Alcohol Industry Trends to Watch in 2025

The beverage alcohol market is set for a transformative year in 2025, with shifting economic conditions, evolving consumer behaviors, and digital advancements shaping the industry's trajectory. According to the latest research from IWSR, the global authority on beverage alcohol data and intelligence, the sector will face a trading environment that remains subdued but rich in opportunities. Emerging markets are expected to drive growth, while on-premise sales show signs of recovery.

Economic uncertainty continues to influence global markets, with inflationary pressures and geopolitical tensions affecting consumer confidence. In mature markets such as the U.S. and Europe, inflation remains a challenge, leading to shifts in purchasing behavior. Meanwhile, emerging economies such as India, South Africa, and several countries in Southeast Asia and Latin America are showing resilience. Younger consumers, expanding middle classes, and increased urbanization in these regions are fueling demand for premium and innovative products, along with a greater willingness to explore new drinking occasions and categories.

One of the most significant trends shaping 2025 is the rise of moderation strategies. Consumers across all demographics are more conscious of their alcohol intake, with an increase in 'light' drinkers—those who consume alcohol less frequently or in lower quantities. Temporary abstinence is also gaining traction, especially among younger consumers, with a notable percentage of affluent drinkers in India, South Africa, Mexico, and Brazil reporting periods of abstinence. Additionally, consumers are limiting their beverage choices to a single category per occasion, reducing overall consumption. This shift is driving growth in the no- and low-alcohol segment, which is projected to expand at a compound annual growth rate (CAGR) of 4% between 2024 and 2028, with the no-alcohol category leading at 7% CAGR.

Another key trend is the shift in the industry's growth axis. While mature markets face stagnation or marginal growth, developing economies such as India, China, Brazil, and Nigeria are expected to drive volume and value gains. India, in particular, saw a 4% rise in total beverage alcohol (TBA) volumes in the first half of 2024, driven by demand for premium spirits, ready-to-drink (RTD) beverages, and Indian single malts. In Southeast Asia, premium beer and spirits are gaining popularity in markets like Vietnam and the Philippines, while in Africa, South Africa's beer, cider, and RTD categories saw strong volume increases.

The rise of casual consumption is also reshaping drinking habits. Consumers are shifting away from formal drinking occasions toward more spontaneous and relaxed settings. In the U.S., Prosecco and RTDs are becoming staples at brunches, barbecues, and informal gatherings, often replacing Champagne. In Italy, the aperitivo culture continues to drive demand for bitters and aperitifs, while in China, economic pressures and evolving on-premise trends have encouraged more affordable and casual drinking occasions. RTDs, benefiting from this trend, are expected to gain total beverage alcohol market share in key regions, with Brazil, Australia, Germany, the U.S., and Canada all forecasted to see growth in the category.

Premiumization remains a factor in the industry, but its pace is slowing. While premium-plus beer and cider continue to perform well, with volumes rising 2% in the first half of 2024, premium-plus spirits and wine have seen declines. Consumers seeking affordability are opting for premium beers over higher-priced spirits, as beer offers a premium experience at a lower cost. However, status spirits—those with an average retail selling price of $100 or more—are still gaining value share, now accounting for 5% of the global spirits market. These high-end products remain insulated from economic pressures, as their consumers tend to be less affected by financial downturns.

Shifting purchasing channels are also influencing consumer behavior. On-premise sales are recovering in markets such as China, Germany, Italy, Mexico, the U.K., and the U.S., with Millennials in the U.S. driving a resurgence in on-trade spending. Meanwhile, digital platforms are playing an increasing role in influencing both online and offline purchases. A growing number of consumers are using online research before making in-store purchases, with 63% of online alcohol buyers conducting extensive research. Price comparison and product discovery are key motivators, as brand websites, reviews, and delivery apps guide consumer decisions across all retail channels.

As 2025 unfolds, these five trends will shape the global beverage alcohol industry, requiring brands and businesses to adopt a more nuanced approach to market segmentation, pricing strategies, and consumer engagement.