Emerging markets are becoming more and more critical for the beverage industry’s growth. That’s the takeaway from the latest analysis by IWSR, the go-to source for beverage industry insights.
The Markets Leading the Beverage Industry
The numbers tell the story: in the next five years, mature markets are expected to see minimal growth, or even contraction. On the flip side, emerging markets are set to take off. Geographically, this means shifting focus to countries like India, China, Brazil, Mexico, South Africa, Vietnam, and Nigeria—all showing strong growth in both volume and value for the beverage sector.
Traditional markets are painting a different picture: Europe, Japan, and Canada are facing broad declines, with the U.S. standing as the only exception. However, this stability in the U.S. is more due to the market’s sheer size than any actual growth surge.
Where the Big Money Will Be Made
IWSR’s projections run through 2028, starting with a rough 2023 that saw just 1% growth—not exactly impressive by standards. Over the next five years (including 2024), the biggest revenue gains will come from India, China, and the U.S., together driving a $30 billion increase in value. Close behind are Brazil, Mexico, South Africa, Vietnam, and Nigeria, contributing an additional $14.4 billion by 2028.
Fastest-Growing Markets in the Beverage Industry
It’s clear that emerging markets are pulling more weight. Annual growth estimates up to 2028 back this up: India is projected to see over 4% growth, while Mexico and South Africa are expected to hit 3%, and Brazil around 2%. China is slated for 1% growth, excluding domestic spirits, which still translates to a potential $5 billion in sales given the size of the local market.
By contrast, the U.S. is forecasted to grow by just 0.8%. Growth is expected to be below 1% in Italy, Spain, Australia, and the Netherlands. There’s barely any growth in France and Poland, while the UK, Japan, Germany, and Canada are facing outright declines.
Shifting Dynamics in the Beverage Industry
This trend isn’t new, but it’s accelerating. The importance of emerging markets (especially in the spirits segment) has been rising at the expense of established markets for some time now. As Emily Neill, COO of IWSR, puts it: “The trend is ongoing and gaining momentum.”
What’s Driving the Shift?
Several factors are changing the game. The main ones? A growing population of legal-age drinkers and rising GDPs in these emerging markets. Also key is a more streamlined regulatory environment, which reflects a “pragmatic view of an industry that often contributes significantly to tax revenues,” according to IWSR’s summary report.
Still, a few hurdles are holding back even stronger growth in these markets. Inflation and international instability (with conflicts in Ukraine and the Middle East) are creating headwinds. There’s also lingering uncertainty around personal financial security—bouncing back since 2020, but still a concern for many.
In short, the balance of power is shifting in the beverage industry. If you’re looking to the future, the smart money is on emerging markets leading the charge.
