenced usually reveals that the putative health benefit occurs only if you sip a thimbleful of tipple every third equinox and no more).
Our point is that the fun-pound will always elbow its way to market while any abrupt or substantial change in our macro-economic conditions will alter the distribution of commercial beneficiaries. The truest marketing perspective resides in this story.
So we can ask out loud: if there were to be 20% of the population devoted to a vegan lifestyle, would alcohol consumption rise, fall, stay the same?
The play is the thing, the play of unstable but permanently interactive and always measurable forces.