Business a.m.
The global alcoholic drinks market experienced a total volume decline for only the third time in 15 years in 2023, according to data analytics firm Euromonitor International.
The alcoholic drinks market saw a slight dip in total volume of 0.2 percent, challenged by a variety of factors including inventory adjustments, pantry unloading in the US, geopolitical turmoil affecting consumer sentiment worldwide, inflationary pressures in western markets, and a structural slowdown in China.
Commenting on the report, Spiros Malandrakis, head of alcoholic drinks research at Euromonitor International, said: “The industry entered negative territory, a rare occurrence, highlighting the severity of the perfect storm facing it.”
In Euromonitor’s World Market for Alcoholic Drinks 2024 report, Malandrakis highlighted the far-reaching transformations and challenges confronting key categories. The category of “other ready-to-drinks (RTDs),” primarily representing Hard Seltzers, and cognac saw total volume declines of 16.6% and 9.5 percent respectively, establishing them as the worst performers in the market.
“As the no/lo alcohol aisles and bar shelves get increasingly more crowded, opportunities in this segment will shift towards functionality, moving beyond brand extensions to embrace unique compositions that push the limits of experimentation, resonating strongly with younger Millennial and Gen Z demographics.
“Conversely, spirit-based RTDs posted 8% total volume growth, all nascent non-alcoholic categories booming and other sparkling wine capitalising on trading down from champagne, rise as some of the best performers while proving that pockets of growth are still there for the taking,” Malandrakis stated.
According to head of alcoholic drinks research at Euromonitor International, both off-trade and on-trade performance exhibited significant deceleration, effectively losing much of the strong momentum that propelled the post-pandemic rebound and resulting in a 0.7 percent volume decline in the off-trade and a comparatively modest one percent volume growth in the on-trade.
“As the post-pandemic effervescence driving the industry fades, 2023 becomes reminiscent of a well-balanced Negroni. Decidedly bitter notes – as macroeconomic and geopolitical volatility take their toll – find equilibrium against the herbaceous hints of green shoots of cautious optimism.
“While numerous short-term downside risks remain and most categories and markets are still under pressure, alcoholic drinks appear to be turning yet another corner and proving resilient in the face of a state of permacrisis. There are challenges ahead,” Malandrakis concluded.
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