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- Technical contribution
Beverage trends – Through the crisis with creativity
2020 was an exceptional year in every respect - which is why no reliable forecasts for 2021 can be derived from the sales figures for the Corona year. Nevertheless, the trade journalist Friederike Arndt tries to classify the situation and gives an overview of the sales figures from the different beverage segments collected worldwide. In doing so, she also looks at trends that are emerging despite all the unpredictability.
Beer, wine, cider, hard seltzer, spirits, soft drinks and functional drinks
According to the BarthHaas Report Hops 2019/2020, world beer production in 2019 rose slightly for the first time in five years - by 0.5 per cent to 1,913 million hectolitres. For 2020, however, one thing is already certain: due to Covid-19, significant sales losses are to be expected. Plato Logic currently assumes that the world beer market will have to cope with a minus this year, which can fluctuate between 6.5 and 11.2 percent.
Mainly due to tourism and catering activities being suspended for a time and a sluggish recovery of the above-mentioned economic sectors, the market research institute expects global per capita consumption of beer to be only 24.2 litres in 2020 (2019: 26.2 litres/capita).
Craft Beer suffers from lockdown
With 77.1 million hectolitres, Craft Breweries contributed about four percent of the world beer market in 2019, according to Plato Logic.
While total beer sales in the USA fell by two per cent, Craft Beer achieved a plus of four per cent with approximately 30.9 million hectolitres. In 2019, Craft Beer held a 13.6 percent share of the US beer market by volume and a 25.2 percent share by value.
Such a positive development is unlikely to be reflected in the 2020 figures. Paul Gatza, Senior Vice President of Professional Brewing Division, Brewers Association, expects restaurant and bar closures due to the pandemic to result in declining sales of at least 20 percent. "Since 1968, 2020 will be the first year in the history of Craft Brewers in which sales figures go down," said Gatza.
Nevertheless, Gatza takes a positive view of the future of US craft brewers: "Craft brewers have always been open to new ideas and are both creative and nimble. These qualities help enormously in the current situation. For example, some Craft Breweries are already extremely active with alternative alcoholic trend drinks like Hard Seltzer".
"E-commerce has now been learned and we expect that consumers will want to continue to use this convenient distribution channel even after the restrictions imposed by Covid-19," says Gatza, summing up the changes in consumer habits in the craft beer segment.
Trend towards regionality in German beer
In the Corona crisis, the German Brewers' Association speaks of devastating consequences for its members and of sales losses of more than 22 percent, which the larger breweries had to cope with in the first four months of 2020, while the smaller breweries suffered a 35 percent drop in sales in the same period.
"The economic consequences of the Corona pandemic on the businesses of the German brewing industry are reaching an unprecedented level since the founding of the Federal Republic of Germany, also in terms of the slump in beer sales," reports Marc-Oliver Huhnholz, press spokesperson of the German Brewers' Association.
Stefan Stang, General Manager of the Association of Private Breweries in Bavaria, sees a positive aspect in the trend towards regional beer brands, which in his opinion has tended to strengthen and will continue to strengthen during the crisis in Germany.
German brewers show themselves creative with new ideas
This year, the German brewers showed their creativity and presented new ideas. The rollout of the first two varieties of HopfenFrucht, a new beverage category consisting of non-alcoholic Einbecker beer and direct juice from beckers bester, took place in mid-March 2020.
And Glaabsbräu launched the beer-cider hybrid Glaab's Stöffche, which combines light and apple wine, in early April.
Serving alcohol-free beers Sober Curious-Trend
Perhaps the crisis will also provide the impetus for some breweries to think even more in the direction of non-alcoholic and low-alcohol beers. According to Plato Logic, global consumption in this segment rose from 44.8 million hectolitres in 2018 to 47.5 million hectolitres in 2019.
A segment that also serves the trend towards healthy eating and the "Sober Curious" trend (sober but curious) originating in the USA. How "in" non-alcoholic can be, for example, was demonstrated only recently by the Scottish Craft Brewers of Brewdog - they opened a bar in the hip centre of London at the beginning of 2020, where only non-alcoholic Craft Beer is offered.
Alcoholic beverages will not reach pre-corona level until 2024?
27.4 billion 9-litre crates of alcoholic beverages were consumed worldwide last year, according to the IWSR. Consumption thus rose by 0.1 per cent, while sales revenues grew by 3.6 per cent. For 2020, the market research institute predicts a double-digit percentage decline and points out that figures from pre-Corona times are unlikely to return until 2024 at the earliest.
"The slumps that followed the financial crisis in 2008 were weaker than those that we now see approaching the industry," says Mark Meek, CEO IWSR Drinks Market Analysis.
Gin and whisky continue to grow
Spirits had to cope with reductions as early as 2019. In global terms, consumption within this segment was 2.5 percent lower than in the previous year. If Baijiu, a grain-based spirit, which is mainly produced in China, is excluded from the consumption figures, the 2019 result is positive according to the IWSR - with a sales increase of one percent.
As in 2018, gin was the strongest performer. Sales here grew by 6.1 percent. Whisky also continued to be particularly successful. Sales volumes of Irish whisky increased by 10.6 percent, Japanese whisky by 10.3 percent and US whisky by 5.8 percent.
Non-alcoholic spirits increase
The category of so-called "non-alcoholic spirits" also showed a significant increase. According to the IWSR, it increased by 25.5 percent, albeit from a still low level.
The "Sober Curious" trend from the USA, for example, prompted the Bonn-based Rheinland Distillers to offer the non-alcoholic gin alternative Siegfried Wonderleaf. The range ofnon-alcoholic spirits is growing steadily.
The spirits market in Germany
According to the BSI, the spirits market in Germany was down around 1.5 per cent on the previous year, with around 720 million 0.7-litre bottles in 2019. Clear spirits held the highest market share in terms of volume at approx. 36.6 percent. This was followed by liqueurs (around 35.5 percent) and brandies/cognac (around 8.8 percent).
"A serious consumption forecast for 2020 can only be made when it is foreseeable how long the corona protection measures in Germany will have consequences," says BSI President Thomas Ernst.
Communication in times of crisis is a top priority
Recent studies do not yet allow any predictions for the post-Corona era, but show a desire among consumers worldwide for products with lower alcohol content. For the alcohol industry it is therefore important to keep its products interesting with new ideas.
For example, Diageo created the "What's Your Whisky" application. It uses artificial intelligence and machine learning to determine taste preferences. Based on this, it then suggests single malt whiskies that match the respective preferences. With online wine tasting, the wine industry is creative in many places.
"In the coming months, brands need an inventive approach to social media and should place honesty and community at the centre of their communication," thinks Mark Meek. In general, the IWSR assumes that e-commerce in alcoholic beverages, which was already on the rise before Covid-19, will continue to grow at a faster rate.
Hard Seltzer sprints forward
Alcoholic RTD (Ready to drink) products are also in vogue. Global sales figures in this area grew by 19.6 percent last year. The IWSR forecasts annual growth rates of 7.2 percent up to 2024.
Hard Seltzer has a large share of this growth in the USA - with a sales increase of more than 200 percent in 2019.
"The tremendous rise of Hard Seltzer shows that consumers felt undersupplied by the traditional alcoholic beverage market and were looking for alternatives that were refreshinglyaromatic and low in calories and sugar," says Brandy Rand, COO Americas IWSR Drinks Market Analysis.
The market research institute forecasts US sales of 281 million 9-litre crates by 2023, tripling the 2019 figure. Hard Seltzer was listed in Germany for the first time in the summer of 2020. Initially, start-ups and private labels were involved in the German market, but Coca-Cola has since announced its intention to enter the German hard seltzer market.
Mixed outlook for the wine market
To a large extent this also applies to the wine market. At 244 million hl, global wine consumption in 2019 was up 0.1 percent on the previous year, according to the International Organisation of Vine and Wine (OIV).
33 million hl were consumed in the USA, which maintained its leading position. A drop of bitterness: last year US wine sales declined for the first time in 25 years.
According to the OIV, less wine was also enjoyed in China. The rapid growth that has characterised this market over the last 20 years seems to have come to a halt here. At an estimated 17.8 million hectolitres, consumption fell by 3.3 per cent and for the second year running.
Results of the new organic wine study "Millésime Bio 2020", which the IWSR prepared on behalf of SudVinBio, show that the organic wine segment is particularly promising for growth on a global scale. By 2023, production is expected to reach around two billion bottles of organic wine and a 3.5 percent share of the world market.
According to the IWSR, sparkling wines fared much better than still wines last year, with global volume growth of 1.4 per cent. The market research institute also predicts that the sparkling wine category will recover more quickly from the effects of the corona lockdown.
Germans under 30 find local wine trendy
For Germany, the German Wine Institute (DWI) predicts a decline in wine sales in 2019 of 0.9 percent to 16.7 million hectolitres. Per capita consumption thus amounted to 20.1 litres.
Sparkling wine consumption did not change in comparison to the previous year, remained at 3.3 litres/capita and totalled 2.8 million hectolitres.
Interesting: Domestic wines are increasingly in demand among the target group of under-30s. Last year a total of eight percent more young consumers chose wines from German regions than in 2018.
This is also a positive development: In the first quarter of this year, sales of German wines rose by four percent compared to the same quarter last year. With the onset of the corona-related restrictions in March, a significant increase in sales of around 9.5 per cent was recorded compared with March of the previous year. However, the volume of wine purchased in Germany across all countries of origin remained constant in the first quarter of 2020.
It is widely recognised that "Sober Curious" could also mean a future for the wine industry. For example, the Austrian winery Türk launched Juzzz, a wine alternative completely without alcohol. The basis for the drink is the juice of early harvested grapes, elderflower syrup and lemon balm. All ingredients are cultivated, harvested and processed in the region.
Western Europe leads the world in cider consumption
According to the European Cider and Fruit Wine Association (AICV), cider is still particularly popular in Western Europe. In 2018, the Western European market held 26.3 million hectolitres or 55.7 per cent of global cider consumption. The fastest growing cider markets are the Czech Republic, Romania, Slovenia, Bulgaria and Portugal.
"With new product ideas, producers are succeeding in keeping the classics of cider and fruit wine up to date and contemporary," says Klaus Heitlinger, Managing Director of the Association of the German Fruit Wine and Sparkling Fruit Wine Industry (VdFw), and basically speaks for an entire industry here.
Mark Meek, CEO of IWSR Drinks Market Analysis, also provides recommendations for the global alcohol industry: "Innovative strength, a focus on premium products and the use of new marketing channels such as e-commerce will make a decisive contribution to recovery and future growth.”
Global non-alcoholic beverage market continues to grow
The non-alcoholic beverage market is still more diverse. With a focus on health and well-being. This is partly due to the fact that consumers are looking at beverages with an increasingly critical eye. Too much sugar, colourings or preservatives are often exclusion criteria when shopping.
Ingredients should be as natural as possible and at best offer a high added value. According to the market intelligence agency Mintel, the focus will continue to be on the reasonable price of the product in addition to the taste experience.
In addition, the market research agency predicts in its report "Global Food and Beverage Trends 2030" that consumers will reward with loyalty above all those companies that make a difference for the good of humanity and the planet.
An opportunity for the beverage industry is functional beverages that meet a global trend towards a holistic approach to health and wellness.
There are already numerous examples of beverages that take health and wellness wishes into account. Marley Mellow Mood from the USA offers a relaxing tea with peach and raspberry flavour, which is said to calm the mind and soul with mood-enhancing plant extracts. The Good Night Drink from a company of the same name from Slovakia is a carbonated drink with herbal extracts of lemon balm and hops. The US company So Good so you brings different shots to the market, which come in 50-ml PET bottles and communicate their objective by name: "longevity", "immunity", "sleep", "detox", "energy" or even "digestion".
In general, the aspect of "digestion" is also becoming an increasingly important topic within the beverage industry. For example, water enriched with dietary fibres has meanwhile made a fairly successful entry into the global beverage market. According to Mintel's Global New Products Database (GNPD), from mid-2018 to mid-2019 the number of water introductions containing a high proportion of added fibre grew by over 200 percent worldwide - albeit from a still low base.
The Asian market is considered the innovation leader. Flavoured fibre water from Chun Yue, China, or Nature's Spring Fibre Water with wheat dextrin from Philippine Spring Water Resources are among the pioneers. But in Europe, too, according to Mintel, the share of beverages labelled "high in fibre" has more than doubled within three years by mid-2019.
Water remains growth driver
Against the background that the global market for bottled water is a particularly promising one, there could still be considerable potential in this direction. According to Euromonitor International trade figures, global per capita consumption of bottled water in 2019 was 37.9 litres, while carbonated soft drinks were 21.7 litres/capita and fruit juices 7.9 litres/capita.
The forecasts for 2020 are 40.2 litres/head for bottled water, 22.1 litres/head for soft drinks and 8 litres/head for fruit juices. These figures demonstrate that bottled water is the global leader among bottled soft drinks.
The Corona Plus
This is also the case in Germany. While per capita consumption of bottled water in 2019 was still 6.1 per cent down on the previous year, according to the German Non-Alcoholic Beverages Association, an increase in sales of 2.2 per cent over the same period last year is reported for the first four months of 2020.
Soft drinks showed a slight decline in 2019. With a per capita consumption of 121.4 litres, the minus was 1.7 per cent. Nevertheless, there were clear winners here. In the first four months of 2020, the industry is looking confidently to a 5.2 per cent increase in sales, partly due to corona.
The Association of the German Fruit Juice Industry (VdF) recently announced that fruit juice is the drink of the corona crisis and is pleased to report a 12.8 per cent increase in sales volume in the first four months of the year, also compared to the same period last year.
Nutri-Score sets the standard
There are many ideas to help consumers to live a healthy life even better, some of which have already been initiated. One of them is the so-called Nutri-Score, which was introduced in Germany in 2020. This is a five-step, colour-coded nutritional labelling system that allows consumers to quickly assess the nutritional composition of a food product when shopping.
Franken Brunnen is the first beverage manufacturer in Germany to announce that it will print the Nutri-Score traffic light on its products. The Nutri-Score is currently being implemented on a voluntary basis. Nestlé, together with other companies, is calling for a Europe-wide mandatory introduction of this labelling.
This underlines the forecasts by Mintel mentioned at the beginning. Jenny Zegler commented: "The companies that help to herald the new era of conscious consumption will emerge from this decade as winners".