Alcoholic Beverages Market

Market Overview

The global alcoholic beverages market size was valued at USD 1,643.24 billion in 2023. It is projected to reach USD 2,105.53 billion by 2032, growing at a CAGR of 3.15% during the forecast period (2024–2032). Alcoholic beverages are the most widely consumed recreational substance on the Earth. The global alcoholic drinks industry is being driven by rising demand for alcoholic beverages and an increase in the young adult population worldwide. Trade volumes will need to increase to accommodate the growing population. As a result, players in the alcoholic beverages market will likely benefit from increased demand for alcoholic beverages as the population grows over the forecast period.

The market is prospering due to innovations and developments in the production of vodka, flavored wine, beer, and cocktails, as well as changing consumer lifestyles, beverage preferences, and an increase in the number of brewers and wineries throughout the world. Moreover, demand for premium and super-premium alcoholic beverages is increasing rapidly in developed and developing nations. The industry has also benefited from the increasing trend of socializing and mid-week/weekend gatherings among young and working professionals. As a result of increased urbanization, premium drinks have become associated with class and refinement, leading to increased consumption.

Market Dynamics

Global Alcoholic Beverages Market Drivers:

The Rising Urban Population and Rising Disposable Incomes

Because of the increasing urban population and rising disposable incomes, people in emerging economies are exploring new ways of entertainment, such as night parties and spending time in bars and lounges. Furthermore, young people with high family income, significant social media influence, and easy access to alcoholic beverages drive alcoholic beverage sales.Increased consumption of alcoholic beverages occurs in urban areas due to high-pressure jobs and the belief that drinking alcohol relaxes the mind. Alcoholic beverage manufacturers are constantly introducing new flavors to their products. Curiosity motivates customers, particularly millennials, to try these products, which are suitable for the alcoholic beverage industry.

Innovations in the Contents of Alcoholic Beverages

The primary ingredients in alcoholic beverages are usually ethanol and water, with some containing significant amounts of sugar. In addition, they've come to include a variety of other flavor and scent enhancers, such as herbs and spices. New consumer propositions will emerge as a result of focusing on fragrance and flavor. Companies are focussing on creating fun, fruity, tropical, citrusy, and smoky flavors along with unique twists on classics to satisfy the consumers’ cravings for new and innovative drinks.

Global Alcoholic Beverages Market Restraints:

Emerging Energy Drinks and Consumer’s Health Perspectives

Non-alcoholic and energy drinks threaten business by replacing various alcoholic beverages as consumers' perceptions of health and well-being influence their purchasing decisions. Chronic illnesses and other grave issues, such as high blood pressure, heart disease, stroke, liver disease, and digestive issues, can develop over time as a result of heavy alcohol consumption. Consumers are more conscious of health than ever before, and the industry may face a challenge due to this increased awareness of the dangers of alcoholic beverages.

Regional Analysis

North America, Europe, Asia Pacific, the Middle East, Africa, and Latin America (LAMEA) make up the global alcoholic beverages market.

The European market for alcoholic beverages accounts for the largest global market share. It is expected to grow at an optimal CAGR due to the high demand for alcoholic beverages in the region and prominent players. According to Eurostat, more than a third of Europeans aged 15 and more consume alcohol at least once a week. Furthermore, the United Kingdom has a higher demand for alcohol, with 45 percent of people drinking once a week than 41 percent in Ireland and Luxembourg and 40 percent in Germany and Denmark. Different countries in Europe have different alcohol preferences. These preferences have historically been connected to particular geographic areas. Beer drinking is associated with the Central European part of Europe, wine drinking is associated with the Mediterranean part, and spirit drinking is associated with the Eastern and Northern European parts.European countries with the highest alcoholic beverage demand include Lithuania, the Czech Republic, France, Ireland, and Belarus.

North America makes up a significant portion of the market. An increase in beer demand and a leaning tendency toward alcohol usage are two factors driving the global alcoholic drinks market. According to the BREWERS ASSOCIATION, craft beer and export craft beer sales have increased by 3.2%, and 3.6 %. Another factor driving market expansion is product innovation by manufacturers to increase their market share. The whiskey market is expected to grow by 3.2%.In the U.S., alcohol has a significant cultural impact.Socially, Americans associate drinking alcohol with events like gatherings and parties. Additionally, drinking is promoted as a requirement for a pleasant time with friends.When visiting friends or family, adults around the country often bring alcoholic beverages with them as presents.

Because of the growing demand for alcoholic beverages and many young and adult populations in the region, the Asia Pacific alcoholic beverages market is expected to grow rapidly. The Asia-Pacific alcoholic beverage market is expected to grow during the forecast period.The Asia-Pacific region is currently experiencing an increase in alcohol use as a result of changing lifestyles, greater disposable money, and a relatively young population. Additionally, the adoption of western culture, alcohol consumption seen as a social and leisure activity, and an increase in parties and celebrations are factors in the rise in alcohol consumption in the region.

Due to increased tourism in recent years and a surge in demand for alcoholic beverages in the duty-free retail segment, the alcoholic drinks market in Africa is expected to grow significantly in the upcoming time. In Latin America, Mexico and Brazil are among the leading consumers of alcohol. Alcohol is banned in some countries in the Middle East region, including Saudi Arabia, Iran, Kuwait, Yemen, and the Emirate of Sharjah. Even in those nations where alcohol consumption (and, in some circumstances, manufacture) is legal, consumption is still quite low.

Segmental Analysis

The global market for alcoholic drinks is segmented by distribution channel and types.

Based on distribution channels, the global alcoholic beverage market is segmented into supermarkets, liquor stores, bars/clubs, resturants and others

Liquor stores are expected to dominate during the forecasted period. Liquor stores are convenient and accessible, especially in urban areas, where they provide a quick and easy way to purchase alcoholic drinks without traveling far or waiting in long queues. Liquor stores offer a wide range of products, from branded liquors to local and craft beverages, that cater to different tastes and preferences of consumers.

Supermarkets are expected to grow during the forecasted period. The growth of the supermarket segment can be attributed to partnerships between supermarkets and significant players in the global alcoholic drinks industry. In the U.S., the supermarket segment accounts for around 50% of the alcoholic beverages market. Supermarkets provide manufacturers access to a larger customer base which results in an increase in sales.

Based on type, the global alcoholic beverage market is segmented into distilled spirits, beer, champagne, wine, and other alcoholic beverages.

Beer has the largest market share due to its growing popularity worldwide.Understanding consumer preferences for different beer flavors and events has helped companies create lasting relationships with their clients. Beer taprooms are growing in popularity and contributing to the crowd-sourcing of new beer flavors.

Distilled spirits are the second most dominating category. Distilled spirits are made by distilling a mixture created by the fermentation of alcohol. The main effects of distillation are an increase in alcohol concentration and a decrease in water-related dilution. Because of this, distilled spirits have more alcohol in them than beverages that are brewed.

Recent Developments

• June 2022- Asahi Group Holdings, Ltd. announced through a joint venture company, Asahi Breweries, Ltd., the company that handles the Group's alcohol beverages business in Japan, thatit would launch the Shibuya Smart Drinking Project on June 29th. Asahi Breweries has been advocating "Smart Drinking,” which promotes diversity in drinking. By working more closely with various external partners, including corporations and local governments, they aim to solve social issues and help create a society that embraces diversity in drinking.
• February 2022- Danish brewer Carlsberg announced that it would look for growth beyond its core product which is beer, and develop beverages that consumers are looking for, like cider, hard lemonade, and hard seltzers.
• August 2021- Boston Beer and PepsiCoteamed up to create an alcoholic version of Mountain Dew.Boston Beer developed and produced thedrink called Hard Mountain Dew, while Pepsi has created a new entity to sell, deliver and market the product. The beverage hit shelves in early 2022.