Nevertheless IWSR predicts that consumption of alcohol will grow by 3% over the next five years.
Beverage alcohol drinkers across the globe consumed a total of 27.6 billion nine-litre cases of alcohol in 2018, but while that number represents a decrease of 1.6% from the previous year, new IWSR data forecasts that total alcohol consumption will steadily increase over the next five years to 28.5bn cases in 2023.
The global retail market value for beverage alcohol in 2018 was just over $1 trillion, a number which the IWSR expects to grow by 7% to 2023 as consumers continue to trade up to higher-quality products.
The largest gain in global beverage alcohol consumption in 2018 took place in the gin category which posted total growth of 8.3% versus 2017.
IWSR’s Global Database also predicts that the gin category is forecast to reach 88.4 million cases by 2023 with particularly strong growth in key markets such as the UK, Philippines, South Africa, Brazil, Uganda, Germany, Australia, Italy, Canada and France.
Pink gin was a key growth driver, helping the category sell more than 72 million nine-litre cases last year.
The Philippines (the world’s largest gin market) posted growth of 8%, fuelled by a booming cocktail scene and premiumisation of the market.
But Brazil has emerged as a new hotspot for the category, with volumes there more than doubling last year and forecast to grow at 27.5% Category Annual Growth Rate 2018-2023 as the gin-and-tonic trend increases in the upmarket bars of São Paulo and Rio de Janeiro.
“Every year our analysts spend months travelling the world to speak with suppliers, wholesalers, retailers and other beverage alcohol professionals to assess what’s happening market-by-market in this fast-changing business,” says IWSR Chief Executive Mark Meek, “The raw data we collect is enormously valuable, but equally important is what that data tells us in terms of trends, challenges and opportunities facing the industry.”
Increasing consumption of whisky and Agave-based spirits
Spurred by innovation in whisky cocktails and highballs, the global whisky category increased by 7% last year, driven in large part by a strong Indian economy (where whisky grew by 10.5% as consumers continued to trade up in the category).
The IWSR forecasts that whisky will grow by 5.7% CAGR from 2018 to 2023 to almost 581m nine-litre cases. The US and Japan posted growth of 5% and 8% respectively.
Continued interest in tequila and mezcal (especially in the US) and innovation in more premium variants and cocktails drove the Agave-based spirits category to global growth of 5.5% in 2018 – and it’s expected to post 4% growth over the next five years (2018-2023 CAGR).
Mixed drinks and cider growing
The mixed drinks category (including pre-mixed cocktails, long drinks and flavoured alcoholic beverages) grew 5% in 2018. By 2023 it’s projected that more than 597 million nine-litre cases of mixed drinks will be consumed across the world. The growth is backed by continued strong gains in Ready-To-Drink cans in the US and Japan, the category’s two largest markets.
In Japan, most RTDs are locally made and almost exclusive to Japan. Their popularity is partly due to the fact that they’re relatively dry which makes them more food-friendly and ‘sessionable’.
In the US, the popularity of alcohol seltzers has been a tremendous engine for growth in the RTD market.
As investment levels in cider products continue to rise, IWSR predicts that almost 270 million cases of cider will be consumed in 2023, representing a 2.0% CAGR 2018-2023.
Both of these categories (mixed drinks and cider) are taking share from beer as perceived accessibility increases (less bitter, easier to drink).
Vodka, liqueurs and cane spirits in decline
Vodka lost volume in 2018 (down 2.6%) as the market for lower-priced brands continued its decline in Russia and the Ukraine (two of the largest markets for this spirit). Higher-priced vodkas, however, showed a more positive trend last year.
Nonetheless, the outlook for total vodka over the next five years remains sluggish as the category is forecast to decline by 1.7% CAGR 2018-2023.
The flavoured spirits category (liqueurs) is also in decline, dropping by 1.5% globally in 2018 and is expected to continue to slip in 2019 before rebounding slightly in 2020.
Cane spirits (primarily Brazilian cachaça) were down 1.6% last year and are forecast to lose another 4.5 million cases by 2023.
Beer continued to lose volume in 2018 but expected to rebound
Global beer declined 2.2% in 2018, impacted greatly by volume decreases in China which witnessed a decrease of 13%. Other large markets such as the US and Brazil also fell (down 1.6% and 2.3% respectively) although Mexico and Germany witnessed growth of 6.6% and 1% respectively.
The future outlook for beer, however, paints a more positive picture as the category is expected to show a slight increase in 2019 and post a 0.7% CAGR 2018-2023.
Wine volume declines, value increases
Wine, which had posted strong global growth in 2017, lost 1.6% in volume in 2018 as wine consumption declined in major markets such as China, Italy, France, Germany and Spain. The US market was flat.
While consumers are drinking less wine, however, they’re increasingly drinking better wine – pushing wine value up.
Globally, the retail value of wine is projected at $224.5 billion by 2023, up from $215.8bn in 2018.
The one bright spot in wine volume can be found in the sparkling wine category which is expected to show a five-year CAGR of 1.17% 2018- 2023, driven in large part by prosecco according to IWSR.
Low- and No-Alcohol products on rise
Low- and No-Alcohol brands are showing significant growth in key markets as consumers increasingly seek better-for-you products and explore ways to reduce their alcohol intake.
Growth of No-Alcohol beer is expected to be 8.8% and Low-Alcohol beer at 2.8%. No-Alcohol still wine is forecast to rise by 13.5% and Low-Alcohol still wine at 5.6%.
Growth of No-Alcohol mixed drinks is predicted at 8.6% (figures are all CAGR 2018- 2023).
Top Ten Performing Global Markets 2018-2023
A look at the world’s fastest-growing beverage alcohol markets shows an emergence across a variety of developing countries. A combination of growing legal drinking-age populations and healthy economies is driving some of this growth which is expected to continue over the next five years.