beverages market in the APAC region is highly diversified in terms of
consumption patterns and products mainly due to differences in tastes and
preferences, and in social and cultural behaviors across nations. The market is
growing at a healthy pace owing to increase in the demand for premium alcohol.
For instance, baijiu,
which is the most commonly
consumed alcohol in China, is witnessing demand from
across the globe. Moreover, the Chinese government is making ample efforts to
improve baijiu’s prominence in the international market as the product is
important for tourism in China. Due to these factors, the APAC alcoholic
beverages market size was valued at $562m in 2018, and is set to grow at a CAGR
of 2.9% during the forecast period 2019-2025.
Expanding Beyond China
According to the
China.Org, the potent beverage, baijiu is one of the most commonly consumed
alcoholic beverage in the world. Currently, 99% of the baijiu produced are consumed
in China. In recent times, the liquor is being marketed beyond the boundaries
of China and attracting distributors and merchants from Europe and the U.S. The increasing exports of
baijiu are set to aid growth of the APAC alcoholic beverages market.
Additionally, Chinese distillers now want to promote baijiu as the 'new
tequila’ for Europeans and Americans, and are selling the concoctions at bars
in London, New York and Sydney. Manufacturers are hiring mixologists to
experiment with tropical fruits and ginseng in order to reduce the drink’s
stomach-burning potency to make it more appealing to consumers. Consequently,
China led the APAC alcoholic beverage market with a share of 45% in 2018, and
is poised to generate more revenue through export of the product.
Consumption of Alcohol in India
In India, increase in
the purchasing power of the middle-class population and growth of the urban
population are the main reasons leading to increased consumption of alcohol. India
is the world’s fastest-growing alcohol market. According to the World Health
Organization (WHO), in India, the per capita consumption of alcohol accounted
for 5.7 liters in 2016. After
the industry faced stagnation for a few years, therefore, Indians started
to drink and spend more on the premium alcohol due to this the demand for
liquor is growing continuously in the country. Furthermore, increasing
incidences of eating-out and clubbing among youngsters is driving growth of the
APAC alcoholic beverage market. Additionally, increasing work pressure and the
resultant imbalanced lifestyles are leading to increased demand for alcoholic
beverages in this market.
Surging the Global Alcohol Consumption
The fastest growing
application segment in the alcohol beverage market are spirits, which are
estimated to grow at a CAGR of 2.7% through to 2025. According to WHO, 2018 saw
total recorded alcohol consumption in the form of spirit touch 44.8% globally,
and spirit is also the most commonly consumed beverage in the South-East Asia
as a spirit is leading in terms of global consumption in the alcohol market.
The demand for the spirit in APAC is expected to witness an upsurge due to the
burgeoning bar culture. Additionally, with the change in the lifestyle the
drinkers’ preference is inclining towards low alcohol spirit as compared to any
other spirit. Change in consumers’ preferences in the region
is driving growth of the APAC alcohol beverages market.
Alcoholic Beverages Market: Growth Drivers and Disruptive Trends
· The Emergence of Online Channels
Increasing utilization of the internet through
smartphones to buy groceries are also helping people skip the trips to liquor
shops. Online sales of liquor, beer, and wine have increased drastically in
recent times. By means of the internet, wine has become the most popular kind
of adult beverage. For instance, Drizly Inc., an alcohol e-commerce platform in
the U.S. and Canada, and Wine.com, a Boston-based online retail company,
experienced the maximum online sales in 2018. Drizly, despite being a small player
in the online alcohol market, its expansion was the major factor that
influenced online websites to be launched in the market. E-commerce is starting
to see robust due to increasing demand for alcohol online.
· Premiumization driving the Alcohol Market
The primary driving factor for this market is
rapidly growing demand for premium alcohol in APAC. The immense efforts
put by the manufacturers for extension of purchase channels and strengthening
of distribution channels such as convenience stores and online shopping is
contributing significantly to the growth of the alcohol market in the region.
The millennial consumers are basically influencing the growth of the premium
alcoholic beverages market. In addition to this, economic growth, product
innovation by companies, low calories drinks, and changing consumer preferences
is propelling demand for premium products.
· Japanese Gin Gaining Traction
In recent years, the Japanese gin has gained popularity in the APAC alcohol market. The innovation of craft gin Ki no Bi by Kyoto Distillery is an emerging trend in the region as it is made up of botanical ingredients hinoki wood chips (Japanese cypress), yellow yuzu, Japanese peppercorn, bamboo, and gyokuro tea. Owing to this, other Japanese brands have stepped in to create similar gin alcohol. For instance, in 2016, Suntory acquired Sipsmith, a London-based gin distillery company. After the acquisition, the new entity in 2017 introduced its own Roku gin range made from botanical ingredients.
Key Players in the APAC Alcohol Beverages Market
Key players in the
APAC alcoholic beverages market are Suntory Beverage & Food Limited,
Carlsberg A/S, Diageo plc, San Miguel Corporation, Anheuser-Busch InBev SA/NV,
Heineken NV, and SABMiller Plc. These companies have been continuously focusing
on R&D investments, acquisitions and
partnership strategies to strengthen their product portfolio. For instance, in
2018, Heineken NV signed an agreement with China Resources Beer Holdings Co.
Ltd. (CR Beer) and China Resources Enterprise, Ltd. (CRE), wherein Heineken
will become a minority partner in CRE Ltd., which controls CR Beer, the
undisputed market leader in China’s alcohol beverage market. The major
objective behind the partnership is expansion of the Heineken alcohol brand in
the market alongside strengthening CR Beers’ offering as a premium brand in the
rapidly growing beer segment in China. This agreement will also help accelerate
the international growth of CR Beers by leveraging Heineken’s marketing
capabilities and global reach. Therefore, such acquisition and partnerships are
influencing other companies to invest in the APAC alcohol beverages
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