Global drinks industry faces economic uncertainty but sees growth opportunities in 2025, IWSR
GLOBAL – The global drinks industry is expected to navigate a “subdued but opportunity-rich” trading environment in 2025, according to the latest research from IWSR.
While persistent inflation, geopolitical tensions, and fluctuating consumer confidence shaped 2024, the coming year presents both challenges and promising growth prospects.
Mature markets such as the US and Europe continue to experience economic strain due to high inflation, impacting consumer purchasing power.
In contrast, emerging economies like India, South Africa, and several countries in Southeast Asia and Latin America are showing resilience, driven by expanding middle classes, urbanization, and younger consumer demographics.
These regions are witnessing an increasing demand for premium and innovative beverage products, as well as a growing openness to exploring new drinking occasions and categories.
According to IWSR’s COO for research and operations, Emily Neill, shifting consumer behaviors and digital transformation are reshaping the industry.
“Channel shifts offer a note of optimism, with the on-premise showing nascent growth in some key markets, and digital platforms wielding a growing influence on both online and offline purchasing decisions,” Neill said.
Trends affecting consumption
A significant trend influencing the beverage alcohol sector is consumers’ increasing focus on moderation. IWSR’s senior insights manager for RTDs and no- & low-alcohol beverages, Susie Goldspink, highlighted that drinkers are becoming more habitual in controlling alcohol intake.
This trend, once associated mainly with younger consumers, is now widespread across age groups and demographics.
The proportion of “light” drinkers—those who consume alcohol infrequently or in small quantities—has surpassed that of medium and heavy drinkers across the 15 key markets covered by IWSR’s Bevtrac consumer research.
Additionally, temporary abstinence is becoming more common, particularly among younger legal drinking-age consumers.
In India, 72% of affluent drinkers in major cities reported abstaining from alcohol for a period, while in South Africa, Mexico, and Brazil, over half of surveyed consumers reported similar behaviors.
Beverage preferences are also shifting, with consumers increasingly limiting themselves to a single type of drink per occasion. The average number of beverage categories consumed per occasion dropped to 1.8 in 2024 from 2.4 in 2023. This trend reflects a move toward simplicity and a more mindful approach to drinking.
The no- and low-alcohol category is expanding rapidly, driven by changing consumer preferences and increasing demand for healthier alternatives.
Markets
According to IWSR’s No/Low-Alcohol Strategic Study, this segment is expected to grow at a compound annual growth rate (CAGR) of 4 percent between 2024 and 2028, with no-alcohol beverages leading at a 7 percent CAGR.
The no-alcohol segment alone is projected to generate incremental revenue exceeding US$4 billion by 2028.
Developing beverage alcohol markets are expected to drive industry growth in the next five years, with high-population countries like India, China, and the US leading in value gains. Brazil, Mexico, South Africa, Vietnam, and Nigeria are also poised for significant expansion due to their young populations and rising disposable incomes.
However, Neill cautioned that mature markets—aside from the US—may struggle to achieve meaningful growth, with some experiencing stagnation or contraction.
Consumer habits are also influencing the evolution of drinking occasions. The shift from formal, high-profile drinking events to more casual and spontaneous settings is reshaping the beverage alcohol landscape.
This trend is particularly evident in categories such as rosé wine, Prosecco, bitters, and spirit aperitifs. Ready-to-drink (RTD) beverages continue to benefit from this shift, gaining market share in key regions.
All top ten RTD markets are expected to register volume growth between 2023 and 2028, with Brazil leading at a projected 6 percent CAGR, followed by Australia and Germany at 4 percent, and the US and Canada at 3 percent. The convenience and affordability of RTDs are contributing to their sustained popularity.
Premium-plus beer and cider are also gaining traction amid economic pressures. While premium-plus spirits and wine saw a 3 percent decline in volume in the first half of 2024, premium-plus beer grew by 2 percent.
IWSR’s senior insights manager for beer, Roisin Vulcheva, explained: “The affordability trend is largely driving growth of premium-plus beer, as consumer occasions evolve and drinkers seek cheaper alternatives to spirits or other drinks categories.”
Consumers perceive premium beer as a cost-effective way to enjoy a high-quality drinking experience compared to pricier spirits or wines.
Market segmentation is becoming increasingly evident, with lower-income consumers downtrading in both volume and value terms, while higher-income consumers maintain premium purchases but reduce overall consumption.
At the top end of the market, status spirits—priced at an average of US$100 or more—are gaining share within the global spirits market. These luxury products now account for 5 percent of the total spirits market, driven by affluent consumers who are less affected by economic fluctuations.
Despite the challenges posed by inflation and shifting consumer behaviors, the global drinks industry is adapting to new opportunities.
Emerging markets, evolving drinking occasions, and the rise of no- and low-alcohol alternatives are expected to shape industry growth over the next five years.
According to ISWR, companies that strategically position themselves to capitalize on these trends will be best equipped to navigate the complexities of the 2025 market landscape.
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