Alcoholic Drinks: Quarterly Statement Q1 2021

Delivery

This report comes in PPT.

Key Findings

Original baseline forecasts see only minimal changes

Reflecting the timeline of a gradual reopening of society, the step-by-step ending of lockdowns and a return to some degree of normality in the second half of 2021, our top line projection has only seen a marginal overall downgrade.

However, over the past year, and including previous quarterly updates, a small number of key amendments did take place

From the severe downgrades in total volumes sold in South Africa, on the back of the introduction of draconian complete sales bans on alcohol, to the upgrading of total forecast sales in Russia, based on skyrocketing sales in the off-trade, fuelled by special offers and lockdown-induced extra discretionary incomes, without an alternative outlet, some changes were introduced. Most importantly, these can provide key learnings that are relevant beyond the country of their respective focus.

One of the most notable upgrades is in the Philippines, and it might have implications for many other markets

Revisiting off-trade sales of rum in the Philippines according to the latest available information, and local company and media reports, the forecasts have been significantly upgraded. The category’s affordability and historically embedded position in the country’s drinking culture turned from a downside risk to a trading down opportunity almost overnight. A similar pattern highlighting the potential for local specialties should be expected in other markets as well.

On trade recovery: Risks skewed to the downside but cautious optimism is evident

While our fundamental baseline of a beginning of the on-trade recovery in the spring and second half of 2021 has not changed, the industry is by no means out of the woods just yet. Delays in the rollout, uptake or efficacy of the vaccines, the potential for fresh mutations and flare ups and the inevitable demise of a significant number of hospitality establishments after more than a year of severe disruption will continue exerting strong pressure in the short to medium term.