COVID-19 negatively impacted beer consumption, with total volume sales seeing a double-digit decline in 2020. However, it was the on-trade that suffered the most.
Due to the economic crisis brought about by the measures taken to control the spread of COVID-19 in the country, many consumers became more price-sensitive. Therefore, downtrading was seen in beer, with premium lager seeing the strongest total volume decline, followed by mid-priced lager, with economy lager actually seeing a slight sales increase.
At a significant distance from its competitors, Fábricas Nacionales de Cerveza (FNC) continued to lead beer in Uruguay in total volume terms in 2020, and even managed to extend its lead. It offers well-known brands such as Pilsen, Norteña and Patricia, amongst many others, and has strong distribution both off-trade and on-trade throughout the country.
Total volume sales of beer are expected to return to growth in 2021 and throughout the rest of the forecast period, with growth seen both on-trade and off-trade. However, on-trade recovery is set to take some time, and a return to the level of sales seen before the pandemic is not expected until 2024.
Despite COVID-19 and the shift in consumer behaviour to favour cheaper products in 2020, the premiumisation trend is expected to return and expand over the coming years. Some consumers will not be as badly affected by the economic impact of the pandemic and will value high quality and new consumption occasions.
The health and wellness trend is leading more people to become more aware of their health, and they are taking steps to ensure they are living a healthy lifestyle, especially in light of COVID-19. An ageing population, combined with the health-forward attitudes of millennials and gen Z, will lead more people to consider reducing the amount of alcohol they consume, which can be seen as harmful.
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