Global alcoholic drinks market drops 17% in 2023 — Report

The sales of alcoholic beverages in the global market declined by 16.6 percent in 2023, a new report from Euromonitor International shows.

The report by the London-based research firm titled ‘World Market for Alcoholic Drinks 2024’ said the resilience of alcoholic drinks was put to the test as it witnessed a marginal decline of 0.2 percent due to inflationary pressures in the West and a structural slowdown in China.

“From inventory adjustment, and pantry unloading in the US to geopolitical upheaval impacting consumer sentiment worldwide, from the detrimental effects of inflationary pressures in most Western markets to a structural slowdown in China, alcoholic drinks’ resilience was put to the test,” the report said.

Spiros Malandrakis, head of Alcoholic Drinks research at Euromonitor International, said the industry suffered loss, highlighting the severity of the perfect storm facing it.

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“Other ready-to-drinks (RTDs)’ – primarily representing Hard Seltzers – and cognac posted total volume declines of 16.6 percent and 9.5 percent respectively, leading the worst category performers and highlighting the wide-ranging shifts and challenges across key segments,” she said.

She highlighted that opportunities in this segment will shift towards functionality as the non-alcohol aisles and bar shelves get more crowded. It would move beyond brand extensions to embrace unique compositions that push the limits of experimentation, resonating with younger Millennial and Gen Z demographics.

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“Conversely, spirit-based RTDs posted eight percent total volume growth, all nascent non-alcoholic categories booming and other sparkling wine capitalising on trading down from champagne, rise as some of the best performers while proving that pockets of growth are still there for the taking,” Malandrakis said.

Malandrakis spotlighted that both off and on-trade performance had decelerated, losing most of the roaring momentum driving the post-pandemic bounce back and witnessing a 0.7 percent volume decline and 1 percent volume growth respectively.

“As the post-pandemic effervescence driving the industry fades, 2023 becomes reminiscent of a well-balanced Negroni. As macroeconomic and geopolitical volatility take their toll, it will find equilibrium against the herbaceous hints of green shoots of cautious optimism,” she added.