Alcohol market analysts IWSR has published the results of its Bevtrac 2024 Wave 1 consumer insights (Bevtrac), which states that while moderation and downtrading are permeating mature alcohol beverage markets in 2024, the long-running premiumisation trend will continue in the longer term.
Bevtrac compares consumer sentiment and attitudes to beverage alcohol in the first half of 2024, with the position 12 months ago across 15 key markets: Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, Mexico, South Africa, Spain, Taiwan, the UK, and the US.
“A growing focus on health and at-home consumption, combined with a dramatic squeeze on household incomes, pushed consumers into downtrade mode in the first half of 2024,” said Nastya Timofeeva, Senior Consumer Insights Manager, IWSR.
“The changing political landscape in many markets further intensified consumer apprehension about the future, finances and spend on alcohol, which has become a luxury for many. After economic moderation forced consumers to cut spend on alcohol, many consumers are now choosing to maintain this new lifestyle.
“This fundamental structural shift to moderation will continue, with volumes remaining under pressure throughout 2024, although improving consumer finances are likely to reignite the ‘less but better’ premiumisation trend that has characterised the past five years.”
In terms of moderation, the Bevtrac data states that moderation habits that started during the Covid-19 pandemic are now becoming entrenched. There are multiple reasons for this, with the Bevtrac data finding that 50 per cent of those moderating their consumption are driven by a general prioritisation of wellbeing as well as changes to their social circles and habits. In addition 30 per cent are driven by economic factors, and 20 per cent by health concerns. The result is a reduction in the frequency, intensity and volume of alcohol consumption.
While consumers are moderating for these reasons, they still want to have social occasions and interactions, which is accelerating the adoption of no-alcohol products, and no-alcohol beer in particular.
No-alcohol is the only category that shows net positive recalled consumption in the first-half of 2024 across 15 Bevtrac markets analysed by IWSR.
Beyond beer, other no-alcohol categories are gaining traction in markets with a more established no-alcohol consumer base. Examples include no-alcohol sparkling wine in Germany and no-alcohol spirits in Italy.
In terms of premiumisation, IWSR states that while it expects the trend to continue in the longer term, greater resilience is being displayed by products at the higher end of the premium-and-above price segment.
Over the past 12 months, the share of drinkers consuming super-premium has risen in the US (increasing from 39 per cent to 42 per cent) and China (from 43 per cent to 48 per cent), although there were slight reductions in the UK and Taiwan.
“Consumers stating that they spend at super-premium-and-above levels are generally feeling more financially secure, with these populations growing slightly in the US and China in H1 2024 versus H1 2023,” Timofeeva said.
“In China, however, there is a notable shift from previous waves, where even financially insulated consumers are showing a significant decline in their spend on alcohol in general, year-on-year. This is also evident in Taiwan, and in both markets, could potentially be linked to an emerging trend of moderation as a lifestyle choice.”