Despite Economic Hurdles and Soaring Inflation, Premium Alcohol Sales Remain on the Rise, Reflecting Diverse Consumer Behavior despite the global cost of living crisis.
Euromonitor International, a prominent market research firm, has unveiled a remarkable trend within the alcoholic beverage industry. Despite the ongoing economic challenges and persistent inflation, premium alcohol brands have demonstrated remarkable resilience in sustained sales growth.
Insights from Spiros Malandrakis, Head of Alcoholic Drinks
Spiros Malandrakis, the Head of Alcoholic Drinks at Euromonitor International, offered insights into this phenomenon. He highlighted the resilience of premiumization in various alcohol segments, ranging from champagne to ultra-premium English gin, Tequila, prestige Dark Rum, non-alcoholic spirits and aperitivo-embracing bitters.
Premiumization Persists Amidst Economic Disruptions
Malandrakis emphasized that the concept of premiumization remains firmly in the spotlight, even in the face of economic disruptions that have stymied overall growth. Notably, champagne, gin, Tequila, and dark rum have thrived, defying the challenges posed by the steepest inflationary spiral in history.
Diverse Consumer Behavior in the Face of Inflation
The Euromonitor report highlighted the diversity of consumer behaviours and motivations amid inflationary pressures. It revealed that consumers continue to invest in premium wines, spirits, and non-alcoholic alternatives.
For many consumers, indulging in premium products is seen as a means to enjoy occasional luxuries and solace amid financial constraints. Also, premium wines and spirits are status symbols, reflecting personal taste and sophistication.
Premiumization: A Resilient Trend in the Alcohol Industry
Malandrakis concluded that premiumization has been a pivotal and enduring trend in the alcohol industry. Contrary to expectations, there are no significant signs of sustained or heavy trading down, even during one of the steepest inflationary spirals in modern history.
Nigeria’s Remarkable Growth in Alcohol Spending
Despite economic headwinds and challenges, Nigeria has witnessed a substantial increase in spending on alcoholic beverages. The total sales of alcoholic beverages (drinks) in Africa’s biggest economy surged to a six-year high in 2021 despite increased prices, a report by Euromonitor International shows.
The report, titled ‘Alcoholic Drinks in 2021: The big picture’ by the London-based strategic market research firm, showed that the sales rose by 32.6 percent to $6.1 billion in 2021 from $4.6 billion in 2020. And it’s projected to hit $6.7 billion in 2022.
Understanding the Phenomenon
With an average beer consumption of 12.28 litres per year, Nigeria leads the top 10 biggest alcoholic-drinking countries in Africa.
The reopening of the economy after COVID-19, especially nightclubs and event centres, has increased the consumption of alcoholic drinks, especially beer.
It’s also important to consider cultural nuances underpinning the strong growth in the alcoholic beverage sector. There is a saying: “When things are bad, Nigerians drink to forget. When things are good, Nigerians drink to celebrate. Whatever happens, Nigerians must drink.”
