Hooch is axed, but alcopops live on

Hooch, the brand which almost single-handedly created the market for flavoured alcoholic beverages (FABs) in the UK, has been axed after eight years, a victim of its own success.

Along with Two Dogs, Hooch's alcoholic lemonade was one of the first alcopop brands launched in the UK, paving the way for the billion pound market which is now dominated by the likes of Smirnoff Ice, Bacardi Breezer, WKD and Red Square.

But now Coors Brewers, the British arm of the US brewer which acquired the brand as part of its takeover of Carling a few years ago, has decided to stop production of Hooch in order to concentrate on its other - more successful - alcopop brand, Reef.

Commentators have long been predicting a shake up in the UK FAB market, which is now peppered with both household names and a raft of me-too brands. But the market is still very much alive and kicking, despite the proliferation of brands.

According to market analysts Mintel​, British consumers drank 278 million litres of FABs in 2002, compared with just 97 million litres in 1998, three years after the phenomenon was created by Hooch.

The UK market was worth £1.25 billion last year, almost three times as much as five years ago.

But Hooch's performance has not matched that of the market as a whole. According to Mintel, the brand's volume market share has dropped from 23 per cent in 2000 (when it was number two after Bacardi Breezer) to just 3 per cent in 2002. In value terms, the decline was similar, falling from 14 per cent in 2000 to just 2 per cent last year.

Contrast this with the top three brands by volume and value - BacardiBreezer, Smirnoff Ice and WKD - which showed volume increases of 80 per cent,264 per cent and 200 per cent respectively between 2000 and 2002, according to Mintel.

"The market for FABs is constantly evolving, with new flavours and new products being launched all the time. While this has helped stimulate interest in the market and has spurred dramatic sales growth, it has resulted in some brands being sidelined for newer, trendier products. The trick will be for manufacturers continually to innovate in terms of flavours, colours and ingredients,"​ said James McCoy, senior market analyst at Mintel.

That the potential is there to make money from FABs - provided the product has the right appeal - is clear from Mintel's research. One in four adults in the UK drinks FABs, with the figure rising to nearer one in three amongst women, with young people (18-24) being the main consumers (three in five).

And while any number of products fall by the wayside each month, most are swiftly replaced. According to Mintel's Global New Products Database, 70 new FABs have been launched over the past year in the UK alone.

But producers are also learning the lessons of the past, it seems, and are not simply trying to mimic the market leaders. The most successful new products in the future are likely to be those with herbal ingredients, particularly those with added functionality such as ginseng or guarana, while low calorie versions of the often sugar-laden drinks are also expected to do well.

But buoyant as it remains, the market clearly cannot sustain the high rates of growth it has experienced up to now. Mintel suggested that growth would slow over the next four years or so, with volumes expected to reach 400 million litres in 2007, valuing the market at some £1.7 billion, with factors such as increased taxation on FABs playing some part in slowing the rate of growth, offset partially by the launch of new products such as wine-based, rather than spirit-based, FABs.