The global drinks industry is gearing up for what could be described as a "subdued but opportunity-rich" trading environment in 2025. Research from IWSR highlights five key trends expected to shape the industry over the next year as it battles persistent inflation and shifting consumer preferences.
After experiencing a tumultuous 2024 characterized by inflation pressures and geopolitical tensions, the drinks industry finds itself at a crossroads. While traditional markets like the US and Europe struggle with consumer purchasing power, the story looks quite different for several burgeoning economies. Countries such as India, South Africa, and various nations from South-East Asia and Latin America are showcasing resilience, driven by younger demographics and growing middle classes eager to explore premium products.
Emily Neill, COO of IWSR’s research & operations, emphasized the nuanced environment facing beverage alcohol. “Channel shifts offer a note of optimism, with the on-premise showing nascent growth in some key markets, and digital platforms wielding a growing influence on both online and offline purchasing decisions.” Navigators of this complex market will need to assess growth opportunities on various levels—whether it be market, category, or price-tier.
A major trend identified is the rise of moderation strategies among drinkers across all demographics. “Drinkers are now more habitual in their control of alcohol intake,” states Susie Goldspink, IWSR’s senior insights manager for RTDs & no- & low-alcohol. This shift is evident as behaviors such as lighter consumption and temporary abstinence take center stage. The movement toward single-category occasions is also noteworthy; the average number of beverage categories consumed per occasion dropped from 2.4 in 2023 to 1.8 in 2024. Goldspink noted, “The moderation trend goes mainstream, reshaping beverage alcohol consumption patterns.”
Looking at the financial forecast, IWSR predicts no/low volumes will expand at a CAGR of +4% from 2024 to 2028, with the no-alcohol category leading the charge at +7%. This expansion could result in over $4 billion of growth by 2028.
Developing markets are set to be the major growth engines over the next five years. Population dynamics and economic growth position countries such as India and China as leading contributors to future revenue. Neill stressed, “Gains from mature markets will prove more elusive—with many seeing marginal growth or even contracting.” Meanwhile, markets such as Vietnam, Brazil, and Nigeria will experience significant upticks due to rising disposable incomes and a more relaxed regulatory environment.
The casual consumption trend plays nicely with the rise of products like Prosecco and RTDs, transforming how consumers engage with different beverage categories. “The shift from formal, high-profile drinking occasions to more casual and spontaneous settings is transforming the beverage alcohol,” noted Richard Halstead, COO consumer insights & custom analytics at IWSR. Popularity for these drinks is soaring particularly at informal gatherings, as consumers replace high-cost options with more accessible alternatives.
Interestingly, the premiumization movement for beer continues, distinguishing it from spirits and wine. This trend has seen premium-plus beer volumes rise by 2% overall during the first half of 2024, which contrasts with declines recorded by premium spirits and wine. Roisin Vulcheva, IWSR's senior insights manager for beer, explains, “Growth of premium-plus beer is being driven by the affordability trend.” While high-income drinkers are more likely to choose quality over quantity, lower-income groups are increasingly engaging with affordable products.
Channel shifts have also had significant impacts on purchasing decisions. Recent IWSR data indicates increased on-premise consumption across various regions. Younger consumers, particularly Millennials, are exhibiting stronger tendencies to dine out and engage with premium beverages such as scotch whisky and liqueurs. Halstead shares, “After years of disruption, the on-trade channel is showing signs of revival.”
Now more than ever, digital platforms are informing offline purchases. Research from IWSR shows 63% of online alcohol buyers conducting thorough research prior to making purchases. This digital influence is echoed by offline shoppers who are also relying on online sources like brand websites and product reviews.
The beverage alcohol industry faces the challenges of economic unpredictability head-on, but the resilience of developing markets, alongside changing consumer behaviors, point toward potential growth. The trend toward moderation, casual consumption, and premiumization provide glimmers of hope amid uncertainty.
With the onset of 2025, actors within the drinks industry must capitalize on these trends to navigate the complex and ever-evolving marketplace. By embracing change and anticipating consumer needs, brands can position themselves for sustainable growth year-round.