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The global beverage industry is valued at USD 1813 billion for 2022 and the industry is growing at a CAGR of 4%. It's value estimations are USD 1885 billion in the year 2023. The beverage industry will further expand and be valued at USD 1961.24 billion in 2024.
High disposable income, rapid urbanization, and changing lifestyles are the major factors that contribute to the growth of the global beverage industry.
The beverage industry can further be classified into non-alcoholic and alcoholic categories. The non-alcoholic beverage market includes soft drinks(soda), fruit juices, syrup, caffeinated drinks, sports drinks, coffee, and tea. While the alcoholic beverage market has categories such as brewing, distilled spirits, and wines.
The global non-alcoholic beverage market size is valued at USD 1337 billion in 2022. The market is anticipated to grow at an estimated CAGR of 5.5%. It's value estimations are USD 1885 billion in 2023 and will be valued at USD 1488 billion in 2024.
The largest segment of the non-alcoholic beverage market is soft drinks. The soft drinks market is estimated to be 201,103 million dollars in 2020. In addition, researchers estimate that the average revenue per person in the Soft Drinks segment amounts to be US $90 in 2020.
Home for the majority of the consumers, the APAC region will dominate the world's non-alcoholic beverage market in the upcoming years. The high consumption in Indian and Chinese markets drives growth for the non-alcoholic beverage industry in the APAC region. The warm climate and hotter summer drive sales of non-alcoholic beverages in the APAC region.
Previously, the Carbonated soft drinks (CSD) segment accounted for driving revenue in this region. However, in recent times the consumption of CSD is expected to decline as young consumers prefer healthier alternatives such as 100% natural juice, Pulp fruit juice, etc. This behavior change opens up opportunities for native and DTC brands to penetrate the market.
The EU beverage industry is estimated to make 608 billion dollars in 2022. The market is forecasted to grow at a CAGR of 5%. The industry would further expand to a value of 633 billion at the end of 2023. Though alcoholic beverages are the most popular segment in this region, there is a surge in demand for Zero alcoholic beverages in recent times.
The interest for zero alcohol beverages is predominant in Western Europe compared to the eastern region. Germany and Spain are the hotspots for the zero alcohol beverage market. Together these two countries contribute to a 30% share of zero alcohol beverage consumption. While Poland and Netherlands would be the following emerging markets showing promising growth rates for the above category.
Overall, the non-alcoholic beverage market in the European region is driven by shifts in consumer preferences towards healthier alternatives. As a result, this industry is continuously innovating new products to satisfy the needs of its native consumers.
US non-alcoholic beverage market size is valued at 225 billion dollars in 2022. The market is growing at a CAGR of 3.8%. The industry will be valued at 234 billion dollars in 2023 and it is estimated to be 236 billion dollars in 2024. Carbonated soft drinks (CSD), a popular segment in this market, have been shrinking in size and revenue in recent years. While the market size for functional beverages is expected to grow and expand in the upcoming years. This shrink in the market share soft drink category is compensated by the rise in the market share for the subcategories such as fresh juices, enhanced water, RTD coffee, probiotic drinks, etc. In addition, the increase in obesity rates and the impact of a sedentary lifestyle is making young Americans migrate from CSDs to healthier alternatives.
The global alcoholic beverage market share was valued at USD 1559 billion in 2022. The market is expected to grow at a CAGR of 2%.
APAC alcoholic beverage market size is of value USD 11.57 billion dollars in the year 2022 and the market is estimated to expand at a CAGR of 4.5%. The value of the alcoholic beverage market is estimated to be USD 12.09 billion dollars in the year 2023 and is expected to reach USD 12.63 billion dollars in the year 2024.
The increase in the trend of drinking in a social gathering is one of the main factors that is driving growth for APAC’s alcoholic beverage market. While beer and spirits are mostly consumed categories, consumption of wine and premium alcoholic beverages is becoming popular in recent times. The increase in the per capita income and the influence of western culture is bringing change in consumption patterns in this region.
Europe is the largest alcoholic beverage market in the world. The market is estimated to be worth 363 billion euros at the beginning of 2022 and is expected to grow at a CAGR of 3% in the upcoming years.
Our estimates say consumers in Eastern Europe consume more alcohol when compared to those who are in the western region of Europe. While Germany, France, and Spain hold a major market share of the market in this region. Lithuania has the highest per capita consumption of alcohol. A survey by WHO states that on average a Lithuanian consumes 15.9 liters of pure alcohol in a year. The upcoming trend in the EU alcoholic beverage market is all about the increase in usage of natural fruit flavors in ciders and RTDs. Many distilleries are coming up with new varieties of craft beers and premium organic wines.
The size of the US beverage market is estimated to be USD 237 million dollars in the year 2022.
The industry is growing at a CAGR of 3.7%. The US alcoholic industry comprises 80% malt-based beverages and 20% of Spirit-based beverages. Among the malt-based beverages, beer is the most consumed product while the interest in crafted beers is trending among the Millennials (the major sect of consumers in this market). With flavors driving consumer interest the local brewers and DTC brands are capitalizing this opportunity to penetrate the market.
Global spirits consumption will see a moderate rise of 36.5m cases by 2022, equivalent to a CAGR of 0.2%. While low-priced spirits will see their share of the global spirits market fall to just over 50% over the forecast period, premium-and-above spirits will see their share jump from 4.7% to 7.4% during this time, says the IWSR Forecast Report.
In a positive development for the category, standard and above vodka consumption is forecasted to grow by 7.4m cases, at a steady CAGR of 1.6%.
US whiskey is forecasted to be one of the fastest-growing spirits categories over the forecast period, growing with a CAGR of 4.8%.
Mixed drinks, beer, and cider are all projected to make incremental gains throughout the forecast period, with respective CAGRs of 1.3%, 0.02%, and 1.3% between 2017 and 2022.
While the champagne is also expected to perform solidly with a CAGR of 1.5%, recording volume growth across all major regions of the world.
The global beverage market is driven by consumer demand for premium/super-premium products. This is mainly due to the increase in the young-adult demographic, coupled with the increase in the spending power of millennials.
It is an exciting time to be in the beverage industry. Products such as Kombucha, cold brew coffee, and hard seltzer which are largely considered as non-existent, are now filling the front and center of grocery display cases. On the other hand, the news products such as CBD infused beverages, vegan beverages are in demand as well. Changes in lifestyle and consumption habits of the new-age consumers are two major reasons driving this change.
i) Consumption with an intent
New age consumers, mainly millennials are health-focused. They are expecting functional benefits from their beverages that are consumed on a regular basis. This behavior has led to the rise of a new category of beverages called “miracle drinks”. CBD infused sparkling water, plant-based milk beverages are popular examples under this category.
ii) Personalization
From the newly funded startups to well funded corporate conglomerates almost all the players in the beverage market are striving hard to meet the never-ending desires of the new-age consumers. For instance, last year PepsiCo unveiled a new hydration platform, which is completely customizable to the needs of the consumer. It provides you with a variety of flavors, carbonation, and temperature options to choose from.
iii)Sustainability
A survey conducted by Global Web Index says that 'Half of the digital consumers say environmental concerns impact their purchasing decisions'. Beverage companies are responding to this by moving towards more eco-friendly options. They are slowly encouraging the use of bio-friendly packaging, recyclable plastic containers.
iii) Growth of Private labeled beverages
As most of the popular leading retailers are coming up with their own private-label brands, private-labeled products are fastly occupying the central rows of the major retail stores. For instance, Walmart, Kroger, Albertsons, Trader Joe’s, Whole Foods Market, Target Corp., and Costco all have launched private-label drinks of various beverages categories. This is bringing loads of traction and growth in the private label beverage market.
iv) CBD/Cannabidiol Infused Seltzers
Many CBD-infused seltzers hit the retail outlet early this year, with sales more than doubling over the previous year. With the improving regulatory climate, Canadian companies are looking to have a ball in the US market through M&As to market their CBD products.
There is category innovation, sales growth and they are in line with long-term consumer behavior. We've seen this movie before. M&A-hem ensues.
Some of the top non-alcoholic beverage brands: Coca Cola, Pepsi, Tropicana, Gatorade, Redbull, Lipton, Nescafe
Some of the top alcoholic beverage brands: Corona, Budweiser, Heineken, Smirnoff, Bacardi, Johnnie Walker
List of alcoholic DTC beverage brands: Drizly, HomeChef, Foxtrotco, Bodega Bay, Winc, Tale Beer
List of DTC non-alcoholic beverage brands: JUS by Julie, Health-ade, Moon juice, Califia Farms
Beverage brands have realized that volume is no more the path to profitability in today’s marketplace. They are reshaping their portfolio to cater to the broad needs of their new consumers. They are moving towards premium selections from their traditional core categories. This diversification in the market is happening all over the market through acquisitions.
For instance, AB InBev, one of the largest beverage manufacturers in the EU region acquired Cutwater Spirits6 to expand its market presence in the craft spirit and ready-to-drink (RTD) cocktail space. Another interesting trend is there is a surging demand for mild alcoholic beverages like craft beers, zero alcoholic beverages, and non-alcoholic spirits. These new segments are opening up limitless opportunities for a brand of any size to build a loyal customer base for themselves.
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