Trends in other alcoholic beverages

Market Bulletin | Issue 179
22 Oct 2019
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According to the Australian Bureau of Statistics (ABS), Australians today are drinking less alcohol than at any point in the past 55 years. Alcohol consumption in Australia has been on a steady decline for more than 40 years, with consumption per capita in 2017–18 continuing its decade-on-decade decline as moderate consumption becomes the norm in Australia. Is this trend unique to Australia or is it a global phenomenon? Furthermore, are there differences by category?

According to the International Wine and Spirit Record (IWSR), 27.6 billion cases of alcoholic beverages were consumed in 2018, down 2 per cent from the year prior. However, IWSR forecasts that total alcohol consumption will steadily increase over the next 5 years, to 28.5 billion cases in 2023, an increase of 3 per cent (see Figure 1). The global market for alcoholic beverages was valued at just over $1 trillion, with IWSR forecasting this to grow by 7 per cent by 2023 as consumers continue to trade up to higher-quality products.

Figure 1: Global consumption of alcohol beverages (billion cases)

Source: IWSR

Beer – the largest global category

Beer is the biggest category with 20.2 billion cases sold in 2018 (see Figure 2). However, global beer sales have fallen by 1.1 per cent per annum since 2014. China is a key driver in the decline, with beer consumption in China falling by 13 per cent. In contrast, there was growth in Mexico and Germany.

Beer drinkers globally are seeking quality over quantity, evidenced by the continued growth in premium, super-premium and craft categories; while an increasing number of health-conscious consumers are turning to low- and no-alcohol varieties.

Another driving factor is that low-alcohol beers are now cheaper than their higher alcoholic equivalents. Off a relatively small base, IWSR has forecast no-alcohol sales to grow by 8.8 per cent per annum in the 5 years to 2023.

Figure 2: Share of gobal alcohol beverage consumption by caregory

Source: IWSR

Gin is the leading global growth category

By category, the IWSR reports that gin was the leading global growth category in 2018, with gin sales up 8 per cent compared to 2017, bolstered in part by trendy pink gins and innovation in product offerings, to lift the spirit’s sales to more than 72 million cases. IWSR forecasts that gin sales will hit 88 million cases by 2023.

Growth has been exceptional in European markets like the United Kingdom and Spain, where much of the innovation is occurring. According to Brandy Rand, chief operating officer for IWSR Americas, the growth in gin may be related to people choosing to increase the amount plant-based products in their diets. With a botanical base, gin has an herbaceous vibe that fits neatly into the plant trend.

Gin makers are also experimenting with natural flavours like basil, rhubarb, orange and cinnamon and, in the process, they’re bringing new drinkers into the fold. In Europe, where gin was previously preferred by the older demographic, gin is now consumed across all demographics and spread evenly by gender.

Whisky, rum and agave-based spirits record solid growth

Other spirits to record solid growth in 2018 included whisky (up 7 per cent), agave-based spirits (up 6 per cent) and rum (up 2 per cent). The IWSR has forecast that all 3 categories will to continue to grow through to 2023. In contrast, vodka sales continue to decline, down 3 per cent in 2018 and forecast to drop another 4.5 million cases by 2023. The decline is driven by lower-priced brands losing share in the two biggest vodka markets, Russia and the Ukraine.

RTD cans drive mixed drinks category growth

The mixed drinks category grew by 5 per cent across the globe in 2018, driven by growth in ready-to-drink (RTD) cans in the USA and Japan. In the USA, there has been an explosion in the popularity of alcoholic seltzers, with a Nielsen study of supermarkets and liquor stores showing a 210 per cent increase in spending on the category compared to last year. Sales of the number one alcoholic seltzer brand, White Claw, surged 320 per cent in the last year.

The growth in alcoholic seltzers comes as young Americans seek lower-alcohol lifestyles. A 350ml can of White Claw contains 100 calories and 2 grams of carbs – by comparison a standard beer has 142 calories and 11 grams of carbs. It is 5 per cent alcohol, lower than the averages of 12 per cent for wine and 37 per cent for spirits.

Image: Wine Australia

Consumer focus on well-being driving innovation

Consumers globally are increasingly focused on well-being and this is driving innovation in alcoholic beverages. To meet these consumer demands, producers are incorporating ingredients such as fruit juice, water and tea. They are also catering to consumer demand for alcoholic beverages that are lower in sugar and calories and have reduced alcohol by volume, allowing consumers to drink while still adhering to personal dietary aims and requirements. These products are rising in popularity across the globe.


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