Distribution Channels in Alcoholic Drinks

Alcoholic drinks in 2017: drinks all around?

2017 saw global alcoholic drinks volumes return to growth–albeit marginal –following two successive years of decline. The alcoholic drinks industry’s global volume growth may not appear positively intoxicating at first glance but, at 1%, this is actually its strongest performance in half a decade.

Stores: led by Western Europe, modern grocery remains unchallenged

Modern grocery is the largest alcoholic drinks channel by quite some margin, and leads distribution across all categories. Western Europe is the most developed region for the channel; modern grocery retailers have wide-ranging reach in many Western European markets as a result of well-developed supermarket landscapes.

Non-store: still just a shot, but rapidly changing the retailing cocktail

Internet retailing witnessed the fastest channel share rise in alcoholic drinks over 2012-2017. The ubiquitous and ever-widening penetration rates of special apps, the clout of major third-party online retailers and, most recently, initiatives from key alcohol giants, will provide huge momentum for the segment going forward.

Other channels: brewpubs tap in to the on-trade opportunity

In many markets financial pressures are leading consumers to reduce socialising outside of the home. This underlines the importance of including an additional element to drive on-trade appeal; brewpubs are a promising example of this. They allow brewers to benefit from the interest in experiential drinking occasions, while highlighting the genuine “craftsmanship” that goes into their products.

The future: potential pitfalls loom despite positive projections

Global alcoholic drinks are expected to see a rise in both volume and value terms over 2017-2021, with all of the major categories contributing to growth. However, while future volume growth projections do look intoxicatingly buoyant, considerable risks remain. Volatility will be part of the mix.