Putting the Multichoice decline in context
Lindsey Schutters
Alcoholic drinks market put to the test - Euromonitor Intl
Data analytics firm, Euromonitor International can reveal that the alcoholic drinks market in 2023 saw a total volume decline globally for only the third time in 15 years.
Photo by Michael Discenza on Unsplash
Alcoholic drinks witnessed a marginal total decline of 0.2%. From inventory adjustment, 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.
Spiros Malandrakis, head of alcoholic drinks research at Euromonitor International, says “The industry entered negative territory, a rare occurrence, highlighting the severity of the perfect storm facing it.”
Non-alcoholic categories booming, niche categories present opportunities
In Euromonitor’s World Market for Alcoholic Drinks 2024 report, Malandrakis said ‘other ready-to-drinks (RTDs)’ – primarily representing Hard Seltzers – and cognac posted total volume declines of 16.6% and 9.5% respectively leading the worst category performers and highlighting the wide-ranging shifts and challenges across key segments.
“As the no/lo alcohol aisles and bar shelves get increasingly more crowded, opportunities in this segment will shift towards functionality, moving beyond brand extensions to embrace unique compositions that push the limits of experimentation, resonating strongly with younger Millennial and Gen Z demographics.
“Conversely, spirit-based RTDs posted 8% 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,” said Malandrakis.
Roaring momentum post pandemic has mostly been lost
Malandrakis said that both off and on-trade performance had decelerated significantly losing most of the roaring momentum driving the post-pandemic bounce back and witnessing a 0.7% volume decline and 1% volume growth respectively.
“As the post-pandemic effervescence driving the industry fades, 2023 becomes reminiscent of a well-balanced Negroni. Decidedly bitter notes - as macroeconomic and geopolitical volatility take their toll - find equilibrium against the herbaceous hints of green shoots of cautious optimism.
“While numerous short-term downside risks remain and most categories and markets are still under pressure, alcoholic drinks appear to be turning yet another corner and proving resilient in the face of a state of permacrisis. There are challenges ahead,” said Malandrakis.
For more insights see the World Market for Alcoholic Drinks 2024 report.
