Beer Market Takes an Unexpected Hit in China and the US, Dragging Down Beverage Volumes Worldwide

Tsingtao Beer displayed on a beer shelf at a store in Nanjing, East China’s Jiangsu Province, Oct 22, 2023. (Photo: Costfoto/NurPhoto via AP)

Beer, often regarded as a bellwether of the alcohol industry, is experiencing an unexpected volume slump due to economic and political pressures on both sides of the Pacific.

On Thursday, the International Wine and Spirits Record announced that global beverage alcohol volumes are set to decline further in 2025 than initially projected. The organization had previously forecast a -0.5% year-over-year drop across all alcohol categories — now, it stands at -0.7%.

IWSR President Marten Lodewjiks says beer is the main culprit. Though the category hasn’t been hit quite as hard as spirits and wine (-1.3% and -2.4% volume declines, respectively), the size and scale of the beer market is such that any change disproportionately affects the industry at large. In May, the IWSR had optimistically pegged beer volumes at +0.2% growth. That figure now sits at -0.4%.

“Beer consumption is particularly tied to going out to bars and restaurants, but consumers in the US are choosing to stay at home more than expected because of cost-of-living pressures,” Lodewijks said in a news release. “When consumers buy alcohol to entertain at home, they make different purchasing decisions, and beer often loses out.”

Lodewijks says that the other half of the beer issue stems from China. In addition to economic headwinds, the Chinese alcohol market has struggled with changes in government policy, including a brandy trade war against the E.U. and an alcohol ban at official receptions.

“In China, consumption has been hit by a government crackdown on luxury goods and a ban on alcohol at public sector events,” Lodewijks added. “Weaker than expected economic growth is also reducing spending at bars and restaurants as well as beverage alcohol spend generally. Reflecting this, beer and brandy volume forecasts for China have been adjusted downwards (although other categories remain largely unchanged).”