The alcohol market will continue to expand. Also in the wine sector, but the entry-level segment will suffer

An increasingly tense international political framework does not help trade, nor does pressure from some governments and the WHO for ever stricter policies on alcoholic beverage consumption, communication, trade, and promotion. On the other hand, however, if wine, beer and spirits have accompanied human life for millennia, there must be a reason, and with the growth of the world population and wealth in some areas, so does the turnover of the wine & spirits sector it is destined to grow further, with an increase of 21 billion dollars at the end of 2023, compared to a global value estimated at over 1.7 trillion dollars (of which 207 billion attributable to wine in 2022). And growth projections through 2027 are +2% per year on average. Globally, the United States and China remain the primary engines of growth, but economies such as India, Mexico, and Brazil will become increasingly important, particularly for volume growth. According to the most recent updated forecasts from the English agency Iwsr Drinks Market Analysis.
“As geopolitical and economic uncertainty affects the market, alcohol consumers’ consumption habits are changing”, observes Mark Meek, CEO of Iwsr, who adds: “The main trends that have supported the sector, such as premiumisation, will change as consumers respond to rising living costs. However, the sector will continue to see significant value growth in pockets. The pandemic has also accelerated the rise of trends such as home consumption and moderation, which are here to stay.” In terms of premiumisation, which will continue to assert itself, there are different dynamics between mature and emerging markets. “Premiumisation appears to be embedded in consumer purchasing behaviours across most mature markets and will continue to add value across most price points, albeit at a slower rate of growth” Meek notes.
“In developing markets, on the other hand, as income rises, consumers continue to purchase higher-quality goods”. It is not surprising, then, that by focusing on the wine, it is the one in the lower price range that is under the most pressure. Still, wine lost volume in all ten major markets in 2022, returning to pre-pandemic levels and continuing its structural decline. Volumes in the wine category fell -5% between 2021 and 2022, and growth will remain flat over the next five years. The value picture, on the other hand, is more optimistic, with noticeable growth in the premium and higher segments (+2% in volume, 2022-2027), as well as a more lively outlook for sparkling wines (+2% in volume). “Lower price wines will suffer as younger and older wine drinkers become more fond of alcoholic alternatives and consume fewer but higher quality wines. Between 2022 and 2027, the price decline will be -1% yearly”.