Alcoholic drinks sector to rebound from 2021: report
Spending is set to grow by 2.6% annually over the medium term.
Singapore's alcoholic drinks market is set for recovery from 2021 with consumption expanding 4.8% YoY, following a 9.3% YoY contraction in 2020 due to COVID-19-related restrictions on on-trade alcoholic drinks sales, according to the latest forecast by Fitch Solutions.
Alcoholic drinks consumption is projected to rise by 2.6% annually over the medium term, which will take consumption to 156.6mn litres by 2025.
Beer accounts for the largest proportion of consumption in 2021 at 87.6%. Fitch Solutions expects this proportion to remain relatively consistent over the medium term amidst beer’s affordability and accessibility.
Meanwhile, wine takes up the second largest proportion of spending at an average of 9.8% from 2021 to 2025, followed by spirits which account for around 3% over the same period.
The report also found that despite a smaller market size compared to other Southeast Asia countries, Singapore possesses a favourable demographic profile that makes it attractive for alcoholic drinks investors.
Adults of legal drinking age accounted for 83.2% of Singapore’s total population in 2020, and the figure is expected to increase constantly by up to 85.9% by 2050.
Fitch Solutions highlight the opportunity for premiumisation, with craft and artisanal alcoholic products seeing strong demand by the younger population in recent years.
“The growing demand of craft beer presents an opportunity for alcohol manufacturers to produce alcoholic drinks of unique flavours at a premium price point, as spending will be supported by the high disposable income levels of consumers within Singapore,” it said.