Brewers can be excused for wondering if the torture – spirits taking share from beer – will ever end. The answer, unfortunately, is “not yet,” according to Moody’s Investors Services. That’s true both globally and in the U.S.
Moody’s expects whiskies to continue to be among the fastest-growing sectors globally. But it warns the pace of growth will slow if tariffs on some products persist.
As for soft drinks, which do after all compete with bev/al for share of stomach, they haven’t posted positive growth numbers since 2004in the U.S. Globally, the prospects for carbonated soft drinks are much stronger.
Moody’s says it expects premiumization to continue to be a key factors for the global beverage industry.
Beer is becoming more premium around the world, Moody’s says. “In the U.S., a shift away from mainstream brands, such as Budweiser, Miller and Coors, has challenged the larger beer companies. But it has benefited craft beers and Constellation Brands Inc., which focuses on premium brands such as Corona Extra.” The large companies’ own premium offerings have often outperformed the rest of their portfolios, Moody’s says.
Craft growth, which has slowed to about 4% a year from double-digits just a few years ago, is still better than the overall U.S. beer market, which saw volume decline 1% in 2018, Moody’s says.
“We expect the growth of craft to slow further into the low single digits. This is because the category has become crowded, incremental shelf space at retail is harder to secure and smaller craft brand closures are accelerating. Outside of the US, the expansion of premium craft offerings is at an earlier stage and will have better growth potential for several years,” Moody’s adds.
“We expect the growth of craft to slow further into the low single digits. This is because the category has become crowded, incremental shelf space at retail is harder to secure and smaller craft brand closures are accelerating. Outside of the US, the expansion of premium craft offerings is at an earlier stage and will have better growth potential for several years.”