The global beer market is unlikely to grow by more than 2% per annum for the foreseeable future. However, the trends in ‘drinking less but drinking better’ continue to open up plenty of opportunities for the beer industry, according to GlobalData.
Super-premium beer up 5%
While beer growth rates had picked up again after the economic crisis of 2008-2009, they fell again post-2013 due to declines in China. But they are now showing an upturn, with 1% YoY growth in 2017.
However, the picture varies greatly by region: Africa, the Middle East and Asia all showed growth of around 4% CAGR 1999-2017.
Latin America and Eastern Europe have seen more modest growth rates just over 2%. Meanwhile, however, Australasia, North America and Western Europe were all flat or in decline.
The picture varies also by category. Against a 2% CAGR, discount and mainstream beers grew 1.6%: but premium beers grew 3.1% and superpremium beers grew 5%.
Globally, 37% of drinkers say they are willing to pay extra for an alcoholic drink that brings extra levels of enjoyment and indulgence. Premium beers also appeal to a younger demographic: with those under 54 more likely to choose a premium beer.
“Consumers are embracing a 'less but better' approach when making alcoholic beverage choices in order to justify spending - particularly in times of economic uncertainty,” said Kevin Baker, global research director for beer and cider, GlobalData, speaking at the International Beer Strategies Conference in London recently.
“Ale and craft beer drinkers in particular tend to seek premium or higher-end beer, although this tapers off with age.
"In emerging or developing markets the appeal of premiumization is anchored in the desire to demonstrate wealth and sophistication.”
Craft and beyond
Lager accounts for the vast majority (92%) of the market. But flavored beer and beer mixes are driving growth, appeal to consumers given their sweeter, easier to drink nature. Flavored beer grew 12% CAGR (1999-2017).
Craft volumes have continued their meteoric rise: and while the same level of growth may not be sustainable the category still holds firm.
“The underlying drivers of ‘craft’ – anti-globalisation; localism; a desire for small scale, exclusive products; and an interest in artisanal production methods - mean that ‘craft’ volumes are unlikely to fall,” said Baker.
However, it will become increasingly important for brewers to defend the perceived values of craft – such as high quality, authentic, local and unique.
Non-alcoholic beers and low alcohol beers have been growing: at around 4% and 3.5% respectively (CAGR in 1999-2017).
Around 84% of global drinkers are trying to reduce or moderate their consumption of alcohol.
And around 32% of consumers actively check for calorie contents or ABV when choosing their beer: a trend especially prevalent in Asia, Latin America and North America.
“Alcohol free beers are growing rapidly: driven by consumers desire to manage their alcohol consumption, and a re-positioning of these products as positive lifestyle choices. Low alcohol volumes have been boosted by the growth of Radlers," said Baker.
“Younger consumers (aged 18–34) are most likely to intend to cut down on alcohol for health reasons, with the attitude relaxing as consumers age. This can be attributed to a growing popularity of sporty lifestyles, as well as ever-increasing image-consciousness, as consumers try to limit their intake of calories."
However, strong beers – those classified as more than 5.5% ABV – are growing even faster than no and low alcohol beers (at just over 4% ABV), a reminder of the growth in craft and premium categories as well.