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IWSR: spirits and RTDs take share from wine
Spirits and the ready-to-drink (RTD) category are expected to gain share of the global alcohol sector at the expense of wine, according to IWSR.
IWSR revealed spirits (excluding national spirits) had a 30% share of the global alcohol sector in 2023, while wine held a 15% share. Beer retained the biggest share at 52%.
By 2028, IWSR forecasts spirits will increase slightly to hold a 31% share, while wine will have a 14% share. Beer’s share is expected to remain the same, while the RTD category could have a 3% stake within the next five years.
Including national spirits, the spirits sector had a 39% share of global alcohol sales in 2023, wine had a 13% share, and beer had a 45% share.
Emily Neill, chief operating officer of market research at IWSR, said: “The spirits sector – and beverage alcohol – is facing a softening of demand as cost-of-living pressures mount in major consumption markets. The industry is also focused on unwinding inventories in key categories, such as Cognac and Scotch. Many consumers are opting to moderate their alcohol consumption to account for the squeeze on disposable incomes, as well as shifts in lifestyle choices.”
Biggest markets for alcohol
In terms of the biggest markets for alcohol, spirits are gaining share in the US, Italy and France, and losing share in markets such as China (including national spirits) and Brazil, IWSR noted.
Growth in the US, is being led by agave spirits, as well as flavoured spirits. However, IWSR also predicts demand for categories such as American whiskey will return as disposable incomes and consumer confidence improve, alongside the industry reducing inventories.
Speaking about the Italian market, Neill noted that gin grew by 3% in volume there last year. The category has suffered major losses in key markets in the past year such as the UK (down by 14%) and Spain (down by 11%).
Whisky and rum are predicted to post positive volume increases after declines in 2023, the IWSR highlighted.
Within Italy, whisky is expected to rise by a compound annual growth rate (CAGR) of 2% between 2023-2028, and rum could grow by 4% over the same period.
In France, growth will come from categories including vodka (up by 2% volume CAGR 2023-2028) and gin (up by 3%).
IWSR data shows that total beverage alcohol (TBA) volumes in China grew marginally between 2022 and 2023, as losses for spirits (down by 9%) and wine (down by 14%) were offset by increases for beer (up by 3%) and RTDs (up by 1%).
Chinese spirit baijiu declined by a CAGR of 10% between 2017 and 2022, with a 4% drop predicted for 2022-2027. However, ultra-premium-and-above baijiu is expected to rise by 7% between 2022 and 2027.
Neill noted that national spirits will drive most of the volume declines in the spirits market in China, led by products in the lower price tiers.
“Excluding national spirits, the brandy and whisky categories saw declines last year, but growth momentum is expected to pick up in the following years,” she added.
Meanwhile, IWSR data from June showed that global TBA declined by 1% by volume but rose by 2% in value last year. Spirits volumes were flat last year while beer dipped by 1% and wine was down by 4%.
Indian whisky is set to be the fastest‐growing spirits category between 2022 and 2027, set to grow by 50 million cases, with Tequila, rum and gin all expected to rise between 10m and 20m cases. Cognac and Armagnac are the subcategories set to grow the least.
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