Alcoholic Beverages Market to Witness Growth on the Back of Increasing Consumption of Premium Alcoholic Beverages

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The alcoholic beverages market comprises various premium spirits, beer, wine and other alcoholic drinks that are consumed globally. Premium and super premium alcoholic products like premium whisky, craft beer and fine wine are gaining huge popularity among millennial and young consumers. These premium products offers distinctive taste and flavor which excite taste buds of new age consumers. The demand for premiumization is driving innovation in product varieties, flavors, packaging and marketing of alcohol drinks.

The global alcoholic beverages market is estimated to be valued at US$ 1,769.41 Bn in 2023 and is expected to exhibit a CAGR of 2.5% over the forecast period 2023-2030.

Premiumization is the biggest growth driver as younger consumers are willing to pay extra price for best tasting and premium alcohol drinks. Economic prosperity in developing countries is also driving consumption of premium alcoholic products.

Key Takeaways

Key players operating in the alcoholic beverages market are Anheuser-Busch Inbev (BUD) (Belgium), Asahi Group (Japan), Bacardi (Bermuda), Brown Forman (U.S.), Carlsberg (Denmark), Constellation Brands (U.S.), Diageo (U.K.), Heineken (Netherlands), Pernod Ricard (France), Suntory (Japan). These players are investing heavily in premiumization of their product portfolio and are coming up innovative product varieties, flavors and packaging to lure new age consumers.

The alcoholic beverages industry is offering ample opportunities for product innovation and new product development. Premium micro-breweries, craft distilleries and boutique wineries are emerging rapidly meeting evolving tastes of young consumers. Technological advancements are also enabling traceability, visibility and transparency in the alcoholic value chain. Blockchain is being used to track ingredients sourcing and manufacturing process.

Market Drivers

Increasing disposable income and economic prosperity especially in emerging countries is driving consumption of premium alcoholic beverages. Younger consumers willingness to pay extra for premium taste is a key growth driver. Premiumization trend is pushing alcohol companies to innovation in flavors, tasting experiences and branding which is positively impacting the market. Health awareness is also prompting shift towards premium low or no alcohol drinks.

Current challenges in the Alcoholic Beverages Market

The alcoholic beverages market faces ongoing challenges from changing consumer preferences towards healthier lifestyle choices. Rising health consciousness has led to a decline in alcohol consumption among certain demographic groups. Stringent government policies and regulations regarding alcohol advertising and promotion have also limited growth opportunities for industry players. High taxes imposed on alcoholic beverages in some countries act as a restraint. The COVID-19 pandemic severely impacted on-trade sales through shutdowns of bars, restaurants and event venues. Supply chain disruptions created intermittent shortages of raw materials.

SWOT Analysis

  • Strength: Well established brands and distribution networks. Growing popularity of premium and craft varieties.
  • Weakness: Declining consumption in developed markets. Vulnerable to economic slowdowns and discretionary spending cuts.
  • Opportunity: Emerging markets in Asia Pacific and Latin America offer significant headroom for growth. Innovation in product categories like hard seltzers and canned cocktails.
  • Threats: Strict regulation on marketing and health warnings. taxation. Alternative beverages like cannabis pose competition.

Geographical regions with market concentration

North America accounts for the largest share of the global alcoholic beverages market, driven by heavy beer and spirits consumption in the United States. Europe is another major regional market led by countries like Germany, United Kingdom, France and Italy.

Fastest growing geographical region

The Asia Pacific region holds immense growth potential for alcoholic beverages. With improving economic conditions and rising disposable incomes, demographic segments in China, India and other developing Asian nations are expected to increase their spending on premium alcoholic products in the coming years. This makes Asia Pacific the fastest growing regional market during the forecast period.