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Global alcohol sales recover in 2021

The global alcohol market rebounded last year, up by 12% in value to US$1.17 trillion, according to new data from IWSR Drinks Market Analysis.

Drinks-Glasses IWSR
IWSR Drinks Market Analysis data shows that total alcohol volume grew by 3% in 2021

The IWSR – Global Beverage Alcohol Rebounding briefing yesterday (7 June) revealed that the value growth of global beverage alcohol ‘significantly’ outpaced volume growth in 2021. The value of the global alcohol market fell by 4% in 2020.

Total alcohol volume grew by 3% in 2021, compared to losses of 6% in 2020. Also, the data supplier forecasts that the compound annual volume growth for total beverage alcohol will grow by 1% over the next five years.

Agave-based spirits were also placed under the spotlight by IWSR, as the category is projected to see a global value increase of 67% by 2026. In the UK, it is expected to jump by 88%, ‘albeit from a relatively low base’.

“Our latest data shows encouraging signs for the continued recovery of beverage alcohol,” said Mark Meek, CEO at IWSR Drinks Market Analysis.

“The market rebounded far more quickly than expected and, in value terms, 2021 is now above 2019. Premiumisation continues unabated; beverage alcohol e-commerce also continues to grow, although at a more moderate rate; and the trend towards moderation continues, with no/low-alcohol products seeing ongoing growth from a relatively low base.

“Despite the industry’s current and future challenges – ongoing supply chain disruptions, inflation, war in Ukraine, travel retail’s slow return to pre-2019 levels, and China’s zero-Covid policy – beverage alcohol is in a strong position.”

According to IWSR’s research, total spirits value increased by 15% in 2021, which was driven by consumers purchasing higher-end products, as well as experimenting with cocktail making from home during lockdowns.

The IWSR forecasts that spirits will grow by 5% in volume and by 15% in value by 2026.

Spirits categories

Whisky is expected to post an increase of 23% in volume and 29% in value by 2026, with an increase in activity particularly in its largest global markets, India and the US.

In the US, whisky is expected to be bigger than vodka by volume for the first time in two decades.

Meanwhile, global volume growth is expected for gin (up 24%), Cognac (up 23%) and rum (up 13%) over the next five years.

Premium-plus spirits, priced at US$22.50 and above, are projected to soar by more than 50% in value in the Americas between 2021-2026; by more than 40% in Africa and the Middle East; by more than 20% in Europe; and just less than 20% in Asia Pacific.

The ready-to-drink (RTD) category has seen a global volume increase by 14% in 2021, on top of 26% growth in 2020. Regarding volume, the category is now a third of the size of the global spirits category.

The RTD sector is expected to climb by 30% in volume in the next five years, driven by flavoured alcoholic drinks.

In the US, this growth trend is said to be propelled by the popularity of hard seltzers.

The low-and-no category rose by 10% in 2021, and is expected to continue to grow over the next five years. In the UK, the IWSR predicts a volume increase for non-alcoholic ‘spirits’ to be more than 80% by 2026, after the segment tripled in size in 2020.

Global alcohol e-commerce grew by 16% in value between 2020-2021, yet this was at a slower rate than the previous year, which saw an increase of 45% in value between 2019-2020.

“Resilient industry sector”

“Challenges remain, including whether bars and restaurants will continue to attract consumers who have grown comfortable with e-commerce and at-home consumption; whether consumers will accept price increases on their preferred brands; and whether inflation and supply chain issues will lead to consumers down-trading and gravitating towards local rather than imported products,” adds Meek.

“We’re living in an age of uncertainty, and these are uncharted waters for the industry. However, as we have seen in previous crises, this is a very resilient industry sector.”

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