The year so far has been a flurry of volatility. The ongoing uncertainty around US tariffs, brought on by President Donald Trump, have left many in the global brewing sector on tenterhooks, unsure of how to proceed.<\/p>\n
Combined with a world that\u2019s witnessed escalating global conflicts, an intensifying climate crisis and ever-shifting consumer needs, there\u2019s plenty brewers are having to grapple with as they assess future business plans.<\/p>\n
It was in this somewhat chaotic and uneasy context that brewing business representatives and executives met in Prague, Czechia, last month at the Beer Strategies Conference hosted by Just Drinks\u2019 sister events arm Arena International.<\/p>\n
The two-day event saw figures from brewing heavyweights including Molson Coors and Damm come together to discuss the challenges facing the industry and how to tackle them, as well as continuing to look ahead to the categories and trends driving beer’s future growth.<\/p>\n
Man-made crises certainly offer their own set of hurdles to tackle, but one factor highlighted in particular was that the brewing sector shouldn\u2019t fail to ignore how consumer behaviour continues to shift in the background and how to find ways to meet those evolving needs. <\/p>\n
\u201cEven if the policies in the permacrisis change because of culture wars, economic trade-offs, regulation on the environment and on net zero may become lighter, your consumers, of course, are not going to change their views and their expectation that you will respond,\u201d explained Christopher Granville, managing director at macroeconomic forecasting group TS Lombard, which is owned by Just Drinks’ parent company GlobalData.<\/p>\n
Localism, sustainability and wellbeing are top of mind for consumers, he said, with \u201cglobal fracturing\u201d also contributing to those values, as China continues to edge its way forward as a global superpower.<\/p>\n
\u201cIt’s almost up there in obviousness with climate and public health, but it needs saying there’s a new kid on the block in the world\u2026 There will be a brutal, inexorable, proliferating decoupling between the worlds of the US and China.\u201d<\/p>\n
Granville did, however, try to find a bright spot in what seems to be a particularly gloomy time: \u201cPolicy-made crises come and go, but you have to be ready for them all the time \u2013 \u00a0the permacrisis, deep trends, they create opportunities.\u201d<\/p>\n
Christopher Granville speaking at the International Beer Strategies Conference in Prague. Credit: Just Drinks <\/p>\n
Premiumisation continues to remain a prominent topic for the beer industry, and there was resounding agreement in Prague that the term today no longer simply means an expensive or \u2018upmarket\u2019 product, but a drink which a consumer sees value in and would be willing to trade up for. <\/p>\n
\u201cPremium really means something that’s worth paying more for, something that I would value and will be prepared to pay more,\u201d said Helen Green, strategy, innovation and sustainability director for the EMEA region at Molson Coors.<\/p>\n
One example Green gave was its Alpacalyse session IPA launched with Salt Brewery in the UK earlier this year. The product looked to \u201c[play] into their heritage that they\u2019ve built their proposition around textile manufacturing and the fact that actually alpaca wool was the basis of that, and that was where the brand idea was born\u201d.<\/p>\n
She added: \u201cIt is more that modern take of storytelling. There are versions of the heritage, history base, but then there\u2019s also that more irreverent, cheeky.\u201d<\/p>\n
The Alpacalyse Session IPA, created by Molson Coors in partnership with Salt Brewery. Credit: Molson Coors <\/p>\n
For Damm, storytelling around the business\u2019 origins, Barcelona, is key to helping it stand out against other Spanish world lagers which \u201care booming\u201d in the UK, the group\u2019s international business director Juan Gonzalez Gil explained.<\/p>\n
\u201cWe play a lot on origin, we play a lot on authenticity. If you go to Barcelona, more than 60% of the beers that you will drink there are just one beer \u2013 Estrella Damm. You live and breathe the brand whenever you go to Barcelona. I think that’s quite unique, and that talks a lot to being authentic and being recognised.\u201d<\/p>\n
Provenance is also becoming a growing trend seen in flavours as well as overall branding, according to Mike Bagshaw, owner of International Taste Solutions, and it\u2019s likely to become more important in driving consumer choices down the line.<\/p>\n
\u201cWe’ve seen things like Sicilian lemons in particular, different extracts of different places. I think the premium side for me over time is going to \u2013 I would say this because, I have a flavour house \u2013 but I think flavour is going to become more and more important in terms of evoking emotion and getting consumers to actually say: \u2018Do you know what? I believe in that brand\u2019.\u201d<\/p>\n
When it comes to no-and-low alcohol, the \u201clow\u201d part of the category in beer is losing traction globally, according to GlobalData research.<\/p>\n
\u201cLow-alcohol has really struggled,\u201d Kevin Baker, the company\u2019s global head of research for beer and cider, explained, referring to volumes of beers in the 0.5% to 3.5% abv segment.<\/p>\n
\u201cIt\u2019s not no-alcohol, but by the same token it\u2019s not giving you a lot of benefits\u2026It doesn\u2019t really do what consumers are looking for,\u201d Baker said.<\/p>\n
GlobalData research estimates low-alcohol volumes declined 0.4% in 2019-2024 to sit around 34 million hectolitres in the final year of that period. Those beverage types are expected to grow just 0.1% from 2025 to 2030.<\/p>\n
Non-alcoholic beers are forecast to have grown 5.3% in volumes in the 2019-2024 period, outpacing all other beer categories.<\/p>\n
Another reason driving the declines is the widescale move of Radler-style drinks from a low-alcohol to 0.0% proposition, Baker said, as well as the fact that lower alcohol beers are \u201cprimarily\u201d targeted at beer drinkers.<\/p>\n
It\u2019s not no-alcohol, but by the same token it\u2019s not giving you a lot of benefits\u2026It doesn\u2019t really do what consumers are looking for.
Kevin Baker, head of global beer and cider research at GlobalData<\/p>\n
\u201cSome markets are more open to it,\u201d Baker told Just Drinks. \u201cChina sits on the boundary of what we call low alcohol. It\u2019s about 3.5%. Some of them might be just under what we would class as low-alcohol, but they don\u2019t think of them as low-alcohol. Generally, that\u2019s what beer is.\u201d<\/p>\n
Given the growing consumer interest in moderation, it may come as a surprise that GlobalData\u2019s research also predicts growth in higher alcoholic beer, led by speciality brews.<\/p>\n
These could include Belgian speciality brands like Duvel and Leffe, or brands entering brand extensions in this segment, said Baker.<\/p>\n
GlobalData has forecast strong beers to grow 3.6% in volume in the next five years. Its predicted volumes for strong beers in 2024 sat at 122mhl.<\/p>\n
What premium means nowadays is also changing, depending on the consumer group, and one group in particular which has been causing quite a stir across the alcoholic drinks sector is Gen Z – legal drinking age adults born between 1997 and 2012.<\/p>\n
According to Green at Molson Coors, while this generation is typically understood to be a generation that is not only \u201cthe first truly digital native cohort\u201d, they also experienced \u201csignificant life stages, milestone moments\u201d during the Covid pandemic, which has affected their view on the world and their approach to socialisation.<\/p>\n
While it might seem unlikely right now, Green also noted that these consumers are expected to be the largest and wealthiest generation. \u201cThey do have money, but actually they feel quite pessimistic about it.\u201d<\/p>\n
Green\u2019s comments chime with findings from Bourcard Nesin at Rabobank released last month, which showed that while Gen Z-led households are spending less on alcohol than other age groups, they also have a smaller income and make up a smaller percentage of the legal drinking age population.<\/p>\n
As they age and start to earn more, their \u201cincrease in income will mechanically rachet up their spending on alcohol\u201d, Nesin said in his note at the time.<\/p>\n
\u201cHow they spend their money is something that we really need to understand to be able to unlock it, because value is really, really important to this group,\u201d added Green.<\/p>\n
So, what is it that these consumers value most in beer? Choice and authenticity, with the latter being \u201cabsolutely crucial\u201d.<\/p>\n
How they spend their money is something that we really need to understand to be able to unlock it, because value is really, really important to this group.
Helen Green, strategy, innovation and sustainability director EMEA at Molson Coors<\/p>\n
\u201cObviously, non-alc is going to play a really important part in these category choices,\u201d said Green, noting that the \u201cbeyond beer\u201d segment was also worth exploring, \u201cbecause it really is about understanding these consumers lives, their occasions, their needs on their occasions, and what matches with that, and that will require a broader set of solutions.\u201d<\/p>\n
How can a beer brand be authentic? It needs to be transparent, and this can come down to a company being able to show transparency around sustainability and \u201creally demonstrated progress against that agenda\u201d.<\/p>\n
It can also come down to which celebrity a company chooses to represent their brand, but it needs to be someone. During her research, Green found that Gen Z consumers in both the UK and US were more trustworthy of influencer\u2019s product recommendations, but they\u2019re still skeptical too.<\/p>\n
\u201cThat\u2019s why often there\u2019s this relationship with influencers. People become known, but might be less known, and they\u2019ll trust their point of view as a more \u2018normal\u2019 person,\u201d she told Just Drinks. \u201cCelebrities can be a tricky one. It\u2019s about picking the right celebrity for the right brands, and making sure that those things work together, otherwise you can really lose [consumers] quite quickly.\u201d<\/p>\n
As well as being able to meet Gen Z\u2019s values, later in the conference Green also spoke about the need to understand how consumer occasions are changing in beer. While on-premise venues are still seen as important for building brands, the industry needs to start thinking about finding ways to target drinking occasions that happen outside of traditional on-trade locations, as growing numbers of consumers, including Gen Z, take their drinking occasions outside of pubs and bars.<\/p>\n
\u201cIt’s about really understanding those socialising moments that are really important, but they could actually happen anywhere,\u201d said Green. \u201cBecause it could be shared interests, it could be board games, it could be sport-related, it could be in a pub, it could be lots of different places.\u201d<\/p>\n
Helen Green, strategy, innovation and sustainability director at Molson Coors EMEA on stage at the International Beer Strategies Conference. Credit: Just Drinks <\/p>\n
Global circumstances remain shaky, and lack of certainty continues to circle the beer industry, as it does for most alcoholic beverages industries at the moment.<\/p>\n
As Baker highlighted on the second day of the conference, \u201cwe are living in very uncertain times\u201d and \u201cone of the things we can be certain of is uncertainty\u201d.<\/p>\n
In spite of this, the future still appears relatively stable for beer, with it still being the leading alcoholic drinks category in volume and value terms, according to GlobalData;s research.<\/p>\n
In its predicted figures for 2024, beer made up 42% of the global share of alcoholic beverages in value terms in 2024, reaching $765bn.<\/p>\n
While on a global scale, flavoured alcoholic beverages were estimated to have made up just 3% of total global alcoholic beverages market share last year, beer is losing out to other categories like ready-to-drink products (RTDs), which GlobalData calls \u201cflavoured alcoholic beverages\u201d.<\/p>\n
In Europe, growth of this segment still remains rather small, but it\u2019s scaling up quickly in developing regions, including some markets in Asia and Africa, which have seen \u201cvery fast\u201d growth, said Baker, \u201cdriven by a growing young population, increases in urbanisation, and a growing middle class\u201d. <\/p>\n
Where does this leave the category long-term? Total 2024 volumes have been forecast to potentially hit pre-Covid levels. Baker cautioned, however, that it was \u201cstill a bit early to tell\u2026 but it has taken a while to recover\u201d.<\/p>\n
Volumes between now and 2030 are also expected to stay relatively flat, reaching 2 billion hectolitres by 2030, an increase of 6% on forecasted 2025 volumes.<\/p>\n
This is driven by an unsteady geopolitical context and a changing consumer relationship with alcohol, which is anticipated \u201cto shrink beer in both the short to medium term\u201d, said Baker.<\/p>\n
What remains to be proven, however, is whether certain essential aspects to beer sales strategy (and realistically the entire alcohol category) like premiumisation will still hold true with consumers down the line.<\/p>\n
Reflecting on the ongoing permacrisis engulfing the world right now, early on in the event, Baker noted that economic crises have tended to benefit premium beers in the past, with consumers looking to treat themselves with \u201csomething that’s really, really worthwhile\u201d.<\/p>\n
Is the situation now any different? He concludes: \u201cNow it will be interesting to see whether that is going to happen in the current situation, or whether indeed we’re going to see a change. Obviously, these are unprecedented times. This is not the old boom-and-bust cycle. It’s completely different. It’s a new paradigm, and I’ll be interested to see whether premium beer can weather that in the same way.\u201d<\/p>\n