Developing markets key to future TBA growth after lacklustre 2024

The value of the world’s core beverage alcohol markets is expected to expand by US$34bn* over the next decade, despite ongoing economic and political challenges which curtailed growth during 2024, according to comprehensive new data and forecasts from IWSR.

The increase equates to +3% absolute value growth between 2024 and 2034 across the world’s biggest markets. Between 2024 and 2029, global total beverage alcohol (TBA) value across all 160 IWSR markets will grow by US$16bn, or +1%.

The new forecasts come after another challenging year for the industry: global TBA volumes shrank by -1% in 2024, although value increased by +1%, equating to a US$8.5bn gain. Contractions in the US and China contrasted sharply with gains in India and Brazil, reflecting the increasingly vital role to be played by developing markets for beverage alcohol in the years ahead.

Using its new 10-year forecasting tool, IWSR is predicting that TBA volumes across the top 31 markets will remain stable through to 2034. However, the only category expected to decline over that period is wine, with a predicted 2024-34 CAGR of -1%. RTDs are set to grow at a CAGR of +2%, while spirits, beer and cider will be essentially flat.

TBA value across these core markets as a whole is also expected to be essentially flat to 2034 – although all categories are predicted to outperform their forecast volume expectations in value terms as consumers continue the long-running trend of drinking less while spending a bit more.

Nonetheless, there are clear pockets of growth to be exploited in the years ahead: within beer, Mexico, India and Vietnam will add significant volumes and, even in large but declining markets such as the US, China, Germany and Japan, there are opportunities in segments including no-alcohol, stout and other speciality beers. The premium and super-premium segments are set to be the standout performers here.

Among spirits, Tequila will enjoy strong growth in all markets outside Mexico, expanding at CAGRs of +2% (volume) and +3% (value) across the top 31 markets between 2024 and 2034. Scotch whisky will see strong growth in India – poised to become its largest market by 2027 – and in Türkiye, expected to grow at a CAGR of +4% to 2034, becoming Scotch’s fourth-largest market by 2030. Meanwhile, spirit aperitifs will enjoy 4% annual growth across the leading 31 markets to 2034, with Brazil, Poland and the US making substantial gains.

“The main challenge for brand owners over the next few years will be balancing the resource demands of the developing markets, which offer the best chance of top-line growth, with the need to manage the much larger but declining markets which have been the drivers of growth for the past 20 years,” says Emily Neill, IWSR COO, Research & Operations.

“At the same time, they will need to focus on finding growth opportunities across categories and price tiers, in both developing and developed markets. One example here is premium beer in the UK, where innovation and targeted marketing created significant growth in 2024, despite it being a very mature market where the overall category is in structural decline.”

The release of comprehensive new data and forecasts coincides with the launch of IWSR’s new 10-year forecasting tool, which covers the leading beverage alcohol markets, which account for 80% of global volumes.

IWSR’s latest analysis of the global beverage market also includes the following highlights:

Dynamic developing markets to fuel growth

The flat forecasts for future TBA growth conceal a seismic shift in the beverage alcohol landscape, with developing markets poised to become the key drivers of growth between now and 2034.

The largest contributors to value growth over the next decade are developing markets, India, Brazil, Mexico and South Africa, with an expected incremental growth of $28bn. China is an exception of the developing markets and is forecast to decline, due to demographics and ongoing structural declines in the local, lower-priced end of the beer and spirits categories. Many developed markets are predicted to shrink over the forecast period with Germany, US, and the UK, expected to reduce by $6bn.

The forecasts come after a difficult year in 2024 for the industry in its two largest markets: TBA volumes fell by -3% in the US, and by -5% in China. All major categories registered declines in China last year – and, in the US, the only category not to shrink was RTDs, which was flat.

“Beverage alcohol growth momentum has decisively shifted towards developing markets, with India likely to be the biggest engine of value growth for the next decade, followed by Brazil and Mexico,” explains Emily Neill.

“Our new 10-year forecasts really lay bare the magnitude of the change that is coming, as the combination of demographic changes, shifting economic growth patterns and the long-run moderation trend in developed markets take full effect.”

India ascending

India was the world’s key growth market in 2024, adding +6% in TBA volume and +9% in value – mostly driven by beer and whisky, but with expansion across all major categories.

According to IWSR forecasts, India will be responsible for almost 50% of forecasted value growth to 2034, with gains driven in particular by whisky and beer.

In the process, it will become the world’s largest market for Scotch whisky by 2027, reinforcing its current position as Scotch’s largest destination in terms of shipments, which include bulk imports destined for domestically produced IMFL whiskies.

“India’s strong economic growth and growing adult population are set to drive growth in beer, spirits and RTDs,” says Emily Neill. “As well as becoming the world’s biggest market for bottled Scotch by 2027, India is expected to become the world’s third most valuable TBA market, behind China and the US, by 2032, eclipsing the UK.”

Developing market highlights

While India is the standout driver of future TBA growth, a number of other developing markets for beverage alcohol are also poised for strong gains in the years ahead:

• Brazil’s TBA volumes grew by +1% in 2024 – a significant gain, given the size of the market – while value was up +5%. Premium beer was a major driver of this growth, along with RTDs and brandy.

• In Türkiye, beer is growing well across all price brands, and premium-plus whisky is recruiting from the country’s traditional raki category. Rising Scotch whisky consumption will see the country overtake Brazil and the UK in volume terms by 2030 (2024-30 CAGR of +5%).

• South Africa is another bright spot, with strong TBA growth driven largely by beer and RTDs – including wine-based RTDs, which are perceived as a trendy and affordable alternative to traditional wine.

No-alc beer’s inexorable rise

Overall beer volumes are continuing to decline, with lager’s -1% dip in 2024 mainly caused by shrinking consumption rates in China and the US. However, growth spots include no-alcohol, stout and speciality styles.

No-alcohol beer’s recent strong performance is expected to continue, with robust gains forecast across a number of markets, but especially in the US, which is set to add US$2bn of incremental value over the next five years, and in Brazil (US$0.5bn). No-alc is set to overtake ale in 2025 to become the second-largest beer segment, behind only lager, thanks to a forecasted +8% gain in 2024-25.

Premiumisation persists, but evolves

Premiumisation remains a significant feature of the beverage alcohol landscape, playing a role in categories as diverse as beer, RTDs and Tequila.

In otherwise flat beer markets, premiumisation offers pockets of potentially lucrative growth: premium beer was the only price band to see growth in China in 2024, and the same was true for super-premium beer in the US.

The premium and super-premium price tiers were the only sources of growth for beer in Brazil – and premium beer grew by +8% in the UK on the back of a dynamic performance by stout, almost offsetting the decline of standard beer.

This value trend is set to continue, with premium beer forecast to expand at a volume CAGR of +2% across the top 31 markets between 2024 and 2034; for super-premium beer, the predicted CAGR over the same timescale is +3% – compared to flat projections for beer as a whole.

Meanwhile, RTD volumes grew by +2% globally in 2024, with value rising by +5% – reflecting the increasing importance of higher-value products. Continued declines for hard seltzers are paving the way for gains among cocktails & long drinks.

Tequila’s strong forecast value growth of +2% CAGR to 2029 will be driven by continued demand for premium and ultra-premium products in the US, and more broadly in global travel retail.

“Premiumisation is becoming selective, with certain spirits categories such as agave continuing to see uptrading, and premium beer enjoying ongoing growth in both mature and developing markets,” explains Emily Neill. “On the other hand, we are seeing widespread evidence of downtrading in categories such as vodka.”

Wine’s woes continue

Wine’s continuing troubles are reflected in the fact that it is the only major category expected to decline in volume terms across the 31 leading markets to 2034, with a forecast CAGR of -1%.

Higher price points are likely to be central to future growth opportunities: in Portugal, despite the wine market being in overall decline, premium-plus segments are enjoying good gains thanks to strong tourism and the increasingly influential ‘less-but-better’ movement.

*2034 forecast based on 31 key markets plus travel retail (marked as DF=Duty Free) which represents about 80% of TBA (Argentina, Australia, Austria, Belgium and Luxembourg, Brazil, Canada, Chile, China, Colombia, Denmark, DF Africa, DF Americas DF Asia, DF Europe, France, Germany, India, Italy, Japan, Mexico, Netherlands, Nigeria, Philippines, Poland, Romania, South Africa, South Korea, Spain, Switzerland, Taiwan, Thailand, Türkiye, United Kingdom, United States, Vietnam). Value is in USD using variable exchange rate for actuals up to 2024, fixed rate for forecasts.