Alcohol brand owners will need agility and adaptability to unlock growth in the Asia Pacific (APAC) region in the years ahead, according to drinks industry analysts IWSR.
Total beverage alcohol value and volumes fell by three per cent and two per cent respectively in 2024 across APAC, with all major categories registering value declines and only RTDs growing volumes, but only by one per cent.
The year was marked by contrasting fortunes for the region’s two most populous countries, China and India. While the former saw its TBA volumes reduce by five per cent amid declines for Cognac, Scotch whisky and baijiu, India’s TBA volumes expanded by six per cent, and consumption of premium-plus products was up by 19 per cent.
Emily Neill, IWSR’s Chief Operating Officer Research and Operations, said: “With inflation stabilising and GDP expanding, India and the Philippines are leveraging demographic momentum to fuel TBA growth.
“Meanwhile, Japan and Thailand inch forward, and China continues to underperform, with the real estate crisis and weaker economic outlook significantly reducing the scope for TBA growth.
“While premiumisation is softening globally, Southeast Asia still offers room to grow value, supported by tourism, cocktail culture and rising affluence. In this slower-growth, value-led environment, staying invested in Asia’s beverage alcohol markets is vital. The region is evolving, with new opportunities emerging.”
IWSR forecasts suggest mixed fortunes for China in the years ahead: while beer volumes between 2024 and 2034 are predicted to be flat, RTDs are expected to grow at a CAGR of two per cent, sparkling wine at a CAGR of five per cent and still wine flat.
Spirits are expected to decline at a CAGR of one per cent, but excluding baijiu the 10-year volume CAGR is up two per cent.
Looking at the spirits category across APAC, IWSR said that emerging spirits are seeing growth at the expense of traditional segments such as Cognac and Scotch whisky. Cognac’s volumes in the region dropped 11 per cent in 2024, with value falling 16 per cent and Scotch volumes were flat. There were strong gains, off smaller bases, Irish whiskey (volumes up 27 per cent), Tequila (14 per cent), gin (11 per cent) and spirit aperitifs (24 per cent).
IWSR said it expects overall spirits volumes across APAC to continue to decline this year and during 2026, before staging a recovery in 2027-29. India’s forecast growth will almost – but not quite – offset continued volume declines in China, mostly caused by baijiu.
Wine endured another difficult year in the APAC region in 2024, with volumes down by four per cent. IWSR is forecasting continued volume declines for wine to 2029, but at a progressively slower rate.
Still wine’s struggles will be most evident in China (2024-29 volume CAGR down two per cent), Japan (down one per cent) and Australia (also down one per cent), with growth in the Philippines, India, Thailand and Vietnam offering some positivity.
The picture is brighter for sparkling wine, where Australia offers the greatest volume opportunity over the next five years (2024-29 volume CAGR up two per cent).
IWSR forecasts predict that, following the three per cent fall registered in 2024, APAC beer volumes will continue to decline this year, before returning to growth from 2026 onwards.
RTDs offer the strongest growth prospects in APAC in the coming years, cementing the category’s status as the only one to record volume growth in the region during 2024, thanks to resilient performances in Japan and South Korea.
Although IWSR said that Australia, a previous driver of RTD growth, is not expected to add significant volumes in the years ahead.