On-trade sales of beer collapsed in 2020 as Coronavirus (COVID-19) led to the closure of bars, pubs and restaurants. While off-trade sales continued increasing, picking up some of the lost on-trade sales, the size of the on-trade decline as well as the loss of social occasions due to lockdowns meant that total volume sales were falling in 2020. Beer will immediately return to recording positive annual growth rates from 2021, albeit relatively modest ones.
A strong decline in on-trade sales in 2020 meant that, despite the positive growth in the off-trade, total volume sales of beer were falling after two years of positive growth. The forced closure of foodservice outlets as well as a sharp reduction in social occasions due to lockdowns/quarantines meant that sales of beer were down year on year across most of the region.
Although still only a relatively small category in Eastern Europe, non-alcoholic beer was the most dynamic product area in 2020, with this expected to continue to be the case over the forecast period. A rising number of both flavoured and non-flavoured variants have been appearing in recent years, with more likely to follow in the 2020-2025 period.
Smaller players, such as craft breweries, were generally badly hit by COVID-19, as they often rely heavily on sales in the on-trade. In addition, there was downtrading in some countries as well as a trend for consumers to stick with the well-known brands of the large producers. This led some small breweries in Ukraine, for example, to postpone their plans to expand their production capacity, while the worst-hit were forced to close down for good.
Although many consumers in the region will still be faced with constrained purchasing power in the immediate future, off-trade sales will continue to rise over the forecast period, while on-trade sales will return to positive growth rates from 2021. However, the on-trade will not be able to recover all the sales it lost in 2020 before the end of the forecast period, despite seeing dynamic rates in the next couple of years.
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