What the future holds

Premium-priced RTDs have grown faster than any other segment over the past two years, albeit on a smaller volume base, with new products increasingly launching at higher prices. This is driven by an increase in spirit-based offerings, higher abvs and well-known premium brand extensions.

6. Ecommerce growth moderates

Pandemic lockdowns drove rapid alcohol ecommerce growth due to a loosening of regulations and a boosted ecommerce infrastructure in many markets. As a result, alcohol ecommerce value grew by over 40% in 2020 alone.

Over the coming years, these growth rates are set to moderate as the market enters a period of post-pandemic normalisation. However, the overall trajectory remains upward, with alcohol ecommerce expected to contribute an additional $10bn+ to the beverage alcohol sector between 2021 and 2026.

According to the report wine, the most established category online, will see its share of ecommerce sales slip slightly over the coming years to beer, spirits and RTDs.

7. Home consumption to keep increasing

Growing economic concerns are set to make the at-home occasion even more significant in the future, as shrinking disposable incomes force many people to cut back on visits to bars and restaurants.

The projected gains follow a period of reinvention for the home-premise occasion, which grew increasingly sophisticated during Covid-19 lockdowns with the rise of home delivery platforms, TV streaming services, and consumer interest in mixology and at-home entertainment.

8. Moderation on the rise

Previously driven mostly by health and wellness concerns, moderation in alcohol consumption is now increasingly being spurred by economic worries and a need to cut household spending. However, consumers are choosing to cut down rather than down-trade in many markets.

About half of all adult drinkers surveyed as part of IWSR’s price sensitivity study across 17 focus markets in H2 2022, expressed interest in moderating their alcohol consumption. The trend is particularly strong in European markets where economic confidence is low, such as the UK and Germany.

The long-established trend of moderation as a health and wellness choice also continues, especially among those on higher incomes in countries such as the US, Canada, Australia, and China. Germany remains the largest market for low and no-alcohol products, however smaller markets, such as the US, Canada and Australia, will show more dynamic growth, with volume CAGRs 2022-2026 outpacing that of Germany.