Beverage alcohol brand owners face a complex but promising landscape in the Asia Pacific (APAC) region.
While 2024 marked a challenging year with total beverage alcohol (TBA) volumes down by -2% and value by -3%, emerging pockets of growth and evolving consumer preferences across India and Southeast Asia suggest that strategic agility and targeted investment could yield long-term rewards.
Mixed Fortunes Across the Region
APAC’s performance in 2024 reflected diverging trends. RTDs (ready-to-drink beverages) stood out as the only category with volume growth (+1%), while beer (-3%), spirits (-2%), and wine (-4%) all registered declines. A closer look reveals country-specific dynamics that defy regional generalizations.
India emerged as a growth engine with a +6% increase in TBA volumes and an impressive +19% growth in premium-plus consumption. In contrast, China struggled, seeing TBA volumes fall by -5% amid economic headwinds and shrinking consumption occasions for premium spirits.
Southeast Asian markets like the Philippines, Thailand, and Vietnam posted modest growth (+2%), whereas Japan, South Korea, and Australia experienced volume declines of 1–3%.
India: The Rising Powerhouse
India’s beverage alcohol market is maturing rapidly. While whisky remains dominant, consumer experimentation is surging, evidenced by significant volume growth for Irish whiskey (+58%) and vodka (+17%). The recently signed UK-India free trade agreement will reduce Scotch whisky and UK gin tariffs from 150% to 40% over ten years, creating substantial upside for imported premium brands.
Scotch whisky volumes are projected to grow at a CAGR of +7% and gin at +3% through 2029. Urban affluence and rising disposable incomes continue to drive status-led purchases despite minor moderation trends.
China: Recalibration in Progress
China’s underperformance is notable, with baijiu (-5%), Cognac (-14%), and Scotch whisky (-8%) all declining in volume. Shifts in consumption habits, a weakening economy, and reduced prestige-driven demand are challenging premium brands.
Yet not all is bleak. Gin (+20%) and vodka (+4%) benefitted from the popularity of cocktails, and sparkling wine (CAGR +5%) is poised for steady growth. Brands must pivot toward affordability and everyday relevance, particularly as traditional on-trade channels falter.
Spirits: Category Shifts and Emerging Contenders
2024 saw a shake-up in spirit preferences across APAC. While Cognac and Scotch struggled, Irish whiskey (+27%), Tequila (+14%), gin (+11%), and aperitifs (+24%) surged forward from smaller bases. India and the Philippines led the charge, with significant volume contributions.
Though spirits volumes are forecasted to dip through 2026, a rebound is expected by 2027–29, largely driven by India and Southeast Asia offsetting China’s baijiu-related decline.
Wine: Slowing the Slide
Wine saw a -4% volume decline in 2024, a slowdown from -8% in 2023. Still wine continues to contract, especially in China, Japan, and Australia. However, sparkling wine offers bright spots, with Australia (CAGR +2%), China (+6%), and India (+8%) showing future growth potential.
While volume declines are expected to continue, the pace will slow, particularly with positive movements in India, the Philippines, Thailand, and Vietnam.
Beer: Gearing for Recovery
After a -3% drop in 2024, beer volumes are expected to bottom out before returning to growth from 2026 onward. India (CAGR +3%), Indonesia (+3%), and Vietnam (+1%) will be key contributors, supported by young, expanding populations and improved economic conditions.
Conversely, Japan (-2%) and Australia (-1%) are likely to see continued contraction.
RTDs: Brightest Growth Star
RTDs are the most dynamic category in APAC, with sustained growth driven by convenience, innovation, and appeal to younger consumers. Japan, already the category leader, is set for a +3% CAGR through 2029, with South Korea (+10%), India (+6%), and China (+2%) also contributing to the momentum.
Although Australia’s RTD market has matured, the overall trajectory for the category across APAC remains positive and expansionary.
Conclusion: Opportunity Through Agility
The APAC beverage alcohol market is entering a value-driven phase where premiumisation is no longer a universal strategy. Instead, success hinges on adaptive strategies tailored to local dynamics—whether it’s leveraging demographic tailwinds in India and Southeast Asia, recalibrating premium positioning in China, or innovating in RTDs and spirits.
Brand owners who stay invested and act nimbly will be best positioned to unlock growth across the region’s shifting terrain.
Source: IWSR