The latest research from alcohol industry analysts IWSR has found that while overall spend on alcohol is falling in many markets, consumers confidence about finances and the future is improving and is more positive than it was last year.
IWSR said that consumers are cutting back on alcohol spend as inflations sees the price of necessities like meat, fish, poultry, and cleaning products increasing. This trend is most pronounced in the UK, where inflation has been rising at double-digit rates, but is also notable in Germany and Australia.
In these countries, as well as in France and Canada, where there are also moderation or financial pressures, deciding not to buy alcohol was found to be the second most popular strategy for saving money.
“To allay the impact of the cost-of-living crisis, beverage alcohol consumers are becoming more selective in how and when they spend on alcohol,” said Richard Halstead, COO Consumer Insights, IWSR Drinks Market Analysis.
“After the pandemic, at-home drinking is still preferred, but there is a strong motivation to go out, just with less frequency and more mindfulness in alcohol consumption and spending,” he added.
The IWSR research was based on consumer surveys conducted in February 2023 across the 17 key markets of Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, Mexico, Netherlands, Poland, South Africa, Spain, Taiwan, the UK, and the US.
And while alcohol’s share of wallet is declining, premium consumption behaviour continues in many markets, but is growing at a more moderate rate than previously. Premiumisation for certain categories is strongest in markets where more positive general sentiment prevails, such as stated Champagne spend in China, and stated spend for Tequila/Mezcal in the US and Mexico.
IWSR also said its research found that whiskies remain more positive than other categories however consumer momentum for it slows in Australia due to adverse economic and tax conditions.
The moderation trend is also continuing with IWSR saying there is “consistently positive sentiment” towards moderation as a money-saving strategy, the analysts said: “This supports the resilience of the premiumisation trend, with many consumers choosing to drink better quality less often, rather than having to down-trade. Relying on promotions is the top money-saving strategy, enabling consumers to still stick with their preferred brand or drink type.”