A fall in volumes in 2023 suggests an end to post-pandemic momentum in alcoholic drinks. On-trade recovery has stalled, hampered by the impact of sustained cost of living pressures in addition to existing behavioural change. Distribution patterns also reflect rising demand for value for money. E-commerce growth has decelerated considerably even though online sales remain limited, but at the same time, digital transformation is becoming unmistakably evident across the industry.
This report comes in PPT.
The fall in global alcoholic drinks volumes in 2023 is a considerable downgrade from the previous two years. Post-pandemic momentum has faded, and the industry is grappling with the impact of sustained pressure on household finances. Encouraging signs suggest that the downturn may be short-lived; however, the global backdrop remains highly volatile. Geopolitical tensions, trade fragmentation, and climate change present significant risks to future growth.
Consumers are rethinking shopping habits to prioritise affordability. Warehouse clubs, centred on value for money, achieved the fastest offline channel growth over the past five years. Price concerns are aiding discounters too. However, distribution shifts have been subtle, and trading-down through categories has remained limited. The impact of cost of living pressures on alcoholic drinks is unmistakable, yet underlying demand themes still favour premium choices.
On-trade occasions are particularly vulnerable to consumer efforts to save money. Global on-trade volumes stand 10% below pre-pandemic levels, reflecting both current financial concerns and longer-term shifts in behaviour. Adaptation is vital in view of changing attitudes towards alcohol and socialising, plus the need to overcome the lure of lower retail prices. Opportunities lie in developing an added-value experience or accentuating the community role.
Alcoholic drinks e-commerce growth continues to decelerate as the pandemic impact wanes, and the channel accounts for only 3% of industry retail volumes. However, digitalisation of the wider path to purchase continues, accelerated by advances in generative AI. Digital services and experiences – personalised recommendations, immersive storytelling, events, or education – can help brands and retailers to establish lasting connections with consumers.
Alcoholic drinks is the aggregation of beer, wine, spirits, cider/perry and RTDs.
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