Total alcoholic drinks volumes have almost reached pre-pandemic levels, but an adjustment is evident in the channel balance; retail is on the rise while on-trade recovery is still underway. Macroeconomic pressures and long-term socialising changes are reshaping purchasing patterns. E-commerce accounts for a very limited share of global sales, but digital developments remain a strategic priority. What are the prospects for alcoholic drinks as the distribution landscape continues to evolve?
This report comes in PPT.
Global alcoholic drinks volumes have almost reached pre-COVID-19 levels. However, the industry has not simply returned to its previous state - the on-trade is only due to recover from the devastating impacts of the pandemic towards the middle of the forecast period. By contrast, the off-trade continues its global rise, even as consumers embrace the return to bars and restaurants.
Producers have been passing on their higher input costs, driving up unit prices, at the same that disposable incomes are being squeezed. Even so, trading down within categories, whether to other brands or private label, has been limited so far. That may change in some markets as macroeconomic pressures continue. Moving some occasions from the on-trade into the home is already becoming more common as cash-strapped consumers look to reduce their outgoings.
The on-trade is vital to value generation in alcoholic drinks. However, the channel is contending with a host of difficulties across much of the world. Venues and producers need to adapt to long-term shifts in socialising requirements; sophisticated non-alcoholic offers are increasingly expected, and to overcome the financial and practical benefits of staying home, providing an experience, rather than just a setting, is more important than ever.
E-commerce growth has slowed significantly since the pandemic-driven peak of 2020, and the channel accounts for just a low-single-digit share of retail. However, the digital space continues to gain importance. Emerging technology such as augmented reality and blockchain has seen some uptake. Greater disruption may be on the horizon as producers and retailers explore the use of artificial intelligence to advance engagement and personalisation.
Alcoholic drinks is the aggregation of beer, wine, spirits, cider/perry and RTDs.See All of Our Definitions
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