Global alcoholic drinks volumes have almost returned to pre-pandemic levels. However, there is little respite to be found, as brand owners are now facing the prospect of slowing demand driven by prolonged macroeconomic headwinds. Looking ahead, companies are working towards product diversification, and as moderation trends take hold, non-alcoholic developments are gathering momentum. The digital space is slowly but surely gaining significance in consumer outreach.
This report comes in PPT.
The competitive landscape shows significant consolidation at the total level; the top 10 players account for over half of alcoholic drinks volumes, driven primarily by beer. The nature of competition across the industry is gradually shifting, as maturity and changes in consumer behaviour prompt companies to diversify and seek opportunities outside their traditional areas of specialisation.
Top companies have broad portfolios covering many price points, which provides advantageous flexibility when consumer finances are under pressure. With macroeconomic clouds gathering, a slowdown in premiumisation rates is expected. However, long-term trends in drinking habits (“less but better”) remain intact, hence the ongoing focus on the upper end of product ranges. Heritage, ingredients and sustainability cues offer all-important opportunities for adding value.
Continuing their ascent while much of the industry struggles, spirit-based RTDs are a focus for innovation and acquisitions among beer and wine producers, as well as those in spirits. RTDs are also the main entry point for soft drinks giants taking tentative steps towards alcohol. While the category is primarily associated with the single-serve format, and will remain so, sharing cocktails that target home socialising are on the rise. The on-trade offers scope for growth too.
E-commerce accounts for a low share of alcoholic drinks retail, and growth has, unsurprisingly, slowed since the height of the pandemic. Nevertheless, digital sales and engagement are gaining ever greater strategic importance. Companies are expanding website- or app-based platforms and stepping up digital and phygital outreach as consumers become increasingly comfortable researching, shopping and interacting with brands online.
Alcoholic drinks is the aggregation of beer, wine, spirits, cider/perry and RTDs.
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