The Impact of Coronavirus on Alcoholic Drinks

Delivery

This report comes in PPT.

Key findings

The situation is unprecedented, global in scale and multilayered

From the immediate yet expanding lockdowns dealing a catastrophic hit to on-trade sales to the ever-deepening ripple effects on the real economy in the mid term and the ultimate seismic long-term shifts in drinking rituals and occasions, the crisis will radically reshape the alcoholic drinks industry.

Beyond stockpiling and short-term statistical noise

While the initial focus has primarily been on knee-jerk, stockpiling-led spikes in consumption, it will be the medium- and long-term shifts that hold the greatest downside risks and glimmers of hope, if any . While the momentum of some of the trends identified in the past (such as online sales) will undoubtedly accelerate further, others (such as the premiumisation narrative) will need to be reassessed in their relevance and positioning .

What shape will the alcoholic drinks industry’s recovery take?

Initial suggestions and expectations regarding a V-shaped industry recovery are already proving to be overoptimistic since the disruption is only expanding further geographically and in terms of timelines. A U-shaped , slow and gradual industry recovery now increasingly appears to be the most likely scenario, with China providing a template for that roadmap. Nevertheless, an L-shaped , recessionary-induced alcoholic drinks sales collapse, followed by a period of stagnation, cannot be ruled out.

A shift from the physical to the virtual

While initiatives embracing virtual tours or tastings, the, admittedly hesitant, rise of hometainment and the slow but steady rise in penetration rates for online and mobile sales of alcoholic drinks were all there before the crisis, circumstances have brought them to the forefront. They will provide the platform needed to maintain equity and a sense of community in the months ahead.