July 19, 2020 by Vijaya Sripada

How big is the beverage industry?

Industry overview and market share of the beverage industry
The global beverage market size is valued at US$1550 billion for the year 2018 and the industry is growing at a CAGR of 4%. It’s value estimations are US$1676.48 billion in the year 2020 and the US $ 1885 billion in the year 2023. The beverage industry will further grow and would have been valued US$ 1961.24 billion in the year 2024.

Market size of global beverage industry

High disposable income, rapid urbanization, and changing lifestyles are the major factors that contribute to the growth of the global beverage industry.

Classifications of the beverage industry

The beverage industry can further be classified into non-alcoholic and alcoholic categories. The non-alcoholic beverage market includes products such as soft drinks(soda), fruit juices, syrup, caffeinated drinks, sports drinks, coffee, and tea. While the alcoholic beverage market includes categories such as brewing, distilled spirits, and wines.

 The market size of the Non-alcoholic beverage industry

The global non-alcoholic beverage market size was valued at USD 970 billion at the end of 2016. The market is anticipated to grow at an estimated CAGR of 5.5%. It’s value estimations are US$1201 billion in the year 2020 and the US $ 1885 billion in the year 2023. The industry will be valued at US$ 1488 billion in the year 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 the year 2020. Researchers estimate that the average revenue per person in the Soft Drinks segment amounts to be US$90 in 2020.

Market size of non alcoholic beverage industry

The market size of the non-alcoholic beverage industry in the APAC region

Being the home for the majority of the consumers APAC region is going to dominate the world non-alcoholic beverage market in the upcoming years. The high consumption in Indian and Chinese markets drive 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, Carbonated soft drinks (CSD) segmented was accounted for driving revenue in this region. However, in recent times the consumption of CSD is expected to decline as young consumers are preferring healthier alternatives such as 100% natural juice, Pulp fruit juice, etc. This change in behavior is opening up opportunities for native and D2C brands to penetrate the market.

The market size of Non-alcoholic drinks in the EU Region

At the end of 2018, the EU beverage market size was estimated of value 500 billion dollars. The market is forecasted to grow at a CAGR of  5%. Its value is estimated to be 551.25 billion dollars in the year 2020 and the industry would further expand to a value of  633 billion at the end of the year 2023. Though alcoholic beverages are the most popular segment in this region, in recent times there is a surge in demand for Zero alcoholic beverages.

The interest for zero alcohol beverages is predominant in Western Europe when compared to the eastern region. Germany and  Spain are the hotspots for the zero alcohol beverage market. Together these two countries contribute to 30%  share of zero alcohol beverage consumption. While Poland and Netherlands would be the next 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. This industry is continuously innovating new products to satisfy the needs of its native consumers.

The market size of non-alcoholic beverages in the US region

US non-alcoholic beverage market size is valued at 200 billion dollars in the year 2018. The market is growing at a CAGR of 3.8%. The industry is valued at 217 billion dollars in the year 2021 and it is estimated to be of value 236 billion dollars in the year 2024. Carbonated soft drinks (CSD) which used to be a popular segment in this market is shrinking in size and revenue in recent years. While the market size for functional drinks 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 are fresh juices, enhanced water, RTD coffee, and probiotic drinks, etc. The rise in obesity rates and an increase in awareness on the impacts of a sedentary lifestyle is making young Americans migrate from CSDs ( carbonated soft drinks) to healthier alternatives.

 

Industry overview and market size of the alcoholic beverage market

The market share of the global alcoholic beverage market was valued at $1,440 billion in 2018  The market is expected to grow at a CAGR of 2%.

Alcoholic beverage market size

Alcoholic beverage market size and statistics in the APAC region

APAC alcoholic beverage market size is of value 9.7 billion dollars in the year 2018 and the market is estimated to expand at a CAGR of 4.5%. The value of the alcoholic beverage market is estimated to be 10.42 billion dollars in the year 2020 and is expected to reach 11 billion dollars in the year 2022.

The increase in the trend of drinking in a social gathering is one of the main factors that is driving growth in the 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 pattern in this region. 

The market size of Non-alcoholic drinks in the EU Region

Europe is the largest alcoholic beverage market in the world. The market is estimated to be worth 332 billion euros at the beginning of 2019 and 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. 

US alcoholic beverage market size and statistics

The size of the US beverage market is estimated to be 220 Million dollars in the year 2020.
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 D2C brands are capitalizing this opportunity to penetrate the market.

Consumption and growth rate of different alcoholic beverages

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.

Upcoming trends of the beverage industry

Growth factors of the global beverage market
The global beverage market is driven by the 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.

Upcoming trends of the global beverage industry

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 GlobalWebIndex 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-labeled 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.
Popular brands of the beverage industry
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

Popular D2C Beverage Brands

List of alcoholic D2C beverage brands: Drizly, HomeChef, Foxtrotco, Bodega Bay, Winc, Tale Beer

List of D2C non-alcoholic beverage brands: JUS by Julie, Health-ade, Moon juice, Califia Farms

Conclusion 

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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Vijaya Sripada

Slips poor jokes & gets away with a poker face. Carries a no BS attitude at getting things done. First to arrive at the office, Ashwin’s energy does not ebb through the day. Ashwin is one of the co-founders and he sets the tone for marketing, sales, design & culture.