After declines in 2023 and continued challenges in 2024, global beverage alcohol is expected to begin its recovery in 2025, according to comprehensive new data and forecasts from IWSR, the global authority on beverage alcohol data and intelligence.
For the first time in almost 30 years, IWSR recorded a decline (-2% in 2023) in the volume of alcoholic beverages sold in the main US market. Meanwhile, total global beverage alcohol (TBA) fell -1% in volume and rose +2% in value (US$, variable exchange rate) in 2023. Excluding national spirits such as baijiu and shochu, global volumes declined -1% and the value has increased by +3%.
While some more positive signs are beginning to emerge in 2024, the global TBA market remains subdued after several years of above-trend growth, with challenges expected to continue through 2025 as household spending rebalances following strong inflationary pressures from 2 last years. TBA volumes are expected to grow by just +0.4% this year.
When the recovery comes, growth is expected to be relatively modest, with volume and value both growing at a CAGR of +1% between 2023 and 2028 – with the main value growth coming from India, China and the US, the latter market single mature. forecast to add significant value TBA in the coming years.
Together, India, China (including national spirits) and the US are expected to add $30 billion in incremental value (at 2023 prices) by 2028 as the axis of TBA growth continues to shift towards emerging economies. The next two most value-added markets are Brazil and Mexico.
Beverage alcohol headwinds for 2023 were caused by a rapid softening of demand as cost-of-living pressures increased in key consumer markets, combined with a strong rebound in inventories weighing on key categories.
The main market for volume growth in 2023 was India. All major spirits categories (except rum and wine) increased their volumes here, with Scotch and American whiskeys posting +7% volume growth. Elsewhere, markets including Colombia, the Philippines and Thailand have seen increases in volume and value.
The US spirits market (volumes down -2%) declined for the first time in nearly 30 years in 2023, and every major TBA category saw volume declines except tequila, some US whiskey segments and RTDs . Looking ahead, tequila is poised to add the most value to the US spirits market by 2028, driven by premium expressions and above.
China saw volume decline in a number of categories amid concerns about slowing economic growth and rising unemployment among younger LDA consumers. International spirits rose +2% as market trading reopened, but cognac (-3%) and Scotch malt (-11%) volumes declined.
These market conditions reflect a more complex and uncertain macroeconomic landscape, with IWSR consumer research showing that households remain under significant financial pressure and amid signs of increasing government regulatory pressures in key markets.
“The continued shift in TBA’s growth axis, with earnings now coming more from emerging markets, brings greater exposure to business risk. Companies need to reorient their global strategies to target new growth opportunities,” says Emily Neill, COO Research and Operations, IWSR. “Expansion across categories as well as geographic footprint will be increasingly important. In today’s market global TBA, companies must continue to innovate in order to succeed.”
IWSR’s analysis of the global beverage alcohol market also shows:
Premiumization evolves
Premiumization slowed further, with volume declines in the main premium price band for spirits (-3%) and wine (-3%), although super-premium price levels and above showed more resilience (0% and -2% respectively).
Premium beer fared better, gaining +2% in volume and +5% in value as consumers increasingly prioritized affordability over quality. Premiumization continued in global travel retail – despite a marked increase in promotional activity among the higher price tiers.
“Future growth is now no longer guaranteed to come from key premium price levels, although the outlook here should start to brighten from 2025 onwards,” notes Neill.
Restrained growth for souls
Spirits had a lackluster performance in 2023, with flat volumes versus 2022. Low growth is expected to return in the coming years, with projected 2023-28 CAGRs of +1% (volume) and +2% (value). excluding national spirits. Including national spirits (such as baijiu and shochu), volumes are expected to be flat, with value growing at +1% CAGR.
The universe of premiumization for spirits is narrowing: while agave was the main driver of premium growth and above in a wide range of geographies in 2023, the gin boom has ended even sooner than anticipated, with notable declines from the highest levels high of the pandemic. markets such as the UK (2022-2023 volumes -14%) and Spain (-11%).
The beer remains stable, with room for growth
Despite a -1% decline in global beer volumes in 2023, the category posted +4% value growth and is expected to register +1% CAGR growth for both volume and value between 2023 and 2028.
South Africa was a bright spot in 2023, with beer volumes growing by +9% thanks to a combination of affordability in a tough economy and investment by brand owners. The market is expected to continue growing at a volume CAGR of +3% through 2028.
Brazil is another key driver for the future, adding the largest growth from a single market and is expected to expand at a CAGR of +3% through 2028 (both volume and value).
The fall of summer was brightened by the rose
The structural decline of the global wine market continued in 2023, with volumes declining -4% versus 2022. The volume decline is expected to continue through 2028 – at a CAGR of -1% – with steady value growth.
The overall gloom over the category is lifted by the strong appeal of premium rosé in key markets such as the US, UK and Australia. Rosé’s popularity is fueled by a number of factors, including its consistency and drinkability; a fun and upbeat image associated with social occasions, such as endless mornings and summer outdoor fun; and a plethora of aspirational, established and stylish brands.
RTDs continue to shine
In 2023, RTDs were the star of the global beverage alcohol market – the only major category to record volume growth (+2%), along with a strong +6% increase in value. This growth is expected to continue, with volume and value projected to grow at a CAGR of +3% between 2023 and 2028.
As they expand, RTDs are becoming more sophisticated: cocktails and long drinks are continuing to gain traction as consumers explore more premium options, as well as look for more affordable and convenient alternatives to traditional alcoholic beverage categories.
Agave expands its horizons
The US continues to dominate the global agave spirits market – growing by +4% (volume) and +7% (value) in 2023 – with solid growth at premium plus price levels. It will account for the vast majority of future value growth for the category, which is projected to expand globally at a CAGR of +6% between 2023 and 2028.
But agave spirits are continuing to gain ground outside their hubs of the US and Mexico, growing +13% in volume and +25% in value in 2022-2023. As well as taking shelf space from the declining gin category in markets such as the UK and Spain, agave is gaining share of spirits in other key destinations, including Canada and Australia.
Volumes in India almost doubled through 2023 – and home-grown agave spirits are making their mark here. Agave is also the fastest-growing top spirits category in global travel retail sales, growing by +37% (volume) and +58% (value) in 2022-23.
Non-alcohol is encouraged as moderation goes mainstream
All alcohol-free categories posted impressive gains in 2023: global alcohol-free beer volumes grew +6%, sparkling wine grew +7%, and alcohol-free spirits continued their recent double-digit growth with a +15 % growing volume. In value terms, growth was even higher.
The latest Bevtrac consumer data from IWSR shows that alcohol-free is the only market segment with positive momentum, driven by year-on-year increases in the non-drinking population in several key markets, including India, China, the UK and Great Britain and the United States.
As moderation enters the mainstream, it is being embraced by consumers for financial and health reasons, leading to long-term lifestyle changes. Regulatory pressures in a number of global markets reinforce these trends, as does the impact of alcohol consumption guidelines from governments and global agencies.
#Global #Beverage #Alcohol #Market #Set #Moderate #Recovery #Challenges #Continue #IWSR
Image Source : www.theiwsr.com