New forecasts from IWSR Drinks Market Analysis show positive signs of recovery for global beverage alcohol, driven by ecommerce and RTDs, with a projected 2.9 per cent growth in volume by the end of 2021.
By 2023, IWSR expects total beverage alcohol consumption to return to pre-COVID levels, with consumption steadily increasing through to 2025. The analysts said that as well as the momentum of ecommerce and RTDs, recovery will be boosted by the industry pivoting rapidly in key markets and increasing sophistication of the at-home occasion in many markets.
Mark Meek, CEO of IWSR Drinks Market Analysis, said: “In many global markets, COVID-19 accelerated the impact and growth of key industry drivers, such as the development of ecommerce, premiumisation, the rise of the ‘home premise,’ moderation, and the need for convenience in product formats.
“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.”
Lockdowns around the world saw total beverage alcohol volume decrease by 6.2 per cent globally in 2020, according to IWSR’s examination of data from 160 countries.
The 6.2 per cent decline was less than many forecasts, with IWSR identifying several factors which ultimately helped the industry last year, such as: acceleration of ecommerce (up +45 per cent from 2019, to reach US$29 billion in 2020), growth of RTDs, strong at-home consumption in key markets, and resilience and growth in the US and China.
As well as ecommerce IWSR said RTDs, which includes seltzers, are key to the overall volume increases after identifying double-digit global growth in 2020. IWSR also predicts that growth will continue, driven by key markets including Australia.
In the US, where the hard seltzer sub-category of RTDs grew by 130 per cent in 2020, RTD volume is already larger than the total spirits category, and IWSR said that by the end of this year, RTD volume consumption there will be larger than that of wine.
Premiumisation is set to continue as a key trend for the industry. IWSR forecasts that premium-and-above wine and spirits will increase by 25.6 per cent in total volume 2020-2025, however brands in lower price tiers are only predicted to see 0.8 per cent volume growth over the same period.