Premiumisation stalls as difficult trading conditions persist

Alcohol spend continued to decline across most of the world’s major markets in 2025, as the long-running premiumisation trend slowed and even slipped into reverse thanks to falling consumer confidence and spend.

According to preliminary data from IWSR, total beverage alcohol (TBA) volumes in the world’s leading 21 markets [1] (plus global travel retail) declined by -2% during 2025, with value[2] down -4% – the first time in recent history that volume performance has outstripped that of value.

In category terms, volume declines were all but ubiquitous, with beer down -1% on the year, and declines for spirits (-1% excluding national spirits; -4% including them) and wine (-4%). RTDs, however, posted gains for volume (+2%) and value (+4%).

There are clear signs that premiumisation is taking a back seat, as TBA value fell for the first time since 2020, with spirits especially impacted. A few bright spots included the continued gains for no-alcohol and growth in emerging markets – India in particular.

“Despite rising GDP, the volatile political and trade landscape, and the embedding of lifestyle trends, continued to shape alcohol consumption during 2025,” says Marten Lodewijks, IWSR Managing Director & President. “High inflation, political polarisation and international conflict have dampened consumer confidence, leading to a reduction in alcohol spending across most T21 markets.

“This, coupled with consumers becoming more conscious and intentional in their alcohol consumption, is leading to people going out less, and consuming fewer categories when they do.”

Thanks to persistent pressure on disposable incomes, consumers are prioritising spend on fresh food, personal care and cleaning products: according to IWSR Bevtrac consumer research, recalled spend on alcohol in 2025 declined in every T21 market except for China and India, where research is confined to urban, middle-class consumers. A similar trend is observed in terms of on-trade visits, with no sign of channel recovery on the horizon.

“A turbulent 2025 has caused the drinks industry to recalibrate,” explains Lodewijks. “Tariff disruption and a cautious consumer put premiumisation strategies under pressure, while emerging markets offered a rare bright spot.

“The major multinational spirits players, whose prior strategies centred chiefly on continued premiumisation, are now shifting tack. Recent restructuring and leadership changes indicate a greater focus on volume, relevance and more evenly weighted portfolios across price tiers, rather than margin expansion.”

Key findings from IWSR’s preliminary data for 2025 include: