China has performed better than initially foreseen at the start of the pandemic. The country returned to almost all everyday activities a lot quicker than the rest of the world, and alcohol sales have surged in recent months. It is expected to enjoy a full recovery by 2021. Brazil and Japan have also proved remarkably resilient through 2020. They are both expected to return to pre-pandemic volume consumption levels in 2021. Brazil has the second highest Covid-19 death toll in the world, but it has largely kept the economy open. Wine sales will grow there in 2020, according to IWSR, while beer and cachaça will bounce back in 2021.
Beer has also been very resilient in Japan, which continues its journey away from traditional products such as shochu and sake. India, South Africa and Mexico, the countries that introduced prohibitions on alcohol during the pandemic, will unsurprisingly suffer some of the largest volume losses this year. Global travel retail sales will understandably be down by 68% in 2020. The on-trade has suffered long-term damage, while ecommerce has been the big winner.
“The rise of ecommerce and the efforts by retailers and on-premise operators to adapt to this crisis, coupled with consumers expanding to new occasions, created a dynamic, albeit challenging, new environment for beverage alcohol,” says Meek. The value of ecommerce in 10 core countries – Australia, Brazil, China, France, Germany, Italy, Japan, Spain, UK, US – is forecast to grow by more 40% to $17bn in 2020, and then break through the $40bn barrier by 2024. Spirits will decline by just 7.2% in 2020, according to the new IWSR forecasts, while beer and wine will both be down by around 9%. The RTD category will grow by 43%, driven largely by soaring volumes in the US, where its gains are largely coming at the expense of beer. Consumers have not reported significant shifts in their preferred categories, though they do report spending more on whisky, cognac, champagne, wine, tequila, craft beer, and gin.
“Covid-19 has had a polarising effect on the world economy and thereby the global beverage alcohol market,” says Meek. “Large markets such as the US and China have survived the best, while less developed regions and countries such as Africa, Mexico and Argentina have unfortunately suffered more. “Very premium high-end spirits have also held up well, while low-end and value products have seen gains in struggling markets as Covid-19 leads to downtrading. Some of the more standard middle ground categories, blended scotch for example, have lost share.”
