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Demographic and Social Shifts Boost Alcoholic Drink Sales

2/14/2018
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The size of the youth population is often a good barometer in determining the success of global trends in a market. Younger consumers are more likely to socialise in on-trade establishments and enjoy bottled alcoholic drinks, particularly as disposable income levels rise and urban centres grow. In addition, the young typically have an established enthusiasm for festivities and celebrations involving drinking. In this respect these five Asian markets offer great potential, with the median age of the population below 30. For example, the median age in Cambodia is 24, while in Laos it is 23. The only notable exception is Bangladesh, where demographic trends are having no positive impact on demand for alcohol due to consumption being banned for the Muslim majority.

In addition to the young, an emerging middle class and government clampdown on illicit trade are other factors shaping the alcoholic drinks market in these countries. In Myanmar and Cambodia there are growing middle-income groups who are now able to afford bottled alcoholic drinks. In Laos and Sri Lanka, low-income consumers, the most significant consumer group for alcoholic drinks, are shifting from illicit drinks and economy spirits to beer due to tax shifts and government clampdowns on contraband.

In addition, attitudes to female drinking are changing. Historically, it was not socially acceptable for women to drink alcohol or for women to work in bars or other on-trade establishments. However, in Cambodia, Myanmar and Sri Lanka, young and middle to upper-income women in major cities are increasingly purchasing alcoholic drinks. This new generation of women enjoy socialising with friends in bars and nightclubs, though they typically opt for lower-strength beer rather than spirits. These establishments even seek to attract such women with free entrance or discounts on food and drink products.

But while tradition and religion continue to play a decisive role in these countries, particularly with large Muslim and Buddhist communities, where drinking alcohol is frowned upon, the impact of global drinking trends and increased tourism are having a positive effect on the market. Moreover, there is a strong and well-established presence of artisanal spirits among the indigenous communities, for example in Bangladesh where Hindu communities mainly drink keru beer and bangla spirits. Artisanal alcoholic drinks are widely available in these countries, and are often affordable. For example, in Cambodia palm and rice wines can be purchased easily from market stalls, street hawkers and on-trade establishments.

In Laos a major portion of the alcohol consumed is artisanal, a fact which is linked to the country’s strong agricultural industry and cultural traditions. The artisanal spirit lao lao, usually brewed from rice, is widely produced and consumed. In Myanmar, artisanal alcoholic drinks are also widely available, with popular options including toddy, produced from fermented palm sap, and shwe le maw, a strong type of artisanal spirit. In Sri Lanka, artisanal drinks are particularly popular among low to middle-income men. These include toddy and kasippu, colourless spirits generally produced from tree fruit, though fortified with ethanol.

Euromonitor International expects a flourishing alcoholic drinks market in emerging Asian economies over the next five years as these markets develop and embrace more global trends. Sales will continue to benefit from the overall economic growth of the region, particularly as disposable incomes rise and people socialise more. Moreover, low-income consumers are expected to trade up from artisanal and illicit alcohol to packaged products via more formal channels, while mid to upper-income consumers look to premium options. Alcoholic drinks manufacturers should consider the potential of these often overlooked markets, while balancing any strategic approach with a respect for the religious and traditional cultures.

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