It’s not necessary to once again go over the fact that the industry is struggling and will be for a long time. But who, or what, can help fix it?

The IWSR has released a report analysing the impact of the 2008 financial crash on the beverage alcohol industry. In the report, they assesses whether similar patterns may unfold globally in the wake of the COVID-19 pandemic.

But perhaps the most interesting is that while the pandemic started in China at the end of last year, the country may also be the one who can assist in providing a boost to the beverage industry.

According to IWSR figures, during the global economic downturn of 2008/9, the BRIC markets provided a much-needed silver lining: while global alcohol consumption in 2009 was essentially flat, it would have fallen by 2% without the contributions of the BRIC nations, where consumption volumes rose 3.7% in 2009.

Note that ‘BRIC’ refers to Brazil, Russia, India and China – four countries deemed to be at a similar stage of economic development.

With the expansion of these markets over the past decade, the industry cannot depend on them to shore up demand this time around, reports the IWSR, although China’s recent easing of lockdown restrictions might bring pockets of renewed growth.

“China is likely to provide a boost, especially if no further outbreak occurs, but Russia, India and Brazil will likely not provide as much of the demand this time around,” says IWSR CEO, Mark Meek. 

“The new ‘BRIC’ is Africa and I suspect that this region will be heavily affected by the low price of oil and the impending COVID-19 crisis likely to develop across the continent.”

The report also states that while beer will struggle following the pandemic, wine and spirits will come out better off.

Beer and cider were hard-hit in the 2008/9 economic crisis, due to a combination of duty rises, an on-premise slump and increased at-home consumption, which tends to favour spirits and wine, says the report.

Beer and cider sales dropped from 6% growth in 2007 to a 1% decline in 2009. The IWSR says the world will likely see the trend continue, with ongoing social distancing measures also likely to curtail sports fixtures, major events and festivals – all traditionally strong drivers of beer and cider consumption.

Meanwhile, Champagne consumption, often tied to celebratory drinking occasions, will likely be hit hard, with a slow recovery to reach pre-virus levels.

Sparkling wine, which has declined steeply in the short-term, should recover as lockdown restrictions ease in markets where it is viewed as an everyday drink, but sparkling wine celebration markets will likely take longer to return to growth.

For more from the IWSR, head to www.theiwsr.com

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