The global beverage alcohol industry entered a period of recalibration in 2025, as declining consumer confidence and economic uncertainty disrupted long-standing growth patterns.
According to new data from IWSR, total beverage alcohol (TBA) volumes across the world’s leading markets fell by 2%, while value dropped by 4%—a rare reversal in which value underperformed volume.
This shift marks a clear departure from the premiumisation-driven growth that has defined the industry over the past decade.
Premiumisation Trend Stalls
For years, premiumisation—consumers trading up to higher-priced products—has been a cornerstone of growth in the alcohol sector. In 2025, however, this trend slowed significantly and, in some cases, reversed.
The value of beer, wine, and spirits (excluding RTDs) declined by 1%, with premium-and-above segments underperforming in nearly half of the major markets. Spirits were particularly affected, with super-premium products experiencing a sharp 15% drop in value.
Consumers, faced with economic pressure and uncertainty, are becoming more cautious in their spending, increasingly opting for lower-priced alternatives or reducing overall consumption.
Declines Across Major Categories
Volume declines were widespread across traditional alcohol categories:
- Beer: -1%
- Spirits: -1% (or -4% including national spirits)
- Wine: -4%
Wine continues to face structural challenges, with declining consumption in key markets such as the United States, France, Germany, and the United Kingdom. However, there are signs that consumers are choosing fewer but higher-quality wines, softening the impact on premium segments.
RTDs and No-Alcohol Products Defy the Trend
While traditional categories struggled, ready-to-drink (RTD) beverages emerged as a key growth driver, posting a 2% increase in volume and a 4% rise in value.
At the same time, no-alcohol products continued their upward trajectory. Alcohol-free beer led the way with an 8% volume increase, significantly outperforming the broader beer category. No-alcohol spirits also gained ground, while alcohol-free wines saw growth in markets such as the US, UK, Canada, and France.
These trends reflect a broader shift toward moderation, health consciousness, and more intentional consumption.
Economic Pressures Reshape Consumer Behavior
The downturn in alcohol spending is closely tied to broader economic conditions. High inflation, geopolitical tensions, and political instability have all contributed to reduced disposable income and weaker consumer confidence.
As a result, consumers are prioritizing essential goods such as food, personal care, and household products over discretionary spending like alcohol. This shift is also evident in reduced on-trade activity, with fewer visits to bars and restaurants across most major markets.
The US Market Faces Tariff Disruptions
The United States experienced additional challenges in 2025 due to tariff-related disruptions. Trade tensions led to declines in both exports and imports, with Canadian retaliatory measures significantly impacting US wine and spirits.
Supply chains were also affected, as importers adjusted to rapidly changing tariff conditions, leading to stockpiling and shipment disruptions.
Emerging Markets Provide Growth Opportunities
Amid the global slowdown, emerging markets offered a rare source of optimism. India stood out with strong growth, recording a 4% increase in volume and a 5% rise in value across beverage alcohol.
Other markets, including South Africa, Thailand, Mexico, and Colombia, also posted gains, highlighting their growing importance for global producers seeking new avenues for expansion.
A Market in Transition
The developments of 2025 suggest that the global alcohol industry is entering a new phase. Rather than relying solely on premiumisation, producers are increasingly focusing on:
- Broader price segmentation
- Volume growth strategies
- Portfolio diversification
As consumer preferences evolve, adaptability will be key to navigating a more complex and uncertain market landscape.
Source: VinoVistara