Alcohol sector to hit $2tn by 2031
The global alcohol category was valued at US$1.6 trillion in 2022 and is set to increase by a compound annual growth rate (CAGR) of 2.5% by 2031, a new report revealed.
Straits Research has released its report Alcoholic Beverages Market: Information by Distribution Channels (Supermarkets, Liquor Stores, Convenience Stores, Grocery Stores, and Online Retail), Type, and Regions-Forecast Till 2031.
In the report, the firm projects the global alcohol market to reach a value of US$2tn in eight years’ time, a CAGR increase of 2.5%.
This boost in value for the market will be driven by rising demand and an increase in the young adult population, the company said.
The market is currently ‘prospering’ due to innovations and developments in the production of vodka, cocktails, flavoured wine and beer. Spirits was found to be the second most-dominating category, following beer.
The industry has also benefited from the increasing trend of socialising and mid-week/weekend gatherings among young and working professionals, Straits Research found.
In urban areas, rising disposable incomes, late-night socialising and high-pressure jobs has led to a boost in alcohol consumption.
Non-alcoholic and energy drinks may ‘threaten’ alcohol brands as consumers’ perception of health influences their buying decisions, the firm said.
The growth of alcohol purchases in the supermarket segment can be attributed to partnerships between retailers and ‘significant players’ in the global alcoholic drinks industry.
While the fastest-growing market was found to be America, the largest market was pegged as Europe.
In Europe, Straits Research cited Eurostat to point out that more than one-third of Europeans aged 15 and over consume alcohol at least once a week.
Furthermore, the UK has a higher demand for alcohol, with 45% of respondents drinking once a week, compared to 41% in Ireland and Luxembourg, and 40% in Germany and Denmark.
In North America, which makes up a ‘significant’ portion of the market, a factor driving market expansion for the alcohol segment is product innovation.
In addition, whisky is expected to grow by 3.2% by 2031 in the US.
In the Asia Pacific region, there is growing demand for alcoholic beverages, and the market is expected to grow ‘rapidly’ there, at a CAGR of 2.5% by 2031.
The region is currently experiencing an increase in alcohol use as a result of changing lifestyles, greater disposable money, and a relatively young population, Straits Research noted.
Finally, a surge in demand for alcohol in the duty free retail segment will see the category in Africa grow significantly in the future, Straits Research expects.
In Latin America, Mexico and Brazil are among the leading consumers of alcohol.
The company also listed the top 20 alcoholic beverages segment manufacturers, which includes Halewood at number four, Bacardi at number five, and Pernod Ricard at number eight.
Earlier this year, a research firm reported that the ready-to-drink category is set to see 11.43% year-on-year growth in 2023.