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On-trade revival drives global alcohol sales
According to IWSR Drinks Market Analysis, alcohol consumption in the on-trade is up year on year, despite a growing trend for moderation.
The data is taken from IWSR’s Bevtrac Wave 2 2024, a longitudinal tracker of consumer behaviour for total beverage alcohol (TBA) across 15 key markets: Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, Mexico, South Africa, Spain, Taiwan, the UK and the US.
The report follows news that global spirits volumes were flat in 2023.
IWSR noted that on-trade visits were particularly increased for American millennials, with Scotch and liqueurs two of the biggest beneficiaries.
Ivana Mitic, senior insights manager for Bevtrac at IWSR, said: “The on-trade is a key driver of growth, and its slowdown, driven by price increases and changes in consumer behaviour, has hampered TBA as a whole.
“IWSR’s latest Bevtrac data shows a growing revival in the on-trade for some markets, offering a much-needed boost for the industry. As consumers return to bars and restaurants, we see a renewed focus on premium experiences and diversified offerings, laying the groundwork for future growth.”
Growth by market
IWSR added that despite improvements in real incomes, consumer uncertainty and the continued rise of moderation have hampered alcohol volumes and spend.
It added that consumer confidence is recovering in the US, Europe and Latin America, while generally stable elsewhere.
TBA volumes have ‘registered growth’ for the first half of 2024 in developing markets including India (up 4%), Brazil (up 4%) and South Africa (up 5%).
In India, it attributed this growth to a ‘confident urban middle class’ and a younger cohort that trials new categories, while Brazil and South Africa were noted as having an improving economic sentiment and a growing appetite for the on-trade.
“The global beverage alcohol market is experiencing a period of profound change. Moderation is becoming ingrained in consumer habits, while no-alcohol offerings and premium categories are gaining traction,” added Mitic.
“Understanding these shifts and the impact to behaviour in the on- and off-trade is essential for adapting in an increasingly competitive market.”
Moderation is on the up
Moderation levels have been falling in the 15 markets since April 2023, especially in the US, China and India, with drinkers more likely to reduce consumption than to abstain.
‘Light drinkers’ have become the biggest group in terms of consumption levels in Europe, North America and Asia Pacific.
IWSR also noted a growing interest in non-alcoholic products, with more than a quarter of drinkers consuming these products in the past six months.
Per-person consumption of non-alcoholic products is rising in North America, India and China, with North America’s figures doubling year on year.
Germany and Spain have the highest penetration rates for no-alcohol products (40%), while in the US, no-alcohol spirits are gaining traction.
IWSR added that premiumisation persists, with single malt Scotch and Cognac experiencing growth in India. Typical spend per bottle grew by more than 20% year on year.
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