Due to the outbreak of COVID-19 in 2020, total volume sales of beer fell, mainly driven by an on-trade volume decline of 25%, which compares to a marginal on-trade volume decline the previous year.
As the largest beer category, standard lager experienced one of the heaviest impacts of on-trade closure in 2020, as it generates by far the most sales through the on-trade. However, its resulting pick-up in retail as drinkers shifted from the on-trade, allowed for 1% off-trade growth overall in 2020, with Latvians choosing to drink at home rather than in pubs and bars.
While on-trade volume sales posted a decline, off-trade sales saw heightened growth compared to the previous year. With many on-trade establishments closing, while many consumers were too fearful of socialising in venues that were open, retail became the key channel to obtain beer during 2020.
Across the forecast period, beer is set to continue recording a total volume decline, with the decline being even more significant in 2021 than in 2020. Although the on-trade is set to record growth in 2021, ongoing COVID-19 restrictions are expected to dampen sales, limiting any higher levels of growth.
In 2021, it is expected that a significant amount of beer not sold through on-trade establishments as a result of lockdown will be thrown away, with operators having to take a considerable hit in profits. The lack of cashflow might negatively impact innovations and category development within the short term.
Health and wellness trends will continue to influence beer over the forecast period, with more producers set to offer non-alcoholic versions of customers’ favourite beer brands across the coming years. This category was the most dynamically growing in 2020 within overall beer, despite the outbreak of COVID-19.
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