The global beverage alcohol market is set for a moderate recovery in 2025, following a tough 2023 (-2% US spirits decline, -1% global TBA volume drop) and a sluggish 2024 (+0.4% projected volume growth). According to IWSR, India, China, and the US will lead the surge, adding a staggering $30 billion by 2028. However, brand owners must navigate an increasingly complex economic and regulatory landscape to stay ahead.
2023 in Review: A Tough Year for Alcohol
For the first time in nearly 30 years, the US spirits market dropped by -2%. Globally, total beverage alcohol (TBA) volumes fell -1%, though value inched up by +2%. Excluding national spirits like baijiu and shochu, global volumes still saw a -1% dip, but value rose by +3%.
The main culprit? A sharp decline in consumer demand due to rising living costs and inflation, along with inventory surpluses weighing down key categories.
2024: The Slow Crawl Back
While early signs of recovery are emerging, the TBA market remains sluggish, with projected volume growth of just +0.4%. As households rebalance spending, meaningful growth is expected to return only in 2025.
2025-2028: A Shift Towards Emerging Markets
The industry is shifting focus to emerging markets. India, China, and the US will be the top value drivers, followed by Brazil and Mexico. India was the bright spot of 2023, with whisky (Scotch & US) volumes up +7%.
Meanwhile, China saw declines across multiple categories due to slowing economic growth & rising youth unemployment. The US spirits market is expected to bounce back, led by tequila, which will drive the biggest value gain by 2028.
Premiumisation: A Mixed Bag
The premiumisation trend is evolving, with some categories thriving while others struggle.
- Spirits: Premium & super-premium spirits dipped (-3%), but premium tequila & agave-based spirits continue to soar.
- Beer: Premium beer remained strong (+2% volume, +5% value).
- Wine: The category declined (-4%) in 2023, though premium rosé is booming in the US, UK & Australia.
Category Highlights: What’s Hot and What’s Not
- RTDs Shine Bright: The only major alcohol category to post volume growth in 2023 (+2%), with value soaring +6%. This trend is set to continue (+3% CAGR till 2028) as consumers opt for premium RTDs, including sophisticated cocktails & long drinks.
- Agave Spirits Expand: Tequila & mezcal grew +4% in volume & +7% in value in 2023. India is emerging as a surprise growth hub, with agave spirits nearly doubling in volume last year.
- No-Alcohol on the Rise: The fastest-growing segment, with no-alcohol beer up +6%, wine +7%, and spirits +15%. Consumers are embracing moderation for health & financial reasons, fueled by stricter regulations & evolving lifestyles.
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What’s Next? Navigating the New Normal
The global alcohol market is at a turning point. With growth shifting to developing markets, brands must adapt by diversifying their reach & innovating across categories.
“The ongoing shift in the TBA growth axis, with gains increasingly coming from developing markets, entails greater business risk. Companies need to reorient their strategies to target new opportunities,” says Emily Neill, COO of Research & Operations at IWSR.
While challenges persist, the path to recovery is clear. Premiumisation is evolving, emerging markets are booming, and new trends like RTDs & no-alcohol beverages are reshaping the industry. The smartest brands will be those that innovate & adapt to these shifts in the years ahead.
