After a difficult year for alcohol in 2024, when total beverage alcohol (TBA) volumes declined by 1% and revenue gains were elusive, with value up by just 1%, brand owners are facing up to an ever more complex and changeable market environment.
Against this increasingly volatile backdrop, six key trends have been identified and examined by IWSR, spanning everything from premiumisation to the external pressures of geopolitics and tariff tensions.
IWSR’s ‘Global Trends Report 2025‘, which has been published this month, analyses these six global macro trends in greater depth, breaking them down further into a number of sub-trends that explore 2025’s key market drivers.
Here’s a summary of some of the key trends.
Selective premiumisation
The global premiumisation trend is still evident, but has become less linear than in the past, fragmenting as a result of economic pressures and shifting consumer values. As the market landscape evolves and becomes more nuanced, growth persists in selected regions and around specific occasions.
Last year, according to IWSR data, premium-and-above volumes (excluding national spirits) grew by 3%, largely driven by beer. Growth was more apparent in South America, Asia and Africa & the Middle East, with North America and Europe more subdued.
Health concerns and economic considerations are leading consumers to drink less but choose higher-quality options when they do. Rather than being driven by status, people are increasingly motivated by purchases that reflect personal values, occasion relevance and perceived value.
This ‘selective premiumisation’ is particularly apparent in the perennially vibrant cocktail scene, which is fuelled by a growing desire for unique experiences and innovative offerings. RTD cocktails/long drinks volumes are forecast to double globally between 2019 and 2029, with North America seeing growth of up to 400%.
“As premiumisation becomes increasingly fragmented, brand owners must invest in monitoring consumer sentiment and data to identify emerging growth areas,” says IWSR‘s COO for research, Emily Neill. “Gaining a clear understanding of the dynamics between categories and the drivers of premiumisation will be key to unlocking new opportunities.”
Evolving lifestyles
Beyond TBA declines in key markets such as the US and China last year, reassessed priorities are leading consumers to pursue value for money, personalisation and immersive engagement – amid widespread downtrading and, for some, a reassessment of their relationship with alcohol, moving away from traditional consumption occasions.
Initially, economic pressures prompted consumers to reduce their alcohol intake, but many are now choosing to sustain this lower-consumption lifestyle. At the same time, at-home and virtual experiences are winning out over traditional socialising and alcohol consumption; increasingly, people are seeking connection and community online.
Meanwhile, tourism is on the rise – travel retail volumes increased by 3% in 2024, although spending remained cautious and value-driven – as consumers continue to prioritise value and unique travel experiences, with brands responding to this change in demand.
“To navigate economic pressures and shifting consumer behaviours, brands should offer value-driven products, craft immersive tourism experiences and embrace and capitalise on digital engagement,” explains Neill. “Recognising the shift away from traditional consumption occasions and tailoring offers to meet evolving demand for affordability, authenticity and virtual entertainment ensures relevance and resilience in a dynamic market.”
Digital and tech
E-commerce continues to offer growth opportunities, with global sales in value terms rising by 2% in 2024, thanks to strong performances for spirits, beer and RTDs, supported by affordability trends in emerging markets. Asia-Pacific, with a 4% e-commerce value gain last year, stands out as an engine for future channel growth.
E-commerce enables alcohol brands to bypass distribution barriers, connecting directly with consumers. At the same time, tech-driven convenience remains a key area, shaped by economic pressures and the appetite for accessibility – as brand owners diversify their operating models to service this demand.
In the digital world, celebrities and influencers are increasingly shaping trends among younger LDA consumers, with a strong focus on storytelling and sobriety. Meanwhile, celebrity-backed alcohol brands are experiencing mixed degrees of success, but RTDs are a category to watch as the digital narrative shifts towards moderation.
“Convenience and speed continue to be vital to e-commerce success, with emerging markets offering strong growth potential,” says Neill. “Meanwhile, reassessing the shift in celebrity endorsements towards lifestyle-focused branding could unlock new opportunities.
“Ultimately, convenience will remain a cornerstone of any effective strategy. Brands should focus on authentic, affordable, digitally-driven RTD offerings and personalised e-commerce strategies.”
Social drinking
Against a challenging economic backdrop, affordability is becoming key and status is being redefined. This is leading consumers to adjust their channel preferences, favouring earlier, experience-led occasions, including the increasingly pervasive aperitivo moment, where spritzes are proving especially popular.
While downtrading is apparent across retail and hospitality, the on-premise continues to tackle a number of headwinds, including policy-driven and structural costs, compounded by higher taxes and constrained consumer spend. Between 2019 and 2024, on-premise TBA volumes contracted in all regions except for Africa & the Middle East, where they grew by 4%.
The response of retailers and consumers to harsh economic conditions has reinforced the importance of at-home drinking, with consumers adapting traditionally on-premise occasions such as dinners and social drinks to home settings, in an environment where they can control expense and experience. In some parts of the world, DIY ‘third spaces’ such as unlicensed home bars are beginning to proliferate.
“Grasping evolving consumption occasions is essential in today’s marketplace, with shifting channel dynamics continuing to shape differentiation and the rise of third spaces,” explains Neill. “Tapping into lower-tempo, early evening moments presents clear opportunities. A strong cocktail offering is now crucial, and there’s still potential in appealing to consumers who prioritise both value and quality.”
Health and ethics
Motivations for moderation are broadening and deepening, influenced by both structural and cyclical factors. As consumers find an increasing number of reasons to cut their alcohol consumption, with more like-minded people around them to make the habit stick, switching between full-strength and zero-ABV drinks – ‘zebra striping’ – is gaining momentum.
Cross-category gains drove a 9% increase in total no-alcohol volumes in 2024, with beer still dominant but other categories gaining. No- & low-alcohol volume growth outstripped that of full-strength products in all regions last year except Asia Pacific, which was impacted by beer’s decline in China.
Meanwhile, cultural identity and value consciousness are driving preferences for local brands in some markets – especially in India, where national pride and favourable quality-price perceptions have led Indian single malts to outsell their scotch counterparts.
Cost pressures remain a limiting factor for sustainable products, but consumers – especially Gen Z and Millennials – still see sustainability as a cue for quality, and are willing to pay for it.
“As moderation evolves, brand owners must reassess how they compete, including addressing the diverse motivational and demographic changes,” says Neill. “While beer continues to spearhead no-alcohol growth, other categories are gaining momentum.
“Despite economic pressure, credentials like sustainability and local origins still offer tangible opportunities and should not be underestimated.”
External pressures
After a turbulent 2024, marked by ongoing conflicts and new geopolitical tensions, consumer behaviour continues to be shaped by persistent instability, trade disruptions and economic challenges. Even as inflation has eased, people have continued to shift their spend away from alcohol, instead prioritising necessities such as fresh food and personal care.
Against this backdrop of global uncertainty, beverage alcohol is confronting issues including fluctuating supply chains, evolving regulatory frameworks and shifting consumer preferences – requiring more immediate and adaptable responses from businesses.
The impact of tariffs and new trade arrangements varies by market and category: so, while scotch whisky producers will benefit from the new free trade agreement signed between the UK and India, they face higher trade barriers when exporting to the US.
At the same time, governments are tightening regulations, and public health messaging is becoming stronger, impacting consumption as a result – especially in parts of the world where trust in official advice is high, such as China, India, Latin America and South Africa.
“With uncertainty likely to persist, brand owners should adopt contingency strategies, review supply chains and explore emerging markets for growth opportunities,” says Neill. “Monitoring public health messaging and legislative changes will continue to be essential for global operators navigating geopolitical and regulatory challenges.”
