The COVID-19 pandemic has had a negative impact on beer in 2020 due to the worsening Algerian economy. As many Algerians have seen their incomes reduced and others have lost their jobs, declining disposable incomes are leading to less spending in several categories, including beer.
Due to the outbreak of COVID-19, hotels, restaurants, and bars have been forced to close, meaning on-trade consumption of beer has dropped drastically in Algeria in 2020. However, closure has not only hit beer in the on-trade outlets.
Total volume sales of beer will continue to be led by Groupe Castel Algerie in 2020 due to its longstanding presence in the category and its large brand portfolio, including Beaufort, Bavaroise, 33 Export, Beck's, Stella Artois, Golden and Castel Beer. It also benefits from its strong presence in all price segments, thereby offering a wide range of beers to appeal to a broad range of consumers, and from having the widest distribution of its locally-produced international brands, in particular its flagship domestic mid-priced lager brand Beaufort.
Beer will rebound from as soon as 2021, in line with the pandemic starting to come to an end. Nonetheless, total volume growth of beer is expected to be slower over the forecast period than during the review period due to growing maturity, increasing competition coming from wine and the expected declining purchasing power of Algerian consumers driven by growing inflation and ongoing economic hardship, particularly in the wake of the COVID-19 pandemic.
Over the forecast period, two main trends will be seen within beer. Firstly, the continued growth of non/low alcohol beer with a special focus on flavoured lager and the second is, the emerging potential of strong beer.
The off-trade channel will continue to dominate the distribution of beer going forward due to the ongoing restrictions on the sale of alcohol and the social taboo of drinking in public in a Muslim country like Algeria. The expected ongoing declining disposable income levels will further push people to consume beer off-trade as its prices are much cheaper than those in the on-trade channel.
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This report originates from Passport, our Beer research and analysis database.
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