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China, US and India lead path to recovery for global alcohol market

Global beverage alcohol is expected to begin its recovery in 2025, according to new data and forecasts from IWSR, with three markets in particular driving growth.

China, US and India lead path to recovery for global alcohol market

Global total beverage alcohol (TBA) declined 1% by volume and rose 2% by value (US$, variable exchange rate) in 2023, IWSR data shows. Excluding national spirits such as baijiu and shochu, global volumes were down 1% and value increased by just 3%.

Total beverage alcohol volumes are expected to edge up by only 0.4% this year after the 2023 decline. But a stronger recovery is forecast for 2025.

IWSR predicts that both volume and value will rise at a CAGR of 1% between 2023 and 2028.

When recovery comes, growth is expected to be relatively modest. Evenso, there are bright spots.

India, China and the US are expected to add US$30 billion in incremental value to the sector by 2028.

India was responsible for major volume growth in 2023. All major beverage alcohol categories (except rum and wine) increased their volumes here, with both Scotch and US whiskies recording 7% volume gains.

Despite the predicted increase in value to the alcohol sector thanks to China, the country experienced volume declines across a number of categories in 2023. International spirits grew by 2% as the on-trade reopened, but volumes of both Cognac (-3%) and malt Scotch (-11%) suffered falls.

The US is the only mature market forecast to add substantial TBA value in the coming years. The path ahead for the country with the world’s largest economy is rocky. The US spirits market (volumes down -2%) declined for the first time in nearly 30 years in 2023, and every major TBA category saw volume declines, except for Tequila, some US whiskey segments and RTDs. Looking forward, Tequila is poised to add the most incremental value to the US spirits market by 2028, driven by premium-and-above expressions.

Emily Neill, COO research and operations, IWSR, said that TBA gains are “now coming increasingly from developing markets”.

The growth axis is shifting towards developing economies. After India, China and the US, the next two most value-adding markets are Brazil and Mexico.

Elsewhere, markets including Colombia, the Philippines and Thailand all posted volume and value increases.

Neill predicted this diversification would entail “a greater exposure to business risk”.

“Companies need to reorientate their global strategies to target new growth opportunities,” she said. “Expansion across categories as well as geographic footprint will be increasingly important. In today’s global TBA marketplace, companies need to continue to innovate in order to succeed.”

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