New data from the IWSR predicts that alcohol e-commerce sales will grow 34% between 2021 and 2026. The growth follows value growth of 12% in 2019 and 43% over 2020.
And while this is positive growth, it’s a hit from the channel’s previously expected trajectory. The IWSR formerly predicted that the value of alcohol e-commerce would rise by 66% between 2020 and 2025.
With on-premise returning to normal numbers, e-commerce is slowing. The slump is caused by a weaker macroeconomic outlook and a return to pre-pandemic purchasing habits.
“Having surged through the pandemic, alcohol eCommerce sales are set to moderate over the next few years. However, the channel is still a key growth contributor for the total beverage alcohol market,” notes Guy Wolfe, Strategic Insights Manager, IWSR Drinks Market Analysis. “Almost all volume gains in the total off-trade between 2021 and 2026 will come from e-commerce, despite slowing growth rates.”
New IWSR data shows consumer drivers for purchasing on1line are starting to shift, with shoppers ‘favoring trusted brands’ and ‘strong value propositions.’ With the cost of living increases and a recession looms, consumers are prioritizing value.
“Consumer drivers for purchasing alcohol online are shifting as costs of living increase,” remarks Wolfe. “Achieving previous pandemic growth rates will be unrealistic, but adapting to the current economic situation should ensure that brand owners operating in the e-commerce channel can still deliver healthy growth. Considerable opportunities continue to present themselves in the alcohol e-commerce space.”
Convenience is another big driver for online sales — last year, a third of surveyed consumers stated they shopped online to treat themselves. In 2022, that consumer replied that they ordered online to ‘stock up.’
The largest growth of alcohol e-commerce will come from China and the US. There’s room for the category to grow in the American market — the current e-commerce share of the total off-trade is low and the online consumer base is less mature.
The analysis firm also finds that the US will generate the most additional value, though China will bring in the most sales. China is less dependent on the impact of the pandemic, and the market will grow more steadily.
The IWSR focuses on 16 markets: Australia, Brazil, Canada, China, Colombia, France, Germany, Italy, Japan, Mexico, Netherlands, Nigeria, South Africa, Spain, the United Kingdom, and the United States.
Spirits will contribute the most value to the e-commerce channel during the 2021 to 2026 period. The IWSR predicts that whiskey and agave spirits will lead the growth in the American market, with an expected value increase of 16% and 30% CAGR, respectively.
The analysis firm expects that non-alcoholic spirits, Indian whiskies, and Irish whiskey will show the fastest online growth.