Asia Pacific: Alcohol sales expected to gain over 2% in volume by the end of 2021

Sales of alcohol in Asia Pacific are expected to gain over +2% in volume and over +4% in value by the end of 2021, according to IWSR Drinks Market Analysis.

IWSR’s examination of data from 19 markets across the Asia Pacific region shows that total alcohol volume in Asia Pacific decreased by around -8% in 2020.

The drinks analyst forecasts that long-term volume recovery in the Asia Pacific region will return to pre-Covid levels by 2025; two years later than global alcohol’s forecasted rebound.

With the exception of wine, which is expected to show volume declines, each of the other major alcohol categories are projected to post volume growth in Asia Pacific.

Beer is forecast to grow at nearly +2%; spirits under +0.5%; RTDs at almost +6%; and cider at over +1% volume CAGR 2021-2025.

“Though an unprecedented downturn, the decline in beverage alcohol in Asia Pacific was less than previously forecast, as several factors helped the industry last year,” said Sarah Campbell, research director for Asia Pacific at IWSR.

“The acceleration of e-commerce, 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,” Campbell added.

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

The sector’s recovery will be aided by the Chinese government’s decision to designate Hainan as a duty-free territory for alcohol.

Alcohol sales in Australia grew by around +3% last year, the most of any country in the Asia Pacific region.

The beer category showed volume growth of nearly +3% in 2020, a bright spot against beer’s general declining trend in other global markets.

The overall wine category saw a decline, but Champagne performed well, growing by more than +12%. Spirits and RTDs were the two categories that experienced the largest volume gains in 2020.

China was hit hard by on-trade closures last year, leading to total beverage alcohol volume declines of -6%. However, the IWSR forecasts growth of nearly +4% this year.

Flavoured spirits and RTDs performed well in China last year, as did single malts, which enjoyed 20% growth in 2020, while online alcohol sales boomed.

With lockdown in India resulting in the closure of all bars and most liquor stores, total beverage alcohol volume declined by nearly -30% last year. The market is expected to rebound, however, to over +8% volume CAGR 2021-2025.

Total spirits are forecasted to grow by almost +5%, and beer is expected to post growth of nearly +13% volume during that same period.

Whisky in India, the dominant spirits category, was down -16% in 2020 but ultra-premium-and-above Scotch enjoyed growth.

In Japan, total alcohol sales were down by nearly-5% last year, but the market is expected to rebound to pre-Covid volume levels by 2024.

The RTD category in Japan represents around 20% of the global RTD market, and grew at close to +12% in 2020. RTD sales are forecast to grow by 6% in Japan over the next five years.

In Singapore, alcohol sales slid by -9% in 2020, driven by beer, which represents over 80% of all alcohol consumption in the market and saw volumes plummet.

The IWSR forecasts that total alcohol volume in the country will grow by around +4% CAGR 2021-2025, bouncing back to pre-pandemic volumes by 2022.

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