Global outlook for alcoholic beverages

Posted by Isobel Drake on 6th July 2009

Consumer drinking in bars, pubs and restaurants has been subdued around the world this year, but some alcoholic beverages have managed to maintain growth rates with the assistance of a robust ‘at-home’ market.

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In an analysis of the global alcohol industry, researchers Euromonitor International see beer – led by domestic options – as the best performing sector and premium spirits and wine as the most threatened.

“Global alcoholic drinks volume growth is slowing down due to the global economic downturn but significant contraction is not expected in the short to medium term,” the researchers advised. “Global alcoholic drinks’ value growth throughout the crisis years will be affected more dramatically than volume in the short to medium term as most consumers are switching to cheaper alternatives, with spirits and wine prices suffering the most.”

Alcohol has long been considered one of the more recession-resistant products as consumers drown their sorrows and attempt to forget about the pain of the markets by having a good night out (or night in). The severity of this recession has seen premium alcohol beverages come under intense pressure in most ‘westernised’ markets, although premium beer has continued to outperform here in Australia. Meanwhile, a slowdown in the consumption of wine is mostly expected in Australasia, Eastern Europe and North America, while the majority of spirits volume corrections are anticipated in Australasia and North America, according to the research.”On the whole advanced economies will see a more dramatic decline in volumes of alcohol consumption as the economy worsens, and consumers trim their spending, but it is expected that these declines will be short lived and the market will start recovering at the end of 2010,” Marlous Kuiper, Industry Manager of Alcoholic Drinks at Euromonitor International, said. “It is possible that 2011 could see steeper growth than originally forecasted, compensating for consumers’ belt tightening period.”

On a global basis, volume growth for beer is expected to be between two and three per cent this year and between one and two per cent in 2010. Wine volume growth is anticipated to be 0.5-1% both this year and next, while spirits are forecast to rise by 0.5-1% in volume this year and between one and two per cent in 2010.The volume rises are likely to be led by developing economies like China and India.