Premiumisation shows first signs of slowdown in alcohol sector
Premiumisation prevails in the beverage alcohol sector, but there are signs that it is beginning to slow according to analysis from the IWSR.
The picture for the alcohol sector was broadly positive for the first half of 2022, the IWSR said, though a consumer survey carried out by the IWSR found that consumer confidence is beginning to wane in several markets.
Total beverage alcohol volumes are still yet to reach pre-pandemic levels across 20 major markets, though the premium-and-above band grew 7% in 2022 H1, compared with 2019, across the same markets.
This is lower than the 18% growth witnessed last year, which was attributed to the ‘post-pandemic rebound’ seen as lockdowns eased in early 2021.
Consumers are increasingly focused on at-home drinking, while the trends appear to show people are drinking less but opting for higher quality, premium products.
Tequila has driven premium-and-above spirits growth in H1 2022, while premium+ sparkling wine has outpaced the broader premium+ wine market, with Champagne and Prosecco enjoying widespread uplift.
IWSR’s chief strategy officer Brandy Rand noted: “What we see in spirits is that the growth is relatively broad-based across categories such as gin, rum, malt Scotch, US and Irish whiskey, although an absolutely key driver is the agave category.”
Consumer confidence has been shaken by the burgeoning cost-of-living crisis, particularly across Europe and in the United Kingdom, where consumers are especially concerned.
In the United Kingdom, the IWSR says there are signs of a decrease in net spend across “most categories within premium-and-below price bands”.
IWSR chief operating officer Emily Neill added: “What we are beginning to see now is signs of some slowing down [in premiumisation], particularly in our consumer data, which tends to be an early indicator of trends to come.”