Drinks market analysis firm IWSR has identified positive trends in consumer confidence, despite the fall in alcohol spend across many markets. Particularly in Europe, IWSR’s latest findings have identified an improved sentiment when compared with the end of 2022.
“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.
With consumers making cutbacks to their expenditure as they tackle increasing inflation rates, Australia has seen a decline in spending on alcohol. Financial pressures are seeing Australian consumers, as well as those in the UK and Germany, prioritising necessities in their money-saving strategies.
While consumers have adopted a mindful approach to their alcohol consumption, key findings show that premiumisation has persisted across several markets. The study found that acceptable price ranges have broadened across most alcohol categories in 17 key markets including Australia, with spirits especially benefiting from an increase in the acceptable price ceiling. Moderation has become a favourite money-saving tool of many alcohol consumers, but the trend of premiumisation has shown its resilience in consumer surveys conducted in February 2023.
Although alcohol drinkers are still leaning towards discounted and promotional items, latest findings confirm that this approach has been adopted on a slightly smaller scale than the previous year. Despite the continuation of money-saving strategies, many consumers are still choosing to drink premium products less frequently, rather than downgrading. Where a positive general outlook prevails, certain countries are celebrating a growth in premiumisation, in particular China has seen a positive trend in Champagne spend.
When compared with previous findings in October 2022, it was identified that category consumption momentum has stayed consistent across most markets. In Australia, whiskies have maintained positive consumer momentum despite adverse economic conditions. Globally, Cognac has experienced notable growth, this is reflective of the spirits momentum which has maintained its positive tracking across most markets.
Consumers around the world are still enjoying at-home drinking, but on-premise drinking has held up against economic pressures. The popularity for drinking in venues is largely driven by millennials and Gen Z who have favoured on-premise drinking across key markets. China, Japan and Taiwan are experiencing a positive increase in the number of alcohol drinkers choosing to visit venues, due to the relaxation of Covid-19 restrictions.
Compared with the previous study in 2022, consumers are adopting a more positive outlook on alcohol spending. Although money-saving strategies are still adopted by many, consumers are beginning to ease their attitude and premiumisation continues to grow.