IWSR Report Highlights Resurgence in On-Trade Alcohol Consumption

The on-trade alcohol market is showing promising signs of recovery in key regions worldwide, according to the latest data from IWSR's Bevtrac Wave 2 2024 report. This resurgence marks a positive shift for the global beverage alcohol industry, which has faced significant challenges in recent years. Countries such as China, Germany, Italy, Mexico, the United Kingdom, and the United States are leading the revival, driven by increased consumer confidence and a preference for social outings, particularly among younger demographics like American Millennials. The revival is benefiting categories like Scotch whisky, liqueurs, and sparkling wine, which are seeing growing demand in on-premise settings.

The Bevtrac report, which tracks consumer behavior across 15 major markets, indicates a year-on-year increase in on-trade consumption during the most recent drinking occasions in many of these markets. While moderation remains a strong trend both at home and in public venues, the data shows that consumers tend to drink more during social outings than in private settings. Ivana Mitic, Senior Insights Manager at IWSR, notes that the on-trade has historically been a key driver of industry growth, and its recovery is offering much-needed optimism despite lingering challenges such as price increases and shifting consumer habits.

Globally, the beverage alcohol market continues to recover at a measured pace. Economic uncertainty and a growing trend toward moderation have softened the link between rising real incomes and alcohol consumption. However, consumer confidence is improving in North America, Europe, and Latin America, and beverage alcohol volumes have shown growth in several emerging markets, including India, Brazil, Mexico, and South Africa. India and Brazil each saw a 4% increase in total beverage alcohol volumes during the first half of 2024 compared to the same period in 2023, while South Africa recorded a 5% rise. These gains are attributed to factors such as a burgeoning urban middle class in India and improving economic conditions in Brazil and South Africa.

Moderation continues to shape global drinking habits, with more consumers opting to reduce alcohol intake rather than abstaining entirely. Light drinkers, defined by lower frequency and intensity of consumption, now make up the largest segment in Europe, North America, and the Asia-Pacific region. While heavy drinking is declining, strategies such as taking breaks from alcohol are common, particularly in markets like India, South Africa, and Latin America.

No-alcohol products are also gaining traction, with over a quarter of total beverage alcohol consumers having tried these alternatives in the past six months. The category is expanding rapidly in North America, India, and China, while countries like Germany and Spain report the highest adoption rates. Despite the momentum, the no-alcohol segment faces challenges due to price sensitivity and increased competition, with consumer spending showing signs of down-trading.

Premiumization remains a notable trend despite economic pressures. High-income consumers continue to drive demand for premium and above-price categories, such as single malt Scotch and Cognac. In India, for instance, spending per bottle in these categories has risen by more than 20% year-on-year, reflecting the enduring appeal of luxury experiences in the beverage alcohol sector.