The trade is focusing on de-stocking premium-end categories, like baijiu, cognac, and scotch, as 2023 proved to be a lower-than-expected performance with consumers cautious about discretionary spending.
“The recovery in China during 2023 wasn’t as smooth or strong as many had expected, with inconsistencies between categories and price tiers,” said Shirley Zhu, IWSR Research Director for Greater China.
“A slowdown was felt across drinks categories, with consumers wary of spending."
Total beverage alcohol volumes grew only marginally between 2022 and 2023 with losses in spirits of 9%, and in wine of 14%, only tempered by marginal increases in beer and RTD categories.
The malt scotch category saw volume declines across all price tiers for the first time
“A crisis in the property sector significantly impacted the Chinese economy, affecting both business and consumer confidence,” continued Zhu.
“Despite an improvement in early 2023 as pandemic restrictions were lifted, consumer sentiment subsequently tailed off and remained low.”
The IWSR forecasts for the soft recovery of the Chinese beverage alcohol market to continue for some time, with volumes predicted to be essentially flat between 2023 and 2028.
The market value is however expected to recover, adding US$14 billion by 2028 with baijiu expected to account for two-thirds of that total.
