The alcohol market showed better-than-expected resilience in 2020 but suffered significant declines nonetheless.
According to the research data analyzed and published by StockApps, the sector was expected to suffer double-digit sales declines based on May 2020 projections. However, the researcher later reviewed the forecast downwards, estimating an 8% annual sales decline.
The downtrend was clearly evident in the performance of top industry players during the year. Anheuser-Busch InBev (AB InBev), which was rated as the largest beer company globally by revenue in 2019, posted an annual revenue decline of 3.7% in fiscal 2020.
Its sales for the year amounted to $46.88 billion, down from $52.33 billion in FY19. Gross profit fell from $31.97 billion to $27.25 billion, marking an 8.2% year-over-year (YoY) decline. For the full year, there was a decline of 5.7% in volumes.
The first nine months of the year were especially tough for the Belgium-based brand. During the period, its total volume fell by 8.2% leading to a revenue drop of 12.5%. At the time, beer volume was down by 8.3% in spite of a 2.6% increase in beer volume in Q3.
However, there was a considerable recovery during Q4 2020. The brewer’s core profit outperformed expectations, reaching $5.07 billion against an anticipated $4.80 billion.
For Heineken Holding, the second-largest brewer by revenue globally, 2020 annual revenue fell by 16.7% to €23.77 billion ($29.08 billion). Operating profit for the year amounted to €778 million, marking a 78.6% decline YoY.
On the other hand, Asahi Group Holdings saw its annual revenue fall by 3% to 2.028 trillion yen ($18.973 billion).
In total, the three beer giants raked in a cumulative $94.93 billion for the year, compared to $98.3 billion in 2019.
Low- and No-Alcohol Beverage Sales Shot Up by 33% in 2020
On the global front, the alcoholic beverage market had relatively slow growth in 2020. From $515.2 billion in 2019, the sector grew at a 2.6% CAGR to $528.5 billion. In the period between 2021 and 2023, it is projected to recover, growing at a 7% CAGR. By the end of the period, it will be valued at $647.7 billion.
In stark contrast to the performance of alcoholic beverages, low- and no-alcohol drink sales soared by 32.7% in 2020 according to IWSR. Global sales in the category are expected to rise by 31% by 2024.
The researcher based these results on an analysis of 10 key markets which account for 75% of the global low- and no-alcohol market. This category increased its share of the overall alcohol market by 3% during the year.
Low-and-no beer and cider accounted for 92% of all sales in the category. However, the spirit sector had the highest growth in spite of holding a 0.6% market share. It grew by an impressive 32.7% while beer only grew by 0.5%. On the other hand, low-and-no wine grew by 4.9%.
Notably, no-alcohol products vastly outperformed low-alcohol, growing by 4.5% compared to a 5.5% decrease for the latter.
US eCommerce Alcohol Sales Rose by 80% vs. 23% Growth in China
With consumers adjusting to the impact of the pandemic, alcohol eCommerce enjoyed considerable growth in 2020. According to IWSR research, the value of the market was estimated to grow by 42% across 10 core markets to $24 billion.
Comparatively, the 2019 growth rate was 11% in the same markets which account for 90% of global alcohol eCommerce value. By 2024, the value of the alcohol eCommerce market across a total of 20 key global markets is expected to surpass $40 billion.
China has been the largest online alcohol market worldwide. But its growth rate, which was 23% in 2020, was significantly slower than that of the US among other key regions. The reason behind this is that online alcohol business in the country is already well established.
Based on an IWSR estimate, online demand for alcoholic beverages in the US shot up by 80% in 2020. Digital alcohol sales rose from about $3 billion in 2019 to an estimated $5.6 billion. In view of that astounding growth rate, IWSR forecasts that by the end of 2021, the US will be the largest alcohol eCommerce market ahead of China.
In the period between 2019 and 2024, the market value of the US online alcohol market will grow six-fold. It will go from being about half the size of China’s market, to nearly doubling it.