Alcoholic Drinks: Quarterly Statement Q4

Baseline projections remain solid, minor upgrades paint more positive picture

While the forecast model provides constant updates on the latest macro factors and drivers, Euromonitor International’s initial forecasts remain strong, with only minor amendments in a small number of categories and markets.

Fittingly, other sparkling wine and champagne rise as two of the categories set to witness (minimally) improved performance

As macro-economic headwinds appear to have subsided, sparkling wines are gaining on the back of the built up momentum. Other sparkling wines are of even higher interest because they best positioned to capitalise on any significant downturn down the road, on the back of their ideal value-for-money proposition.

A severe US downturn, a hard Chinese landing and the no-deal Brexit scenario…

… remain the three key risk scenarios in the short to medium term. They all have the potential to be disruptive for their respective countries/regions but also for global alcoholic drinks sales. While initial estimates do not point to cataclysmic downgrades, the inherent danger of such scenarios should not be underestimated.

However, black swan events remain probable and geographic and product diversification are still essential

While current market forces appear to be favourable, downside risks have only been momentarily side-lined and cyclical macro headwinds will inevitably resurface in the short to medium term.