Navigating lingering macroeconomic headwinds, the alcohol industry remains on the defensive. As the spectre of tariffs and protectionist measures hangs heavy on the horizon, what are the latest updates for 2024, and the learnings from the negotiations and trade conflicts of the previous Trump administration?
Delivery
This report comes in PPT.
Key Findings
Recovery remains subdued, with risks skewed to the downside
While downgrades compared to our June 2024 baseline remain relatively small, there is no doubt that sentiment has shifted and is pointing to more negative performances than originally forecast.
Most key markets are facing downgrades
A cocktail of macroeconomic concerns and lingering inflationary pressures continue to take a toll in most key markets. While India is a notable exception, benefiting from the convergence of a relatively strong economy and favourable demographics, markets from the US to China and from Mexico to Japan have faced a slowdown.
The Trump Effect and gearing up for short-term volatility
Beyond the persistent macroeconomic headwinds and geopolitical upheaval suppressing consumer confidence, the newly elected Trump administration could prove particularly disruptive if the stated plans for tariffs were to be implemented. While initially used as leverage for negotiations, protectionist measures – and the resultant fresh spike in inflation – would lead to significant further disruption in 2025 and thereafter.
Western Europe, the US and China could be the next flashpoints
The ongoing political paralysis in France and its ripple effects throughout Western Europe, the potential for millions of illegal migrants to be deported in the US and the structural slowdown of the once booming Chinese economy are the weak points that could further derail the alcohol industry’s performance, affecting, for example, Mexican beer imports, wine prices and the health of the premiumisation trend.
Scope
About this briefing
Key findings
Anaemic recovery is downgraded further, macroeconomic storms brewing on the horizon
The spectre of tariffs is haunting the world of alcoholic drinks
Green shoots of recovery are severed
Glass remains half-empty: Key leadership commentary
Timeline: A cocktail of protectionism and trade wars?
Lessons from the previous Trump tariffs: History does not repeat itself but could it rhyme?
Revisiting key trends: Testing the limits of premiumisation – still under pressure
Pricing: Volatility and getting ready for the next inflationary spike
Eurozone, US and China: Ingredients for a potentially explosive cocktail
Global baseline outlook: Growth prospects are stable, but below potential
Global inflation outlook: On track to be back to target in 2025
Risks to global growth continue to broaden
Real GDP annual growth forecasts and revisions from last quarter – AE
Real GDP annual growth forecasts and revisions from last quarter – EMDE
Data and reporting timeline
Alcoholic Drinks
Alcoholic drinks is the aggregation of beer, wine, spirits, cider/perry and RTDs.
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