The key issues affecting beer sales and how to navigate them

Worldwide Brewing Alliance (WBA) president and CEO Justin Kissinger speaks to Jessica Mason about why the industry needs to work together to face challenges head on.

The beer sector has faced myriad challenges of late, but there is no one main issue affecting sales, but many. At least, that is what the international trade association for beer, the WBA, has outlined.

The challenges

Speaking to the drinks business, Kissinger, who heads up the organisation which represents approximately 70% of the world’s beer production, from large multinational conglomerates to small craft brewers, said: “Beer sales are experiencing pressure from multiple sources. People are facing cost of living challenges, which drive consumers to trade down or visit pubs and restaurants less. Rising input costs, from energy to barley to packaging, squeeze margins and can raise prices for consumers.

Additionally, challenging policy environments, including regulatory uncertainty, higher duties, and new government mandates, create additional headwinds.”

Despite this the beer sector delivered US$878 billion to the global gross domestic product (GDP) in 2023, according to a report WBA released earlier this year. Plus, on a global scale, premium beer is currently outperforming wine and spirits.

For instance, data from IWSR’s Bevtrac consumer tracker showed how Brazil saw a 14% volume increase in premium beer last year, with rising spend among high- and medium-income earners and there are similar trends are emerging in Europe. In France, premium and super-premium beer volumes are showing green shoots of recovery and meanwhile, more affluent Spanish drinkers appear to be reshaping the prospects for premium beer in Spain. Despite a challenging macroeconomic environment, the data suggests that category and demographic nuances – particularly the resurgence of Gen Z and premium beer – are reshaping the global alcohol landscape.

But how can the sector work together to navigate the areas that hold it back? According to Kissinger, “the beer sector should continue to collectively engage with policy makers”. As guidance, he explained that “at a minimum, we want to ensure proportionate, sustainable regulation and taxes. Ideally we want to develop growth focused policies that actively support the sector”.

Staying vocal, aware and connected

But there is also something else just as important that needs to be underpinned: staying vocal. Kissinger explained: “We should also continue to proudly promote beer. We have a high-quality product that promotes social connection and supports moderation, with styles and flavours for every palate. As economic conditions improve, that cooperation and commitment will pay dividends.”

In terms of which beer businesses that are leading a good example in working around such problems effectively, Kissinger pointed out that those which were seeing low and no-alcohol as an “opportunity” rather than pessimistically were benefitting.

He highlighted: “Brewers embracing lower- and no-alcohol innovation are opening valuable opportunities to connect with consumers, promote moderation, and create new beer occasions.” He noted: “Consumers are embracing these options, making it one of the fastest-growing segments in the category” and suggested that it was an area of the category that should not be overlooked.

Additionally, Kissinger advised that breweries that were staying connected and working with others to foster community connections as well as streamline the supply chain were also seeing this now pay off. He observed: “Regional brewers investing in local connections and sustainable supply chains are also thriving. People love their local brands, and a strong relationship with local customers boosts resilience and sustains demand.”

Considering other ways the beer industry should respond to make things easier, Kissinger suggested that each business should try to “double down on innovation: new formats, lower- and no-alcohol options, inventive ingredients, and seasonal styles” in an effort to “keep consumers engaged and delighted”.

Kissinger pointed out that the industry “should also be partnering more with hospitality” because “gathering with friends at a local pub or restaurant is one of the classic occasions to enjoy a beer”. This, he implored, was a crucial reason as to why the sector should “be working together with our colleagues to advocate for policies that promote hospitality and support these spaces”.

Staying ahead

But does the future look very different for beer? How might brewery businesses stay ahead of the game and remain agile? Here, the advice looked more into seeing each stage as a situation that could open up opportunities to become more efficient and sustainable.

Kissinger explained: “We are experiencing a rapidly evolving landscape, from AI uptake to climate change impacts on the agricultural supply chain to global demographic changes.”

He insisted: “There are major opportunities to boost efficiency and sustainability across supply chains, production, and distribution” but lamented that “the technologies that enable these improvements are expensive”. This means “supportive government policies that promote these innovations are a critical part of the sector’s evolution,” he said.

Meanwhile, the beer trends that have noticeably seen uplift amid such a changing landscape are the ones to watch.

Kissinger reiterated how “lower- and no-alcohol options are booming, especially among younger adults seeking moderation without sacrificing enjoyment and choice”. But he also flagged how people are still on the lookout for “premium, craft, and specialty beers” which are “also thriving” and “attracting loyal followings and generating buzz within the beer community”.

Beyond that, he told db how new grains are also one way that the industry is evolving, so any brewers looking into “experimentation with unique ingredients, like sorghum and fonio [which are] emerging as an exciting trend” could also be an avenue to explore. After all, Kissinger noted, the experimental grains route is already opening up “fresh possibilities for flavour, style, and innovation” which could help move the sector forwards.

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