Beverage alcohol market in Australia grows 3% – more than any other in APAC 

July 1, 2021
By Ioni Doherty

In total, beverage alcohol in Australia grew by about 3 per cent last year, more than any country in the region, reports drinks market analysts, IWSR.

IWSR research suggests that as mostly an off-trade market, Australia was easily able to compensate for on-premise losses in most categories during Covid via growth in retail, and the migration of travel retail sales to the domestic market providing an additional boost as well.

  • The beer category showed volume growth of nearly 3 per cent in 2020
  • The overall wine category saw a decline, but Champagne performed well, growing by more than 12 per cent.
  • Spirits and RTDs were the two categories that experienced the largest volume gains in 2020.

IWSR forecasts that the Australian total beverage alcohol market will soften slightly over the next 5 years.

Looking at the region more broadly, IWSR forecasts that long-term volume recovery in the APAC region will not return to pre-Covid levels until 2025 – a lag of two years behind the rest of the world.

Drawing data from 19 markets across the Asia Pacific region, IWSR report total beverage alcohol volume in Asia Pacific decreased by approximately 8 per cent in 2020 and project that beverage alcohol consumption in the Asia Pacific market will gain over 2 per cent in volume and over 4 per cent in retail value by the end of 2021.

“Though an unprecedented downturn, the decline in beverage alcohol in Asia Pacific was less than previously forecast, as several factors ultimately helped the industry last year,” said Sarah Campbell, Research Director for Asia Pacific at IWSR Drinks Market Analysis, “The acceleration of ecommerce, growth of RTDs, strong at-home consumption in key markets, and the resilience of countries such as China and Australia, will underpin the region’s growth going forward.” 

With the exception of wine, which is expected to continue to show volume declines at the regional level, each of the other major alcohol categories are projected to post volume growth in APAC :

  • beer at nearly 2 per cent
  • spirits under 0.5 per cent
  • ready-to drink (RTDs) at almost 6 per cent
  • cider at over 1 per cent volume CAGR 2021-2025.

Travel retail, hit particularly hard by Covid-led shutdowns in international travel and tourism, lost over 70 per cent volume in Asia Pacific last year, but IWSR predicts volume in the channel will grow by over 50 per cent in 2021.

IWSR’s comprehensive analysis of the beverage alcohol market in major countries in the region also shows:

China:

  • Due to its reliance on the on-trade, total beverage alcohol volume was hit hard by Covid (at close to 6 per cent 2019 to 2020). However, it is expected to grow by nearly 4 per cent in 2021
  • Flavoured spirits and RTDs performed well in 2020, as did single malts, one of the few drinks that Chinese consumers enjoy at home or in small groups (up 20 per cent in 2020)
  • Spirits overall were down close to 5 per cent in the country last year
  • E-commerce saw impressive growth in the market from an already large base, and online sales of beverage alcohol in China are expected to continue growing over the next five years, despite the market’s skew to the on-trade.

India:

  • With lockdown in India resulting in the closure of all bars and most liquor stores in the country, total beverage alcohol volume declined by close to 30 per cent last year
  • The market is expected to rebound to over 8 per cent volume CAGR 2021-2025
  • Total spirits are forecasted to grow by almost 5 per cent CAGR 2021-2025
  • Beer is expected to post growth of nearly 13 per cent volume CAGR 2021-2025
  • Whisky in India, the dominant spirits category, was down 16 per cent in 2020 but ultra-premium-and-above Scotch enjoyed growth, as did Irish and Japanese whiskies, driven by wealthy consumers in the market
  • It is worth noting that alcohol e-commerce does not play a critical role, due to government regulations and limited channel investment. 

Japan:

  • Total beverage alcohol was down close to 5 per cent in Japan in 2020, but the market is expected to rebound to preCovid volume levels by 2024, forecasted at over 2 per cent volume CAGR 2021-2025
  • The ready-to-drink category in Japan represents about 20 per cent of the global RTD market, and grew at close to 12 per cent in 2020
  • Total beverage alcohol volume in Japan is forecasted to grow over the next five years, with RTDs projected to grow at nearly 6 per cent volume CAGR 2021-2025.

Philippines:

  • Although total beverage alcohol volumes declined in the Philippines in 2020, the market is expected to post volume gains of nearly 7 per cent in 2021, and will continue to grow over the next five years
  • IWSR forecasts that total beverage alcohol volumes in the Philippines will rebound to pre-Covid levels by 2023
  • Although beer volumes declined in 2020, wine and spirits volumes both increased (wine by 3 per cent and spirits by almost 2 per cent)
  • Driving spirits growth was gin, up nearly 7 per cent last year – notable given that the Philippines is already the world’s largest gin market.

Singapore:

  • Total beverage alcohol volume in Singapore was down close to 9 per cent in 2020
  • This was driven by beer which represents over 80 per cent of all alcohol consumption in the market
  • About 75 per cent of wine volume in the market goes through the off-trade, which helped that category’s performance (up close to 12 per cent) thanks to increased at-home consumption and less widespread restaurant restrictions
  • IWSR forecasts that total beverage alcohol volume in the country will grow by about 4 per cent CAGR 2021-2025, bouncing back to pre-pandemic volumes by 2022.

Thailand:

  • The lack of international travel last year hit the nation hard as alcohol sales in the country are quite reliant on Western tourists
  • The large local spirits market remained resilient throughout 2020 due to innovation and off-trade dominance
  • IWSR forecasts that total beverage alcohol will post almost 4 per cent CAGR growth in the market 2021-2025, led by beer, wine, and RTDs.
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