Beer Expected to Rebound Better than Wine and Spirits
Globally, beer (not including flavored malt beverages like hard seltzers) grew 0.3% in volume and+2.2% in value in 2019, led particularly by increases in non-alcoholic beer (+15.2% in volume, vs. 2018). Though the beer category has taken a hit in 2020, the outlook for continued growth of noalcohol beer remains positive, with a forecasted +8.1% CAGR 2019-2024. In total, beer is expected to reach 2019 volumes by 2024, rebounding better than wine and spirits.
Increasingly Less Tied to Celebratory Moments, Sparkling Wine Outshines Still Wine
The long-term global decreases in wine consumption continued in 2019, posting a -1.1% volume decline (though value was slightly up, at +0.6%). In the key consuming region of North West Europe, wine volumes have been slowing at a rate of -1.6% CAGR 2014-2019, and in the US, wine consumption last year declined for the first time in 25 years. One bright spot in the category, however, is sparkling wine which posted growth of +1.4% volume, and +3.6% value in 2019, and is forecasted to rebound stronger than still wine by 2024, as consumers increasingly shift to year round consumption of these products.
Spirits Drop -2.5% in 2019; Whisky and Gin on Pace to Recover Fastest
Overall, total spirits dropped -2.5% in volume last year, due in part to steep volume losses in baijiu (a spirit consumed almost entirely in China). Excluding baijiu, however, global spirits volume grew +1.0% in 2019. No-alcohol spirits were the fastest-growing spirits segment by volume in 2019, +25.5%, though still small in terms of market share (and of note, 2018-2019 was the first period that IWSR began tracking the no-alcohol spirits category). Amongst traditional spirits categories, gin was the fastest growing in 2019 (+6.1%), but that growth has slowed somewhat as consumers are beginning to show signs of “gin fatigue,” especially in some European markets (growth of gin globally was +9.6% in 2018). Within the whisky category, Irish grew by +10.6% volume, Japanese increased +10.3%, and US whiskey posted +5.8%. The IWSR forecasts that whisky and gin will likely rebound fastest to pre-Covid-19 levels. Vodka volumes are not expected to recover to 2019 levels until after 2024.
Ready-to-Drink Poised for Continued Grow, with Hard Seltzers Trending Strongly in the US
For the third consecutive year, ready-to-drink (RTD) products in 2019 were the fastest growing beverage alcohol category, up +19.6% in volume and +18.8% in value. Even though RTDs only represent a small slice of beverage alcohol market share, they contributed more than double the value growth to the industry than wine in 2019. Much of this interest and growth in the category is fueled by the innovation and convenience of hard seltzers in the US, which last year grew by over +200% in volume. The global RTD category is forecasted to grow by +7.2% volume CAGR 2019-2024.
Ecommerce, Already Growing Pre-Covid-19, Becomes Even More Important
Beverage alcohol ecommerce posted gains last year, which should be welcome news to brands battling current challenges brought by Covid-19. Across 16 key markets studied by the IWSR, all beverage alcohol categories in 2019 grew in value faster online versus the total market. Bee e-commerce value grew +14% (vs +1% growth for the total market value), wine grew +18% (vs. total market decline of -1%), and spirits grew +15% (vs. total market growth of +6%). Based on an ecommerce study published last year by IWSR, the value of the channel at the time was US$21bn (across 10 core markets), which is almost twice that of global travel retail, pre-Covid-19.