Global alcohol consumption is set to experience a sharper decline in 2025 than initially expected, according to the IWSR’s latest mid-year update. The global beverage alcohol volume is now projected to decrease by 0.4%, a revision from the earlier estimate of a 0.2% decline made in May. This adjustment reflects ongoing economic and policy pressures, particularly in the United States and China.
Economic Pressures in Key Markets
IWSR has also revised its value forecast for 2025, anticipating a 0.7% decline in global alcohol sales. The downturn is largely attributed to the beer category, which is now expected to shrink by 0.2% globally, a stark contrast to the previously forecasted 0.2% growth. This shift highlights the significant impact of even small consumption changes in the beer sector, given the large serving sizes involved.
Marten Lodewijks, managing director and president of IWSR, explained that the ongoing economic pressures in the US and China continue to impact alcohol consumption trends. In the US, rising cost-of-living challenges are causing consumers to reduce on-premise visits and shift to drinking at home. This change has weakened beer demand, as consumption patterns differ significantly between on-trade and at-home drinking.
Stricter Measures in China
In China, government measures, including a crackdown on luxury goods and a ban on alcohol at public sector events, have further dampened alcohol consumption. Additionally, slower economic growth has negatively impacted spending on alcohol in bars, restaurants, and other beverage alcohol sectors, leading to a downward revision in forecasts for beer and brandy.
Other Beverage Categories
Looking at other beverage categories, global spirits volumes are projected to decline by 1.3%, while wine is expected to see a 2.4% drop in 2025. However, ready-to-drink (RTD) beverages are emerging as a bright spot in the market. The RTD category is forecast to grow by 1.3% this year, with a 3% increase in the first half of 2025 across 20 key markets, outperforming other segments in the alcohol industry.
A New Mid-Year Forecasting Approach
This mid-year release is IWSR’s first-ever, responding to heightened market volatility and an increased demand for more frequent insights from clients. Going forward, IWSR will publish updates twice a year, in May and November, providing more timely information to better track market trends and shifts.
