IWSR slashes global online alcohol sales forecast
IWSR has blamed China and the US for the underperformance of online alcohol sales in 2024, while American whiskey is expected to outperform Scotch in 2029.
In its E-commerce Strategic Study 2025, IWSR noted the online alcohol sector experienced a ‘poorer than expected performance’ last year.
The study, which covers more than 85% of global alcohol e-commerce value, reported a 1% drop in value for the channel in 2024 – its third consecutive year in decline.
IWSR attributed the decrease mainly to the US and China, which led to a revision in forecasts, alongside a reduction in total alcohol sales due to ‘macroeconomic weakness and uncertainty’.
The study looked at 10 core markets – Australia, Brazil, China, France, Germany, Italy, Japan, Spain, the UK and the US – and six secondary markets: Canada, Colombia, Mexico, the Netherlands, Nigeria and South Africa.
For the 2024-2029 period, IWSR is forecasting a compound annual growth rate (CAGR) value rise of 3% for online alcohol sales in those 16 markets. This is significantly down from IWSR’s previous estimate earlier this year of a 20% increase in value sales to US$36 billion by 2028.
IWSR has lowered its evaluations for the channel several times over the past few years, previously forecasting online alcohol sales would hit US$40bn by 2027.
Last year’s performance followed booming sales for the channel during the pandemic as drinkers were forced to stay at home. From 2019 to 2021, the global online alcohol sector grew its CAGR value by 35%, followed by a smaller growth of 5% from 2022 to 2023.
IWSR expects e-commerce’s share of total beverage alcohol (TBA) to remain at 3.5% this year, but it is forecast to increase slightly to a value share of 3.8% by 2029.
“After two years of correction as channel dynamics normalised in the wake of the pandemic, e-commerce alcohol sales have stabilised and are set to return to modest growth over the forecast period,” said Guy Wolfe, head of e-commerce insights.
“Our consumer research suggests that online usage dipped again in 2025, but to a lesser extent than the physical off-trade, indicating greater resilience of the digital channel.
“Frequency of use remains stable in most markets – although China is an exception – while volume and total basket spend still skew significantly higher in e-commerce than offline. As such, online growth is still expected to outperform the wider market, gaining modest share of total alcohol and the off-trade in the coming years.”
China, Brazil and the US are expected to account for more than half of the total online alcohol value growth between 2024 and 2029. IWSR attributes this to the countries’ mature adoption of e-commerce purchasing.
In the five years to 2029, China is forecast to record a CAGR value gain of 3% for online alcohol sales, compared with 6% for Brazil and 2% for the US.
The rest of the top 16 countries are expected to grow at a total value CAGR of 3% over the same timescale, including the UK (1% CAGR rise), Australia (up 3%), Mexico (up 12%), Canada (up 7%) and Colombia (up 8%).
Online spirits sales to rise by 2%
IWSR believes beer will be the main driver of online alcohol sales, with the category forecast to post a CAGR gain of 6% from 2024 to 2029.
Spirits could see a value rise of 2% over the same period, while wine is expected to be flat.
Within spirits, IWSR says whisky will benefit from its high online conversion rate, with 15% to 17% of drinkers having bought it online, ahead of segments like Champagne, still wine and beer.
American whiskey is expected to challenge Scotch’s leadership of online spirits sales in the future, as a result of domestic market growth. American whiskey is forecast to increase by 3% in CAGR value from 2024 to 2029, versus Scotch’s growth of 1%.
Meanwhile, agave spirits could see a 5% CAGR value rise over the same period due to the US, but its growth within the channel is becoming more widespread, IWSR highlighted.
IWSR predicts direct-to-consumer (DTC) sales by value will be flat between 2024 and 2029, with online specialists declining slightly. Growth is estimated to come from omnichannel (2024-29 value CAGR up 3%), on-demand (up 8%) and marketplaces (up 2%).
“Omnichannel and on-demand will be the key drivers of online channel growth to 2029,” Wolfe added. “Marketplaces are being reshaped by social commerce and Amazon, while online specialists and direct-to-consumer face hurdles.
“Grocer investment in digital capabilities and shopper value-seeking will support omnichannel expansion, while on-demand has consolidated in recent years and is set for renewed, convenience-led growth.”
Furthermore, IWSR consumer research found that 16% of purchasers globally asked artificial intelligence (AI) for a recommendation the last time they bought a product online. This figure is highest among Gen Z and Millennials, and in the US and Brazil.
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