Economic and social changes are happening rapidly across the world, including in India. Consumer preferences are evolving, and spending habits are no longer the same as they were before. The impact of these changes is also becoming evident in the alcohol industry. According to a research report, alcohol consumption could decline globally over the next decade, while, in contrast, India is expected to witness significant growth.
Let us understand how this contrasting trend is creating both new opportunities and challenges for the industry, companies, and investors.
What’s Happening?
The first 10-year forecast by IWSR, a global organisation that researches the alcohol industry and covers 160 markets worldwide, suggests that global alcohol consumption could remain under pressure in the coming years. According to the report, total alcohol consumption is expected to be 1% lower by 2035 compared to 2025 levels. This projection comes at a time when the number of legal-age alcohol consumers worldwide is expected to increase by 9%.
According to the report, per capita pure alcohol consumption will also decline. This reduction could be equivalent to about two bottles of spirits or one case of wine per person. In other words, despite an increase in the number of consumers, people are expected to consume less alcohol than before.
Several factors have been cited for this shift. Rising living costs are prompting people to limit their discretionary spending. At the same time, growing awareness around health and wellness is encouraging consumers to pay greater attention to fitness, calorie intake, and healthier lifestyles. The increasing use of weight-loss drugs is also influencing alcohol consumption habits. According to IWSR President and Managing Director Marten Lodewijks, changing consumer preferences have now become the industry’s biggest challenge, and companies can no longer rely solely on their past successes.
Decline in Global Markets and New Trends
According to the report, consumption of traditional alcoholic beverages such as beer, wine, and spirits is likely to decline by 2035. In contrast, newer products such as ready-to-drink beverages and canned cocktails are expected to increase their market share. This is because consumers are now prioritising quality and convenience over consuming larger quantities.
This trend is becoming more evident in the world’s largest markets. According to IWSR estimates, alcohol consumption in China and the United States could decline by more than 18% by 2035. At the same time, mature markets such as Germany, Japan, and the United Kingdom are also expected to witness a significant decline.
The impact is already visible among some of the industry’s biggest companies. Since 2023, major players such as Diageo and AB InBev have experienced pressure on their sales. Weak demand has also affected their valuations, increasing concerns among investors.
Growth Prospects in India
While many of the world’s largest markets are slowing down, India is emerging as an important growth engine for the global alcohol industry. According to IWSR, alcohol consumption in India is expected to increase by 38% over the next decade.
The report states that by 2032, India could overtake the United States to become the world’s second-largest alcohol market after China. Several structural factors are driving this growth, including rising incomes, rapid urbanisation, and a large young adult population.
In addition to India, growth is also expected in other emerging markets. Alcohol consumption could increase by 13% in Mexico, 15% in Vietnam, and 26% in Colombia. However, among major economies, India’s projected 38% growth is considered the most notable.
What Does This Mean for Investors?
This trend offers important insights for investors. Despite slower growth in the industry at a global level, emerging markets such as India could become major drivers of revenue growth for companies.
Companies will now need to focus not only on increasing production but also on innovation. It will be particularly important to understand the evolving needs of health-conscious and value-conscious consumers. Products that successfully balance health, convenience, and a premium experience are likely to perform better in the future.
Additionally, companies that can capitalise on local demand and align their strategies with emerging consumer trends may be better positioned for growth. The industry will need to place greater emphasis on understanding consumer preferences and developing products accordingly, rather than relying solely on large-scale sales.
What’s Next?
The global alcohol industry could undergo significant changes over the next decade.
In such a scenario, success will depend not only on increasing sales but also on understanding the changing preferences of younger consumers, growing health awareness, and the demand for premium experiences. Despite slowing consumption in many parts of the world, fast-growing markets such as India could play a significant role in shaping the future direction of the global alcohol industry.
Disclaimer: This article is for educational and informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. The companies mentioned are cited as examples within the context of market developments. Investors are advised to conduct their own due diligence and consult their financial advisor before making any investment decisions.
Investments in the securities market are subject to market risks. Read all related documents carefully before investing.
