Asia Pacific alcohol market slows as India and Southeast Asia drive new growth

Asia Pacific’s beverage alcohol market is entering a new phase as growth slows across the region, with India and Southeast Asia emerging as key areas of opportunity. According to IWSR, a leading authority on beverage alcohol data, total beverage alcohol (TBA) volumes in APAC fell by 2% in 2024, while value declined by 3%. All major categories saw value declines, except for ready-to-drink beverages (RTDs), which grew by 1% in volume. Beer volumes dropped by 3%, spirits by 2% (including national spirits), and wine by 4%.

The region’s two largest markets, China and India, experienced sharply contrasting results last year. China’s TBA volumes fell by 5%, with significant declines in Cognac, Scotch whisky, and baijiu. In contrast, India’s TBA volumes rose by 6%, with premium-plus product consumption up by 19%. The Philippines, Thailand, and Vietnam each recorded TBA volume growth of 2%, while Japan and South Korea both saw a 1% decline and Australia dropped by 3%.

Industry analysts point to stabilizing inflation and expanding GDP in India and the Philippines as drivers of growth. These countries are leveraging demographic momentum to fuel demand for beverage alcohol. Meanwhile, China’s real estate crisis and weaker economic outlook have dampened prospects for TBA growth there. Despite a global slowdown in premiumization, Southeast Asia continues to offer value growth opportunities supported by tourism, cocktail culture, and rising affluence.

India stands out for its broad-based gains in spirits consumption. Consumer interest is expanding beyond traditional whisky to include other categories such as Irish whiskey—up 58% in volume in 2024—and vodka, which grew by 17%. A new free trade agreement between the UK and India will halve import tariffs on spirits from 150% to 75%, with further reductions planned over the next decade. This is expected to benefit Scotch whisky and UK gin significantly. In 2024, Scotch accounted for 86% of India’s imported whisky value growth, while UK gin made up 76% of imported gin value growth. IWSR forecasts that Scotch whisky volumes in India will grow at a compound annual rate of 7% through 2029, with gin volumes rising at a rate of 3%.

China’s underperformance last year was led by sharp declines in baijiu (down 5%), Cognac (down 14%), and Scotch whisky (down 8%). The number of serves across beer, wine, spirits, and RTDs also fell. However, gin and vodka benefited from the growing popularity of cocktails among younger consumers. Gin volumes rose by 20% in China last year, while vodka increased by 4%. Analysts attribute the slowdown in premium products to cyclical economic pressures that have shifted consumer focus toward value and casual drinking occasions rather than prestige.

Looking ahead, IWSR forecasts mixed results for China: beer volumes are expected to remain flat through 2034; RTDs are projected to grow at a compound annual rate of 2%; sparkling wine at 5%; still wine is expected to be flat; and overall spirits are forecasted to decline by about 1% per year. Excluding baijiu, however, spirits could see modest growth.

Across APAC, emerging spirits categories are gaining ground at the expense of traditional favorites like Cognac and Scotch whisky. Cognac’s regional volumes dropped by 11% last year while its value fell by 16%. Irish whiskey grew by 27%, tequila by 14%, gin by 11%, and spirit aperitifs by 24%. India led absolute volume gains outside national spirits with a growth rate of 3%, but the Philippines outpaced it with a rate of 5%, driven largely by gin.

IWSR expects overall spirits volumes in APAC to continue declining this year and next before recovering between 2027 and 2029. Growth in India is projected to nearly offset continued declines in China due mainly to baijiu.

Wine continued its downward trend in APAC last year with a volume decline of 4%, though this was an improvement over the previous year’s drop of 8%. Still wine shrank by about five percent while Champagne fell eight percent. Other sparkling wines grew slightly after a difficult previous year. IWSR predicts that wine volumes will keep declining through at least 2029 but at a slower pace. Still wine will struggle most in China (with an expected annual decline of two percent), Japan (down one percent), and Australia (down one percent). However, there is some optimism for sparkling wine: Australia is expected to see two percent annual growth through 2029; China six percent; India eight percent; and Japan one percent.

Beer volumes in APAC fell three percent last year but are forecasted to return to growth from 2026 onward. Key markets driving future beer growth include India (projected three percent annual increase through 2029), Vietnam (one percent), Thailand (one percent), the Philippines (one percent), Indonesia (three percent), and Singapore (one percent). Declines are expected to continue in Australia (down one percent annually) and Japan (down two percent), while China’s beer market is predicted to remain flat.

RTDs remain the strongest growth category in APAC. They were the only segment to record volume gains last year thanks largely to resilient demand in Japan and South Korea. Japan is expected to maintain strong momentum with an anticipated three percent annual growth rate through 2029. Additional growth is forecasted for China (two percent annually), South Korea (ten percent), and India (six percent). Australia is not expected to contribute significant new RTD volumes going forward.

As Asia Pacific’s beverage alcohol landscape evolves amid economic shifts and changing consumer preferences, brand owners will need agility and adaptability to capture new opportunities—especially as India and Southeast Asia become increasingly important markets while China recalibrates its approach toward more casual consumption patterns.