In the early days of COVID-19 lockdown, reports of consumers panic-buying alcohol led to the impression that people were drinking more than usual during the pandemic.
Although pantry-loading behaviour soon tapered off, many industry watchers were asking themselves, “are consumers really drinking more during COVID-19?”
Global liquor data analysis, the IWSR, has published an in-depth assessment of alcohol consumption and consumer behaviour this past year, covering 20 key markets (including the global travel retail channel) that drive 75%+ of global alcohol volumes.
IWSR data shows that alcohol volume consumption during the pandemic was down across almost all markets, including Australia, Brazil, China, Colombia, France, Germany, India, Italy, Japan, Mexico, Poland, Russia, South Africa, Spain, Thailand, Turkey, the UK and the global travel retail channel.
Only the US and Canada will see increases in beverage alcohol volume consumption in 2020 (both at over 2% total volume increases).
In total, beverage alcohol volumes across the 19 countries are set to fall by -8% in 2020. Global travel retail volumes are forecast to be down -68% in 2020.
According to IWSR, the key reason for this decline is largely down to decreased purchasing in the on-trade.
In terms of what people are drinking, some of the better performing categories include still wine and RTDs. These categories are also more easily able to make the switch from on-premise to take-home consumption.
RTDs in particular resonate with global consumers who are increasingly showing a propensity for refreshing, flavourful and longer-to-consume drinks.
The low-and no-alcohol sector has remained resilient through the crisis, although growth of low- and no- spirits has been hampered by the absence of a fully functioning on-premise channel, seen as key to bringing the category closer to consumers.
As the year draws to a close, the impact of the pandemic continues to unfold. But one thing remains clear: IWSR data shows that people have not been drinking more during the pandemic.
While the news of a vaccine is certainly key for a rapid recovery of the hard-hit travel retail and on-premise sectors, IWSR says new questions will arise: how will consumer spending and possible declines in disposable income impact the industry?
Premiumisation trends are nuanced; will some consumers continue to opt for more premium offerings, tapping into a “less but better” approach to alcohol consumption?
Value products have already seen gains in struggling markets where COVID-19 has led to downtrading; how will category and market nuance shift in the years to come? Stay tuned.
For more from IWSR, click here.
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