This year has seen consumers adjust and adapt to the effects of COVID-19 and beverage alcohol ecommerce has become an increasingly important retail channel across the globe.
Global market research and data analysis group IWSR is forecasting that the value of alcohol ecommerce will increase by 42 per cent this year, across 10 core markets, to reach US$24 billion. In comparison, alcohol ecommerce value in those markets grew by 11 per cent in 2019.
The 10 core markets comprising Australia, Brazil, China, France, Germany, Italy, Japan, Spain, UK, and the US, collectively represent over 90 per cent of total alcohol ecommerce value. The report also examined an additional 10 ‘markets to watch’ and across the 20 markets IWSR expects the total value of alcohol ecommerce to exceed US$40bn by 2024.
“Consumers’ increasing proclivity for online purchasing has been driven by necessity in recent months, but these purchasing behaviours are here to stay. As brand owners increasingly invest in the channel, markets must be assessed on their own merits with a bespoke strategy developed,” says Guy Wolfe, Strategic Insights Manager at IWSR Drinks Market Analysis.
“This is especially important as government regulations for alcohol ecommerce may evolve as the channel continues to grow.
“The forecast size and growth of ecommerce means it can no longer be viewed as merely an interesting niche. Online is now a market in its own right, and one that the IWSR forecasts to equal the Indian beverage alcohol market in value by 2024. The channel should therefore be given an equivalent level of focus and be fully integrated into route-to-market strategies.”
Alcohol ecommerce has grown in almost all markets this year, but some have experienced more rapid increases than others.
China is currently the largest online alcohol market in the world, however, its growth rate (23 per cent value growth, 2019-2020) has been slower than that of the US, UK, Australia and Brazil. This is because alcohol ecommerce is already reasonably well developed in China, allowing for less room for growth.
Across the 10 core countries, marketplaces currently account for nearly half of total online alcohol sales by value, but the omnichannel and on-demand channels are predicted to gain share. The value of the Direct-to-Consumer (D2C) channel will also grow by almost US$3bn between 2019 and 2024, at a value CAGR rate of 24 per cent (2019 – 2024).
Though wine is the dominant ecommerce category in most countries, across the 10 core markets, ecommerce for ready-to-drink (RTD) products is predicted to represent 10 per cent of total alcohol ecommerce value by 2024 – up from two per cent in 2019.
The US is the main market driving RTD category growth, and ready-to-drink products are set to represent 20 per cent of US alcohol ecommerce value by 2024, compared to five per cent in 2019. This would make RTDs a bigger online business than beer in the US.
“Spurred by the trend for the category in the market as a whole, the expansion of the US omnichannel and the prevalence of younger legal drinking age consumers in ecommerce, online sales of RTDs are expected to soar in the coming years,” said Wolfe.
Outside of RTDs, agave-based spirits and US whiskey are also seeing growth across ecommerce.