With the government's alcohol tax review dangling like the Sword of Damocles over suppliers' heads, 2010 was never going to be an easy year. Factor in rising input costs, a weaker pound, higher taxes and promotions, and the category-wide sales slowdown does not look so bad.

The good news is that while the rate of growth almost uniformly slowed, only two sectors ale & stout and wine registered volume declines. Lager tipped back into positive volume growth, while the success of pre-mixers meant a new-look RTD sector was by far the fastest-growing. Crabbie's Ginger Beer alone was responsible for over 70% of the category's total value growth.

In spirits, the top 10 made major gains, accounting for 90% of market sales on the back of aggressive promotions, and growth was very much at the expense of own label. But Smirnoff also doubled its growth rate thanks to its expansion into new formats and flavours, says Diageo grocery director Andy Adams.

The £5.3bn wine sector is still the biggest, but its drop in volume sales has not surprised brand leader Blossom Hill.

Brands that have focused on volume have "cannibalised" sales from higher-priced lines, decreasing category value, says Liz Ashdown, marketing manager for the brand at Percy Fox, Diageo's wine division. Other factors include a slowdown in rosé growth and a reliance on special deals, with 65% of all wine sold on promotion, Ashdown adds.

Brands like Blossom Hill and Gallo have pulled back from deep promotions in an attempt to drive long-term value, she says. The effect can be seen on sales Blossom Hill's growth has dropped to just 1.1%. Meanwhile, Constellation has made impressive increases in its core brands, largely from Hardys' sponsorship of Channel Four's Come Dine With Me, says Clare Griffiths, vice president of European marketing for Constellation.

Retailers also sharpened their focus on own-label wine in 2010, relaunching and expanding their ranges. Sainsbury's launched its new label House in May, Tesco announced plans in March to double sales of Finest wines and this month Morrisons debuted its own-brand wine.

Cider and perry had another good year, second in growth only to RTDs, but the growth in the sector did drop nine percentage points on last year, to 7.7%.

"Although the growth rate appears to have slowed, it is from a much higher base [than in 2009], so to keep the growth rate at this level is a very impressive performance," says a Heineken UK spokesman. The significant drop in Strongbow's growth from 21.9% in 2009 to 4.2% reflects the overall figures, he adds.

The rise of multipack premium ciders like Magners and Kopparberg has been a trend for 2010, says Tesco ale and cider buyer Ian Targett.

Budweiser is the star of the lager sector, with value increasing 54.1% to £240.1m. As the World Cup's official beer, Budweiser ran its biggest-ever on-pack promotion.

But brand leader Stella Artois, along with other top lagers Foster's and Carling, saw a decline in sales. "It is no secret that retailers continue to use beer, wine and spirits as traffic-building categories," says Stuart MacFarlane, president of AB InBev. "This results in the continuing discounting of BWS to drive overall store profitability."

As well as a return to form for Carlsberg, premium brand Peroni booted Stella 4 out of the top 10 with a 28.8% sales increase. But there is still potential in the Stella 4 brand.

Growth slowed across the ale and stout sector, down from 6.1% in 2009 to a flat 0.5% last year, although sales of Boddingtons Draught Bitter grew by 7.9%.

A drop in sales for Heineken's John Smith's brands was due to a decline in canned ale, according to a company spokesman. Targett says the challenges for ale and stout remain an ageing consumer base and stiff competition from mainstream and world lagers.

The big can pack brands have been trading like the big lagers, relying on promotions to drive sales, but premium ale brands are doing well, according to Nielsen.

"Bottled ale is in very healthy growth and catching up with canned ale sales, but premium liquid, whether in cans or bottles, is driving the growth in ale and stout," says Targett.

Launch of the Year: Jack Daniel’s & Cola (BBFB)
Providing boozy respite for commuters and time-starved partygoers, the pre-mixer category was a huge channel of innovation for spirits brands in 2010. But considering the scarcity of innovation coming out of the world's most famous Tennessee whiskey distillery, Jack Daniel's & Cola deserves a special mention.

Sporting the iconic black colour scheme that has lured many a rock star to disgrace over the decades, the dark cans stand out on the pre-mixer shelf, although the 6% abv might not pack enough punch for the likes of celebrated JD fan Keith Richards.

Top Products Suurvey 2010