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European drinkers spend less on alcohol

New research has revealed how economic changes are affecting consumers’ spending habits on drinks, with Europe seeing the biggest cutbacks in alcohol consumption.

Europe’s alcohol beverage volumes are more likely to suffer than value over the next few months

Data collected by IWSR Drinks Market Analysis across 17 markets, including Australia, Brazil, Canada, France, the UK and the US, has revealed how consumer confidence in drinks spending is currently being impacted per region, according to countries’ economic climate.

Europe appears to claim the most cautious customers, according to IWSR, as rising living costs and inflation cause more to tighten their belts in the region.

In markets such as Germany and the UK, almost half of consumers claim they are choosing not to drink alcohol on at least some on-trade occasions.

Plus, the continent is seeing its overall budget down, yet individual category spend per unit up. The implication for the alcohol industry is that volumes are more likely to suffer than value over the next few months, said IWSR.

Meanwhile, Asian markets are looking more ‘buoyant’, with consumers in India and China having more consumer confidence than those in Europe.

IWSR has assumed this is a result of India’s ‘rapid recent GDP growth’, while China has seen a ‘post-Covid bounce back’.

In the US, the outlook is more ‘complex’, but consumers are remaining ‘relatively positive’. However, lower-income groups in particular are ‘showing signs’ of starting to feel the impact of inflation.

The report also revealed that younger consumers of legal drinking age are much more likely to be moderating their alcohol intake than older consumers.

Consumers in just under half of the markets surveyed said they are planning on using the on-trade less in the next four weeks than they did in the previous four weeks, while only one market (India) is reporting a net growth in planned on-trade usage.

Meanwhile, certain categories are seeing increased or steady consumption: drinkers of spirits such as whisky and Cognac, plus categories such as Tequila and Champagne, are much more likely to say they are spending more on those categories than drinkers of beer, ready-to-drink (RTDs) products and wine.

Plus, a trend of consumers waiting for discounts on their favourite brands has been marked by IWSR: in ‘most’ markets, between a third and 40% of consumers say they will wait for their favourite brand to be discounted before buying it, rising to more than 50% of consumers in markets such as Brazil, South Africa and Mexico.

While the latest research from IWSR shows that the premiumisation trend in beverage alcohol has not yet ‘been extinguished by economic headwinds’, the data analyst recently revealed that there are signs that value growth is beginning to slow.

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