Resilience in key markets coupled with the brand owners’ swift response to changing market conditions has led IWSR to forecast that alcohol consumption will grow by a Compound Annual Growth Rate 1.5% between 2021 and 2025.
Indeed by 2023 IWSR expects total beverage alcohol consumption to return to pre-Covid levels, with consumption steadily increasing through to 2025.
Recovery will be boosted by the industry pivoting rapidly in key markets, the momentum of e-commerce and RTDs and the increasing sophistication of the at-home occasion in many markets.
The two fastest-growing categories, according to IWSR forecasts, are No-Alcohol spirits (projected to grow at 30.6% CAGR 2021-2025) and RTDs (growth projection of 10.2%).
“In many global markets Covid-19 accelerated the impact and growth of key industry drivers such as the development of e-commerce, premiumisation, the rise of the ‘home premise’, moderation and the need for convenience in product formats,” says Mark Meek, Chief Executive of IWSR Drinks Market Analysis, the leading authority on the global beverage alcohol market, “These are the trends that will also underpin the industry’s resilience as it pivots to meet consumers where they are in the years to come.
“Additionally, across many markets, some segments of the population now have significantly more disposable income than they did in 2019, some of which will be spent on beverage alcohol products.”
Beverage volumes down 6% in 2020
Based on IWSR’s exhaustive examination of data from 160 countries across the globe, total beverage alcohol volume decreased by 6.2% in 2020, impacted by the near complete shutdown of bars and restaurants around the world.
Though an unprecedented downturn, the 6.2% decline was less than previously forecast as several factors ultimately helped the industry last year such as: acceleration of e-commerce (up 45% from 2019 to reach $29 billion in 2020), growth of RTDs, strong at-home consumption in key markets and resilience and growth in the US and China.
Another pre-Covid trend that will continue to accelerate beverage alcohol recovery is product premiumisation.
Though the economic impact of Covid-19 has led to restricted spending for some, alcohol is an affordable luxury for those willing to spend. IWSR forecasts that premium-and-above wine and spirits will increase by 25.6% in total volume between 2020 and 2025 (compared to 0.8% volume growth over the same period for brands in lower price tiers).
Wine: the go-to home drink during Covid
Many consumers in key markets chose still wine as their go-to drink at home during Covid.
Though wine consumption has been in decline, consumers in markets such as the UK, Australia, Brazil, Canada and the US have lifted wine to a global volume growth of 1.7% this year and 0.4% CAGR 2021- 2025.
Conversely, imported wine in China has experienced a steep decline which will contribute to an expected 7.7% decrease in wine volume in the country 2021-2025.