Decade-long, detailed analysis from the IWSR reveals the resilience of beer, and the rapid growth of RTDs in recent years.
The IWSR has revealed analysis of global drinks category share from 2010 to 2021.
By volume, beer has endured a bruising couple of years due to the category’s high on-trade exposure, yet since 2016, beer has still managed to grow volume share in most regions.
Meanwhile, on the face of things, spirits suffered volumes losses: losing -3.1 per cent in compound annual growth rate (GAGR) between 2016 and 2019 (pre-pandemic). However, as IWSR point out, this is largely driven by the decline of cheap vodka in Russia and Baijiu in China, with all international spirits categories enjoying a period of growth.
Public health measures in both China and Russia mean that some drinkers have switched from baijiu and vodka to lower-ABV products such as beer or wine.
Wine experienced a -0.5 per cent decrease in CAGR pre-pandemic years, and was crunched further since 2019, falling by -1.2 per cent.
The great winner in terms of volume growth was, unsurprisingly, the ready-to-drink (RTDs) category, experiencing 10.8 per cent CAGR between 2016-2019, before rocketing to 16.8 per cent CAGR during the pandemic years.
Taking a closer look reveals that beer is expanding market share in emerging markets, but declining in more mature markers, where RTDs and premium spirits are on the rise. The IWSR gives the example of North America, where beer volumes fell at a CAGR of -1.7 per cent in the five years from 2016, whilst spirits rose at CAGR of plus three per cent and RTDs surged at +33.3 per cent CAGR.
The premiumisation of spirits has continued at pace since 2016, with the average price per serving increasing at a CAGR of +7.3 per cent. Alongside the decline in low-end spirits in large markets including Russia and China, this growth has been driven by the premiumisation of portfolios by brand owners, in both mature and emerging markets.
As for value growth, the Asia Pacific region (including ANZ) has seen an incredible expansion for spirits, which has taken share from every category, with the exception again being RTDs. Asia Pacific (APAC) is now the largest market for drinks, while the European market has seen the greatest erosion, primarily losing out to APAC.
RTDs doubled in value in North America, between 2010 and 2019, before doubling in value again between 2019 and 2021, reaching 11 per cent. RTDs also recorded a volume CAGR of +34 per cent in the five years to 2021.
As the IWSR report reads: “RTDs have been growing at 10 per cent per year, rapidly accelerating immediately before and during the pandemic in virtually all markets.”
Australia is the fourth largest market for RTDs, after the US, Japan and Canada. The category’s growth in Australia has been steadier by comparison (with the US recording a volume CAGR of +34 per cent, and Canada of +26.1 per cent between 2016 and 2021) confirming the long-held perception that Australia is a more mature market for RTDs.
In the most part, the IWSR serves to put long-term data behind trends that retailers and on-premise operators had observed. The pandemic appears to have intensified pre-existing shifts in the market, and what remains to be seen is whether these trends will continue so strongly, moving into the post-lockdown world.