Alcohol consumption due to fall by 8% in 2020

Despite scenes of consumers bulk-buying alcohol at the start of the pandemic, Covid will lead to a global reduction in alcohol consumption by 8% in 2020, according to the IWSR, writes Eloise Feilden.

The IWSR forecast covers 20 key markets (including the global travel retail channel), that drive over three quarters of global alcohol volumes, and predicts that consumption of alcohol is set to fall by 8% in 2020 across the 19 countries assessed.

Most of these losses come as a result of government bans and lockdowns. Spain is forecast to see a 16% reduction in alcohol consumption in 2020, as over two thirds (70%) of the country’s nationwide consumption takes place on-premise, meaning the national lockdowns have hit the Spanish market particularly hard.

Strong off-trade sales have helped Australia whether the Covid storm

In Australia, however, alcohol consumption is weighted in favour of at-home drinking, meaning it was able to bear the brunt of on-trade closures without too much damage.

In total, the IWSR predicts that alcohol consumption volumes for Australia will fall by just 1% in 2020.

Almost all of the 19 countries assessed are predicted to see overall losses in national consumption volumes, but in the US and Canada rates have risen by 2% in the past year.

Much of this growth within the US has been driven by the rising popularity of hard seltzers, as lower strength beverages become more sought after.

Meanwhile, the movement towards wellness and moderation has seen the low- and no-alcohol sector continue to grow.  

Although the growth of low-spirit beverages has waned due to on-premise closures, low ABV beers are continuing to gain popularity across a number of markets.

The low- and no-alcohol beer market in the UK is estimated to continue to grow at a compound annual growth rate (CAGR) of 4% between 2019 and 2024, and low ABV beverages are gaining popularity beyond the western market, with low-alcohol beer consumption in Russia expected to grow by 12% within the same five year period. 

Despite huge initial losses in the Chinese alcohol market, the return of on-premise trade and the strength of their e-commerce sector has seen the market bounce back.

Market losses in China are estimated at 9% by the end of this year, a major improvement on earlier predictions, suggesting that other markets may too remain hopeful for a strong recovery once new vaccines come into play.