Alcohol Market Eyes Growth in 2025 Led by India, China, US

Shift Towards Premiumization Drives Value Growth in Global Alcohol Sector


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The global beverage alcohol market is gearing up for a rebound. After a challenging 2023, where the market saw a 1% decline in volume and a modest 2% rise in value (adjusted for variable exchange rates), signs of recovery are on the horizon. According to the latest data and forecasts from IWSR, a stronger upturn is expected to commence in 2025, driven primarily by three key markets: China, the US, and India.

In 2023, the global total beverage alcohol (TBA) market experienced a slight dip in volume, down by 1%, but saw a 2% increase in value. This nuanced picture reveals some underlying trends. When excluding national spirits like baijiu in China and shochu in Japan, global volumes still fell by 1%, while the value grew by 3%. This suggests a shift towards premiumization, where consumers are opting for higher-quality, and often more expensive, beverages.

This year, TBA volumes are projected to grow marginally by 0.4%. This modest growth, however, sets the stage for a more robust recovery forecasted for 2025. IWSR anticipates a compound annual growth rate (CAGR) of 1% for both volume and value from 2023 to 2028.

The Leading Trio: India, China, and the US

India: The Volume Driver

India has emerged as a significant player, driving major volume growth in 2023. The country saw increases across all major beverage alcohol categories, except for rum and wine. Notably, both Scotch and US whiskies recorded impressive 7% volume gains. This surge is largely attributed to India's burgeoning middle class and their increasing disposable incomes, which are fueling a growing appetite for premium alcoholic beverages.

China: A Mixed Bag

China's role in the recovery story is a bit more complex. Despite its potential to significantly boost the sector's value, China experienced volume declines across several categories in 2023. The reopening of the on-trade (bars, restaurants, and clubs) helped international spirits grow by 2%, but this was offset by declines in Cognac (-3%) and malt Scotch (-11%). This indicates that while there's demand for international spirits, local economic conditions and consumer preferences are causing fluctuations in specific categories.

US: A Mature Market with Potential

The US stands out as the only mature market poised to add substantial value to the global TBA sector in the coming years. However, the road ahead is fraught with challenges. In 2023, the US spirits market saw its first volume decline in nearly 30 years, down by 2%. Most TBA categories experienced drops, except for Tequila, some segments of US whiskey, and ready-to-drink (RTD) products. Tequila, in particular, is set to add the most incremental value to the US spirits market by 2028, driven by a strong demand for premium and above expressions.

The Broader Landscape

The shifting growth axis towards developing markets is a key theme. After India, China, and the US, Brazil and Mexico are identified as the next most valuable markets. In addition, countries like Colombia, the Philippines, and Thailand have all posted both volume and value increases, indicating a broader diversification in the global alcohol market.

Emily Neill, COO of research and operations at IWSR, highlighted the importance of this diversification. She noted that the gains in TBA are increasingly coming from developing markets, which also brings a greater exposure to business risk. "Companies need to reorientate their global strategies to target new growth opportunities," she said. "Expansion across categories as well as geographic footprint will be increasingly important. In today's global TBA marketplace, companies need to continue to innovate in order to succeed."

As the global beverage alcohol market prepares for recovery, businesses must adapt to the evolving landscape. The emphasis on premiumization, the rise of developing markets, and the need for strategic innovation will be critical in navigating the path to growth. With India, China, and the US leading the way, the next few years promise to be a transformative period for the global alcohol market.

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