Alcoholic Drinks: Quarterly Statement Q3 2021

September 2021

This briefing examines Euromonitor International’s Q3 2021 alcoholic drinks forecasts, which have been updated in accordance with new macroeconomic data and the latest information. The top line forecast has been revised upwards slightly this quarter compared to the baseline projection, supported by an improved outlook in Brazil. The path to recovery remains uneven, with expectations in other key markets downgraded, amid new virus outbreaks and government restrictions.

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Key Findings

Slight upwards revision to mid-term top line forecast this quarter

Euromonitor International’s latest top line alcoholic drinks forecast has been revised upwards slightly for 2022 onwards in the latest quarterly update compared to the baseline published in May 2021. There has, however, been virtually no change to projected total volume growth for 2021, which remains at 2%. A gradual recovery from 2021 is expected to result in total volumes returning to 2019 levels by 2023.

Downgrades reflect the widespread potential for further setbacks

A number of key markets have seen notable downgrades this quarter, illustrating the uneven nature of the path to recovery. Reasons for revised forecasts include much of Southeast Asia battling severe virus outbreaks, the introduction of another alcohol ban in South Africa, stringent lockdowns in Australia, and the devastating impacts of the second wave (and potentially the upcoming third wave) of COVID-19 in India.

Brazil leads upgrades as vaccine roll-out advances

On the other hand, some forecasts have been revised upwards. Brazil is the most significant example. An accelerating vaccine roll-out is fuelling improved prospects in Brazil from 2021 onwards, following an already resilient alcoholic drinks performance (largely through beer) in 2020.

A mix of continued pressure and positivity for the on-trade

The timing of the on-trade recovery is a key question for the industry. Hospitality remains at the centre of many new or extended government restrictions. Lasting changes in consumer habits are expected to drive more varied socialising patterns, with home consumption cementing its place as a key theme within alcoholic drinks. However, there are early indications of a surge in demand following on-trade re-opening, driven by consumers’ desire to reconnect and return to out-of-home experiences.

Introduction

Scope
Key findings

Q3 Alcoholic Drinks Update

Slight upgrade to mid-term top line forecast this quarter
Markets in Southeast Asia see the largest downwards revisions
Accelerating vaccine roll-out drives improved outlook in Brazil
Mapping on-trade recovery progress
India: considerable downgrade in a strategically significant market
Non-alcoholic beer: targeting new occasions
Ongoing potential in tequila

Q3 Macroeconomic Update

Strong global economic recovery underway
Downside risk factors remain significant
Real GDP annual growth forecasts and revisions from last quarter, AE
Real GDP annual growth forecasts and revisions from last quarter, EMDE

About Our Industry Forecast Model

Euromonitor International and COVID-19: Forecasts and analysis
Alcoholic drinks COVID-19 data and reporting timeline
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