Alcoholic Beverages Market - Growth, Trends, COVID-19 Impact, and Forecast (2022 - 2027)

The alcoholic beverages market is projected to register a CAGR of 3.4% during the forecast period (2022-2027).

During the COVID-19 outbreak, the alcoholic beverages market was severely impacted due to the closure of specialty shops, bars, pubs, and restaurants. During mid-2020, the easing of lockdown measures led retailers to gain confidence. At the same time, a steep increase in prices was observed in some countries, mostly due to government regulations and taxes, thus minimally affecting the market studied.

For instance, on March 24, 2020, Pernod Ricard revised its outlook for the current fiscal year and expected its profit margins to decline by nearly 20%, mainly due to the spread of COVID-19. Moreover, companies are witnessing a leap in their off-premise sales than on-premise sales. For instance, Constellations Brands saw a 30% rise in its beer volume in the US off-premise channel in February 2020, as the customers avoided on-premise to stem the spread of COVID-19. The demand for hard drinks, such as whiskey and gin, grew during the pandemic, while products such as beer witnessed volume growth. In-house consumption, along with the stocking of brands, has been one of the propelling factors for the market to sustain during the pandemic.

Over the medium term, the market is likely to be driven by the increasing global young-adult demographic, coupled with high disposable income and consumer demand for premium/super-premium products.

Globally, beer drives the market for alcoholic beverages. Regionally, Asia-Pacific is expected to dominate the market during the forecast period. In the market studied, growth in online retailing has been observed. In the past few years, Drizly, an alcohol e-commerce platform, experienced revenue growth in online alcohol delivery.

Key Market Trends

Premiumization is Driving the Alcoholic Beverages Market

Consumers worldwide have more sophisticated palates compared to a decade ago. They are constantly looking to explore unique, high-quality alcoholic beverages. The inclusion of natural ingredients in alcoholic beverages improves their functionality, and such products are gathering a lot of attention from consumers.​

The increasing health awareness among people, which promotes the inclusion of functional and natural ingredients, provides greater opportunity for the premium alcohol market. The foodservice industry witnessed huge sales in the recent past, with considerable sales coming from premium alcoholic beverages, especially premium wine and whiskey. ​

According to the Distilled Spirits Council, in 2020, the premium alcohol market recorded an increase of 9% in the United States, leading to demand growth for premium and super-premium whiskey.

North America to Dominate Market

Due to a surge in the young adult population, North America dominates the alcoholic beverage industry. Furthermore, rising demand for high-quality alcoholic drinks may boost the alcoholic beverages market throughout the forecast period. Due to the rising disposable income in Asia-Pacific, the alcoholic drinks industry is expected to develop significantly. Furthermore, the progressing countries are expected to drive the region's alcoholic beverage industry in the coming years. Craft beer, craft spirits, and Japanese spirits are the fastest-growing segments due to the consumer perception of craft spirits as premium quality and the concept of mindful drinking in the country.​

The US wine market is being catered to by more than 10,000 wineries, where California held the highest share, i.e., more than 85%, followed by Washington, Oregon, New York, Texas, and Virginia.​ American consumers are becoming more attracted to wines with descriptors, no taste additives, gluten-free, low carb, vegan-friendly, sulfite-free, low calorie, low alcohol, light, lighter, organic, paleo-friendly, etc. This popularity is attributable to the rising focus on healthy food and beverages across the nation.​

Competitive Landscape

The market is highly competitive, and major players account for significant shares in the market. Some of the largest market players in the alcoholic beverages market are Diageo, Anheuser-Busch InBev, Bacardi Limited, and Constellation Brands. ​The alcoholic beverages market is expected to witness significant growth over the forecast period, owing to the development of several marketing strategies that greatly rely on product innovation, product differentiation policies in terms of ingredients added, and packaging and branding of the products via social media to attract the target group of consumers.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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