Global beer market shows growth without China

The above would appear to make sombre reading for the beer industry, but dig deeper into the numbers and it becomes evident that if you discount China, where volumes have fallen back by as much as -12% in the period, then the global beer market is in growth by 1%. The beer market is in a better place than many might think.

There remains plenty of fertile ground to cultivate and demand is responding very positively to the investment from the global brewers in a number of countries. The IWSR’s top 10 beer growth markets (of the top 50 by volume) includes three African countries – Ethiopia, Angola and Tanzania. Ethiopian beer volumes have doubled in just five years as consumers in Africa’s fastest-growing economy are spending some of their newfound wealth on beer. Growth has been so brisk that Heineken has recently expanded its Kilinto Brewery to cope with the extra demand. Angola’s economy may have soured in recent years, but this has encouraged drinkers to switch to beer, where substantial investment in local production has pushed prices down, making beer more attractive than other alcoholic alternatives.

Asia can also boast three markets in the top 10 – Vietnam, Taiwan and the Philippines. Recent duty rises dented beer growth in Vietnam last year, but the category had jumped by more than a third in the five previous years. Despite price rises in 2018, beer remains fashionable in Vietnam and there is even the emergence of a craft beer segment with several brewpubs opening up. Taiwan too is developing a taste for craft beer and now has as many as 15 microbreweries helping the market to increase by a fifth in five years. Competition between San Miguel and Heineken’s Tiger brand has helped fuel the rise of beer in the Philippines.

Mexico, Peru and Chile are the representatives from the Americas in the 10 worldwide markets setting the pace. Fierce competition between Moctezuma (Heineken) and Modelo (AB InBev) is benefiting the whole market in Mexico, which has increased by more than a quarter in the period. At around 50 litres, per capita levels point to long-term growth for Peru and Chile.

It is not just developing markets where beer is prospering. Spain’s economic recovery has gained momentum during the five-year period, encouraging beer consumption.

It is not just developing markets where beer is prospering. Spain’s economic recovery has gained momentum during the five-year period, encouraging beer consumption, but the category is also taking share from wine and spirits. France too is not a traditional beer market and per capita is as low as 33 litres. Culturally, there is a wine consumption heritage and the 14% five-year growth is driven by a shift from wine to beer among younger consumers. Beer’s share of alcoholic throat in France has grown from 38% to 42% between 2013 and 2017. The category is very much in vogue in France, something that is reflected in the number of breweries having doubled to more than 1,200 in just three or four years. The surge in French craft-style producers demonstrates the role that craft beer has played in the recent success of beer in the country.

The craft stimulus is a theme being seen in a plethora of rising markets across the world. Craft beer has raised the profile of the category globally, but its influence has probably been most keenly felt in established beer heartlands like the US and northern Europe, where per capita had reached a peak and many longstanding mainstream brands had gone stale. Craft beer has reinvigorated the interest in beer in places where grinding out volume growth was becoming more and more challenging.

Not only has craft sparked interest back into the sector in stagnating markets, it has added value and meant that consumers are prepared to pay more for their beer.

Not only has craft sparked interest back into the sector in stagnating markets, it has added value and meant that consumers are prepared to pay more for their beer. The need to focus on value and not volume will become increasingly important as evolving consumer attitudes to alcohol show that many Millennials and even older consumers are looking to cut back on their alcohol intake.

The impact of craft on value is evident in the IWSR’s data, which shows that the market value between 2013 and 2017 has actually increased by nearly 12%. In terms of average prices, in 2013 the global average price for beer was $2.05, but by 2017 it had reached $2.34. It is value and not volume that pays the bills and the results should be celebrated.

Want a more detailed breakdown of global beer figures? Take a look at the IWSR Global Database