Asia Pacific alcohol sales to grow 2% in 2021

Alcohol sales in Asia Pacific are predicted to rise by more than 2% in volume by the end of this year, and could return to pre-Covid levels by 2025, according to data from IWSR Drinks Market Analysis.

The IWSR expects the retail value of alcohol in the region to increase by more than 4% by end of this year.

The analyst looked at 19 markets across Asia Pacific, and found that total beverage alcohol volume in the region fell by about 8% in 2020.

Apart from wine, each major alcohol category is forecast to post volume growth in the region, with spirits increasing 0.5% and the ready-to-drink (RTD) sector up 6% (CAGR 2021-2025). Beer is predicted to rise by 2% and cider will grow by 1%.

“Though an unprecedented downturn, the decline in beverage alcohol in Asia Pacific was less than previously forecast, as several factors ultimately helped the industry last year,” said Sarah Campbell, research director for Asia Pacific at IWSR Drinks Market Analysis.

“The acceleration of e-commerce, growth of RTDs, strong at-home consumption in key markets, and the resilience of countries such as China and Australia, will underpin the region’s growth going forward.”

The IWSR noted that travel retail reported a 70% volume loss in the region last year due to Covid-19 restrictions on travel. Volume in the channel is predicted to rise by more than 50% in 2021.

Performance by country

By market, IWSR said Australia’s alcohol sales grew by about 3% last year, the highest of any Asia Pacific market. IWSR forecasts that the alcohol market in Australia – predominantly an off-trade-focused one _­­­­– will ‘soften slightly’ over the next five years. Spirits and RTDs were the two categories that experienced the largest volume gains in 2020, while beer rose by 3% and wine declined.

China’s alcohol sales fell by almost 6% in 2020 due to its reliance on the on-trade, but it is predicted to rise by nearly 4% this year. IWSR noted the positive performance of flavoured spirits and RTDs, as well as single malts, the latter of which rose 20% in 2020.

However, spirits in total fell 5% last year. The category dropped 3%, excluding national spirits such as baijiu. Online sales of alcohol in China are predicted to continue growing over the next five years, IWSR said.

As a result of the lockdown in India last year, total alcohol volume plummeted 30%, but the market is expected to rebound to more than 8% volume (CAGR 2021-2025). Spirits are predicted to rise by nearly 5% over the four-year period, while beer will increase by 13%.

Whisky sales in India declined by 16%, but the IWSR noted that ultra-premium-and-above Scotch witnessed growth, along with Irish and Japanese whiskies, where were boosted by rich consumers.

Total alcohol sales dropped by 5% in Japan last year, with the market predicted to bounce back to pre-Covid volume levels by 2024 with a 2% boost (CAGR 2021-2025).

The RTD sector in Japan, which makes up around 20% of the global RTD market, rose by close to 12% last year. The country’s RTD sector is expected to grow by nearly 6% in volume (CAGR 2021-2025).

The Philippines alcohol market declined in 2020 and is expected to post a volume increase of 7% in 2021, returning to pre-Covid levels by 2023.

Spirits rose by 2% in 2020, led by gin (up nearly 7%). The IWSR said this was noteworthy due to the Philippines being the world’s largest market for gin. Wine rose 3% and beer declined in 2020.

Singapore’s alcohol market fell by 9% in 2020 due to beer, which makes up more than 80% of beverage consumption in the country. IWSR forecasts that total alcohol volume in the market will increase by about 4% (CAGR 2021-2025), returning to pre-pandemic volumes by 2022.

Meanwhile, Thailand, which is heavily reliant on western tourists, reported a ‘resilient’ spirits market during 2020 as a result of innovation and off-trade dominance, the IWSR said. The IWSR forecasts that total alcohol will experience a 4% CAGR growth between 2021 and 2025, led by beer, wine and RTDs.